Restrictions on outbound data transfer based on Government Access in foreign countries -The current situation, Regulation by International Trade Law and Implications for DFFT-

Author Name WATANABE Shota (Nomura Research Institute)
Creation Date/NO. December 2019 19-J-067
Research Project Comprehensive Research on the Current International Trade/Investment System (pt. IV)
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As surveillance in cyber space increases in importance, concerns of economically-driven abuse and privacy protection have also risen. In reaction to these concerns, some countries have introduced restrictions on outbound data transfers to countries where such concerns arise. These restrictions inevitably restrict the free flow of data and might violate international trade agreements as well as the Japan-led concept of Data Free Flow with Trust ("DFFT").

The EU and the US have already introduced such restrictions and impose certain conditions on outbound data transfers. These restrictions have potential conflicts with existing trade agreements, such as GATS and CPTPP. While GATS does not directly regulate these restrictions, they might be subject to regulation as measures against trade in services. CPTTP directly regulates their use, but as CPTPP stipulates exemptions for privacy protection and national security, they might be excluded. In conclusion, the scope of existing regulations of trade agreements still includes uncertainty, and we should promote international agreement on this topic. We should involve multi-stakeholders without limiting the scope to trade experts and take note of existing international debate, including that in the United Nations.