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Data is Different: Why the World Needs a New Approach to Governing Cross-border Data Flows

Author

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  • Susan Aaronson

    (George Washington University)

Abstract

Companies, governments, and individuals are using data to create new services such as apps, artificial intelligence (AI) and the internet of things (IoT). These data-driven services rely on large pools of data and a relatively unhindered flow of data across borders (few market access or governance barriers). The current approach to governing cross-border data flows through trade agreements has not led to binding, universal, nor interoperable rules governing the use of data. Trade diplomats first established principles to govern cross-border data flows, and then drafted e-commerce language in free trade agreements, rather than through the WTO, the most international trade agreement. Data-driven services however, will require a different domestic and international regulatory environment than that developed to facilitate e-commerce. Most countries with significant numbers of data-driven firms are in the process of debating how to regulate these services and the data that underpins them. I argue that policymakers must devise a more effective approach to regulating trade in data for four reasons: the unique nature of data as an item exchanged across borders; the sheer volume of data exchanged; much of this data exchanged across borders is personal data, and the fact that although data could be a significant source of growth, many developing countries are unprepared to participate in this new data driven economy and to build new data driven services. This article begins by with an overview and then describes how trade in data de is different from trade in goods or services. It then examines analogies used to describe data as an input, which can help understand how data could be regulated. Next, we discuss how trade policymakers are regulating trade in data and how these efforts have created a patchwork. Finally, it suggests an alternative approach. "

Suggested Citation

  • Susan Aaronson, 2018. "Data is Different: Why the World Needs a New Approach to Governing Cross-border Data Flows," Working Papers 2018-10, The George Washington University, Institute for International Economic Policy.
  • Handle: RePEc:gwi:wpaper:2018-10
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    File URL: http://www2.gwu.edu/~iiep/assets/docs/papers/2018WP/AaronsonIIEP2018-10.pdf
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    Cited by:

    1. Hou, Bohan, 2021. "A Novel Data Governance Scheme Based on the Behavioral Economics Theory," SocArXiv 2b9dc, Center for Open Science.
    2. Craig Allen McGee Jones, 2021. "Critical Success Factors for Data Governance of Cross-border e-Trade Data Among ASEAN Member States," Journal of Asian Economic Integration, , vol. 3(1), pages 38-60, April.

    More about this item

    Keywords

    data; digital trade; AI; internet; trade; FTA; WTO;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • F6 - International Economics - - Economic Impacts of Globalization

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