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What is the importance of global data flow in international trade ?
Recent years have seen remarkable developments in the digital economy, creating unprecedented opportunities for SMEs to enter global markets for the first time. For businesses to access the global marketplace, improve efficiency, and boost productivity and customization, digitalization is critical to the innovation, growth and success of business sectors.
With cross-border transactions conducted between electronic platforms and through more traditional means becoming more difficult to differentiate, a fully digitally-enabled trading system is inevitable.
Companies rely on these flows to conduct day-to-day business with customers, partners, and suppliers; innovate in their business and operations; detect cyber threats and intrusion patterns; and compete more effectively – in sectors as diverse as agriculture, healthcare, manufacturing, banking and shipping.
There is growing recognition that global value chains (GVCs) are critical in today’s economy and a clear acknowledgement that the globalization of production is driven by technological progress, cost, and access to resources and markets. This shift calls for a movement of data and information across borders where all actors involved depend on seamless and uninterrupted information flows across companies and countries. Creating trusted environments to better enable use of Information and Communication Technologies (ICTs) and related data flows can help address the negative implications for growth.
Lack of trust in cross-border data flows leads to uncertainty that may discourage the participation of individuals, businesses, and even governments in the global digital economy. Without clear parameters and rules around government access to personal data, including access across international borders, legal uncertainty will persist, likely leading to the proliferation of data localisation measures, which negatively impact the global digital economy. Achieving consensus on common principles for trusted government access to personal data held by the private sector will support the transfer of data between jurisdictions by commercial entities and result in positive economic and social impacts.
The benefits of trade depend on the trusted flow of data between countries. Data transfers are estimated to contribute $2.8 trillion to global GDP—a share that exceeds the global trade in goods and is expected to grow to $11 trillion by 2025. This value is shared by traditional industries like agriculture, logistics, and manufacturing, which realise 75% of the value of the data transfers.
ICC believes that government policymakers should strive to set favorable conditions for the digital economy and encourage data-driven innovation, while at the same time taking into account the interest of individuals and businesses alike in the protection of their personal data regardless of where it is stored, processed or transferred.