Trump Should Protect Digital Global Free Trade, Think Tank Urges


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The Trump administration should use trade agreements to eliminate international requirements that personal data be stored in a particular country and other barriers to digital trade, a think tank urges in a recent report. President Donald Trump should also initiate enforcement actions against countries that engage in digital protectionism, the Information Technology and Innovation Foundation said.

The report also recommends that the U.S. expand its focus on digital economy issues and develop better measures to deal with them, including proposing an international pact on data issues—akin to the Geneva convention for treatment of prisoners—to establish international standards and manage cross-border data issues.

Dozens of countries have erected barriers with data localization laws requiring storage in-country, the report said. Policymakers often mistakenly believe that data localization measures with strengthen privacy and cybersecurity by keeping data within the borders of the country, according to IFTIF. Policymakers also rely on an economic development argument, saying that digital trade barriers will help them build domestic tech and cloud industries, or “digital mercantilism,” the report said.

Another reason to seek an international accord is to ameliorate the ability of data localization laws to enable government surveillance of its citizens, the ITIF said.

Digital trade barriers make companies less competitive as they spend money to comply with the laws. They must also often have to purchase more expensive in-country data storage and are prevented from routine transfers for basic business functions such as human resources, the report said. Imposing higher expenses on companies also makes it hard for them “to gain exposure and benefit from new ideas, research, technologies and best practices,” and make it more difficult to develop innovative products, the report said. 

Bloomberg Law recently addressed data localization at the International Association of Privacy Professionals’ Global Summit 2017, where it hosted a panel on top privacy professionals to discuss the issue. One of the panelists, Kristen Mathews of Proskauer Rose LLP, told Bloomberg BNA in a video interview that companies that store data in countries with data localization laws should first verify the types of data they collect and identify whether they store information in such countries.

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