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By Alex Ruoff
Aug. 17 — The Trans-Pacific Partnership trade agreement is unlikely to expand the global trade market for health data because it contains wide exemptions for countries worried about their citizens' privacy, a trade policy analyst told Bloomberg BNA Aug. 17.
The Obama administration re-released the full text of the TPP recently, as part of a legal notice to Congress. A review of the document confirmed that the deal contains broad loopholes for data protectionism laws. Department of Commerce officials have said the landmark trade deal will strike down these laws, often known as data localization laws, which require businesses to store certain types of data such as personal health information on local servers.
Data protectionism laws, which exist in TPP partner countries Australia and Canada, make it expensive for U.S. health-care organizations and technology companies to operate in foreign markets, because they can't take advantage of cloud storage technologies and other cost-savers common among multinationals, Nigel Cory, a trade policy analyst for the Information Technology & Innovation Foundation, told Bloomberg BNA. While the trade deal tries to break down these laws, it also allows them to remain under the guise of protecting people's privacy, he said.
“In health, Australian and Canadian data localization requirements for health data privacy will likely remain if the TPP comes into force, which also means that these types of measures could be adopted by other TPP members,” Cory said in an e-mail to Bloomberg BNA.
The TPP is a landmark deal among a dozen Pacific nations, including the U.S. and Japan, to remove trade barriers on items ranging from cars to rice. The deal cleared an important procedural hurdle Aug. 12, when the Office of the U.S. Trade Representative sent a draft legal document to Congress. The trade agreement's text had been publicly available since February.
While the Obama administration is pushing for Congress to approve the deal via fast track before the fall, key lawmakers such as Senate Finance Chairman Orrin Hatch (R-Utah) have expressed opposition to the TPP.
The TPP has also sparked opposition from both major party presidential campaigns. Republican presidential nominee Donald Trump and Democratic presidential nominee Hillary Clinton have opposed the TPP, which covers the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Department of Commerce officials have said the agreement will end protectionism laws in partnership, which are strictest in Malaysia and Vietnam.
Such laws restrict companies from hiring data storage companies outside their home country or sending health data to researchers or private companies, according to Commerce.
In its e-commerce section, the TPP declared that the 12 party countries “shall allow the cross-border transfer of information by electronic means, including personal information, when this activity is for the conduct of the business.” The agreement also bans the use of electronic authentication or e-signature rules that prohibit the electronic exchange of data across international borders.
However, countries can maintain data protectionism laws or enact new ones if it achieves “a public policy objective,” according to the deal.
This broad exception means many of the data protectionism laws the deal attempts to strike down will likely remain, Cory said.
Keeping data protectionism laws on the books will make it more expensive for U.S. health technology companies to operate in Pacific countries and will prevent most health-care organizations from taking advantage of the expertise of scientists and specialists around the world, Cory said.
The growth in electronic health record use by doctors and hospitals in the U.S. has created a budding domestic market for digital health data as health-care organizations seek data to support their quality improvements efforts, according to a 2014 report by the U.S. International Trade Commission.
Hospitals and health systems are benefitting from large, more-complete health data sets representing larger populations to support research of new treatments, Cory said. However, few can tap into data from European countries or Australia—which have robust health data networks—due to these laws, he said.
Christopher Padilla, vice president of government and regulatory affairs for IBM, told a House Ways and Means subcommittee in July that its computing solution Watson operates in over 40 countries, but the company is concerned that data protectionism laws will stifle that project.
IBM has the resources to navigate the complex regulatory issues involved with the movement of health data between countries that many companies don't possess, Cory said. Confusing loopholes will only further stymie this market, he said.
“What this means is that data localization requirements for health data will make it harder to scale the critical breakthroughs that are happening all over the world in the health and medical technology space,” Cory said. “Countries should be doing the opposite by leveraging the benefits of cloud computing in terms of cost, ease, and security to access the latest technology and services wherever this work is being done.”
To contact the reporter on this story: Alex Ruoff in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Kendra Casey Plank at email@example.com
Full text of the TPP is at https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/tpp-full-text.
The Office of the U.S. Trade Representative's draft legal document is at https://ustr.gov/sites/default/files/DRAFT-Statement-of-Administrative-Action.pdf.
The 2014 report from the U.S. International Trade Commission is at http://www.usitc.gov/publications/332/pub4415.pdf.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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