THINKPolicy #4: Safeguarding the Future of Digital Trade

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Our world is becoming smarter. We are, quite simply, awash in data. From aircraft engines that alert owners when they’re due for maintenance to wearable devices that can share fitness data directly with your doctor.

Businesses, using advanced computing and software, are deriving more and more value from these data flows – in the 21st century, data is the world’s most valuable natural resource, and also its most plentiful one. More importantly, access to data-driven insights is being made available to more and more people in society, putting the power of data analytics in the hands of citizens rather than in the hands of a select few.

Harnessing the untapped potential of data depends in large part on the ability of people and institutions to freely move it across international borders. One example is a global business’ use of advanced data analytics to make its worldwide operations more efficient, effective and profitable.

For a variety of reasons, governments around the world have begun exploring policies that would restrict the movement of data, or that require any data collected or used within their borders be stored on local servers. Security and privacy often are cited as justification for these practices but, as we’ve seen time and again, hackers and cyber criminals are not limited by lines on a map.


dtrade_02Policy makers the world over should enact measures to protect the worldwide movement of data that underpins our digital economy. Examples of such policies include:

  • Trade for the 21st Century – future trade agreements, from the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) to the Trade in Services Agreement (TiSA), should include strong provisions to preserve cross-border data flows and prevent participant countries from enacting protectionist data localization requirements. In this regard, we welcome the U.S. Trade Representative’s “Digital Dozen” principles which are reflected in the TPP, and we commend the European Commission for emphasizing the importance of digital trade in its recently-released trade strategy. Limitations to the free flow of data, such as those intended to protect privacy, should only be allowed if they are compatible with existing international principles as defined in the General Agreement on Trade in Services (GATS).
  • Freedom to Store – IBM feels strongly that our clients, not governments, should determine where their data is stored, how it is processed, and by whom. Some clients will want data stored and processed globally, while others may prefer their data is stored locally for reasons of convenience, resiliency or simple preference. IBM is making significant investments in cloud data centers around the world in order to give clients those choices, but those decisions should be driven by commercial factors, not government mandates.  IBM will generally oppose laws and regulations that mandate localization of data.

Between 2005 and 2012, cross-border data flows have seen an eighteen-fold increase. By 2025, they’re expected to grow again by a factor of eight. With data fundamentally reshaping the way our world works, governments should be encouraging, not stifling, its power to drive growth, innovation and the creation of new jobs.


Media Contact:

Adam R. Pratt

(202) 551-9625

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