Federation of German Industries (BDI) | November 2020
Cross-border data exchange: Regulatory options in international collaboration
The digital transformation leads to an increase in global data flows. Production and trade depend on digital information being transported, stored and used across borders. In view of this development, cross-border data exchange is increasingly becoming the subject of international agreements and free trade agreements. The BDI advocates for uniform regulatory approaches worldwide.
BDI’s core demands:
1. Cross-border data exchange is often hampered by protectionist laws. As a result, in important third markets European companies are discriminated against in an unjustified way in relation to their competitors. It is therefore important to counter these protectionist tendencies com- prehensively through trade agreements and other international arrangements and to strengthen free trade.
2. Global solutions must be found for the regulation of cross-border flow of goods. National uni- lateral efforts must be avoided. The World Trade Organisation WTO must, by the latest at its 12th Ministerial Conference, extend the decision to not require customs clearance of electronic transmissions, if possible, without a time limit.
3. The EU’s proposed arrangements in FTAs for cross-border data exchange and against localisation constraints are too inflexible compared to those in existing North American and Asia- Pacific Free Trade Agreements (USMCA, CPTPP) and allow for disproportionate state intervention. The EU needs to strengthen safeguards against digital protectionism in trade agreements.
4. The mechanisms under the EU, North America and Asia-Pacific Free Trade Agreements (CPTPP) should be made interoperable to promote data exchange. The G20 representatives identified this issue in the Osaka Declaration of June 2019. The agreements reached there must now be implemented quickly. It is important to set strong global standards for international data exchange.
5. Before revoking an adequacy decision, EU institutions need to check thoroughly that the con- ditions for revocation are met. If revocation is required, the companies involved must be in- formed of the case at an early stage, in order to be able to adapt to the changes that the revocation will bring.
6. The BDI prefers legislation in the area of data exchange through binding, practicable rules compared to soft law, as these create legal certainty. However, soft law is still important. It can be helpful, for example, in cooperation in global forums with important partners. Moreover, soft law often results in binding law. In this respect, it also has the function to inspire.