William Drake – Forced data localization and barriers to cross-border data flows: toward a multistakeholder approach – Pre 07 2017

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5 June 2017 | 15:00 - 17:30 | Room Tornimäe I, Swissotel, Tallinn, Estonia
Programme overview 2017

Session teaser



They will be used as hash tags for easy searching on the wiki

  1. digitaltrade
  2. ECommerce
  3. datalocalization
  4. DataFlows
  5. privacy
  6. InternetFragmentation

Session description

The past few years have witnessed an increasingly intense debate on the world-wide growth of national data localization restrictions and barriers to Cross-Border Data Flows (CBDF). Localization proposals and policies typically involved requirements such as: data must be processed by entities physically within a national territory; data processing must include a specific level of “local content,” or the use of locally provided services or equipment; data must be locally stored or “resident” in a national jurisdiction; data processing and/or storage must conform to national rather than internationally accepted technical and operational standards; or data transfers must be routed largely or solely within a national or regional space when possible. In addition, In some cases, data transfers may require government approval based on certain conditions, or even be prohibited. Governments’ motivations for establishing such policies vary and may include goals such as promoting local industry, technology development, employment, and tax revenue; protecting (nominally, or in reality) the privacy of their citizens, and more broadly their legal jurisdiction; or advancing national security or an expansive vision of “cyber-sovereignty.”

The stakes here are high. For example, it has been estimated that data flows enabled economic activity that boosted global GDP by US $2.8 trillion in 2014 according to McKinsey, and that data flows now have a larger impact on growth than traditional flows of traded goods. The growth of localization measures and barriers to data transfers could reduce these values and significantly impair not only business operations but also many vital social structures that are predicated upon the free flow of data across a relatively open and unfragmented Internet. Accordingly, specific language limiting such policies has been included in a number of proposed trade agreements, including the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TiSA). While the TPP has been rejected by the new US government and the forecast for other agreements is cloudy at best, it is possible that at least some of the policies in question are inconsistent with certain governments’ existing commitments under the World Trade Organization’s General Agreement on Trade in Services (GATS). Even so, the extent to which these issues should be addressed by trade instruments remains a highly controversial issue, with many in the global Internet community and civil society remaining very critical of non-transparent intergovernmental approaches to an increasingly important piece of global Internet governance, and many privacy advocates vehemently opposing the application of trade rules to personal data.

Accordingly, the purposes of this side event are three-fold. First, it will take stock of the growth of data localization measures and barriers to data flows and assess the scope and impacts of this trend. Second, it will consider what can be achieved via international trade instruments in the current geopolitical context. Third, and perhaps most importantly, it will explore the possibility of constructing a parallel track of multistakeholder dialogue and decisionmaking that is balanced and enjoys the support of diverse actors and perspectives. In particular, we will consider whether “soft law” approaches involving sufficient monitoring and reporting could help to ensure that data policies are not applied in a manner that constitutes arbitrary discrimination or disguised digital protectionism; and do not impose restrictions that are greater than are required to achieve legitimate public policy objectives.

The roundtable discussion will provide input to a report on the topic that is being prepared for the World Economic Forum (WEF) by William J. Drake for release in the autumn of 2017. The report will build on a prior report Internet Fragmentation: An Overview by Drake, Vint Cerf, and Wolfgang Kleinwachter that was released by the WEF in January 2016 http://www3.weforum.org/docs/WEF_FII_Internet_Fragmentation_An_Overview_2016.pdf and provided the framework for a session held at the 2016 WSIS Forum https://www.itu.int/net4/wsis/forum/2016/Agenda/Session/169 ; as well as on the outputs of the WEF/ICTSD E15 Initiative on Strengthening the global trade and investment system http://e15initiative.org .


Highlights of the issues outlined in the report will be presented, panelists will dialogue in response, and then the majority of time will be for open interactive discussion with all participants.

Further reading

AccessNow, 2014. "The Impact of Forced Data Localization on Fundamental Rights." https://www.accessnow.org:443/the-impact-of-forced-data-localisation-on-fundamental-rights/

Matthias Bauer, Martina F. Ferracane, Hosuk Lee-Makiyama, Erik van der Marel, 2016. "Unleashing Internal Data Flows in the EU: An Economic Assessment of Data Localisation Measures in the EU Member States,” ECIPE Policy Brief No. 3. http://ecipe.org/publications/unleashing-internal-data-flows-in-the-eu.

"Brussels Declaration on Trade and the Internet," February 22, 2016. https://www.eff.org/files/2016/03/15/brussels_declaration.pdf

Business Roundtable, 2015. Putting Data to Work: Maximizing the Value of Information in an Interconnected World http://businessroundtable.org/

Chander, Anupam and Uyen P. Le, 2015. “Data Nationalism”, Emory Law Journal, v. 64, pp. 721-722. http://law.emory.edu/elj/_documents/volumes/64/3/articles/chander-le.pdf.

Crosby, Daniel, 2016. "Analysis of Data Localization Measures Under WTO Services Trade Rules and Commitments," E15 Initiative Policy Brief, International Centre for Trade and Sustainable Development and The World Economic Forum. http://e15initiative.org/publications/analysis-of-data-localization-measures-under-wto-services-trade-rules-and-commitments.

Drake, William J. 1993. “Territoriality and Intangibility: Transborder Data Flows and National Sovereignty,” Beyond National Sovereignty: International Communications in the 1990s, edited by Kaarle Nordenstreng and Herbert I. Schiller, Ablex, pp. 259-313. http://tinyurl.com/wjdrake-tbdf-1993.

European Commission, 2016. "European Free Flow of Data Initiative within the Digital Single Market," Inception Impact Assessment, 3 October. http://ec.europa.eu/smart-regulation/roadmaps/docs/2016_cnect_001_free_flow_data_en.pdf

European Commission, 2016. Facilitating Cross Border Data Flow in the Digital Single Market. https://ec.europa.eu/digital-single-market/en/news/facilitating-cross-border-data-flow-digital-single-market

Force Hill, Jonah, 2014. “The Growth of Data Localization Post-Snowden: Analysis and Recommendations for U.S. Policymakers and Industry Leaders,” Lawfare Research Paper Series, 2, 21 July. https://lawfare.s3-us-west-2.amazonaws.com/staging/Lawfare-Research-Paper-Series-Vol2No3.pdf

Kuner, Christopher, 2015. “Data Nationalism and its Discontents”, Emory Law Journal, v. 64,, pp. 2089 - 2098. http://law.emory.edu/elj/_documents/volumes/64/online/kuner.pdf.

Manyika, James, Susan Lund, Jacques Bughin, Jonathan Woetzel, Kalin Stamenov, and Dhruv Dhringra, 2016. Digital Globalization: The New Era of Global Flows, McKinsey Global Institute. http://www.mckinsey.com/business- functions/mckinsey

Manyika, James, Jacques Bughin, Susan Lund, Olivia Nottebohm, David Poulter, Sebastian Jauch, and Sree Ramaswamy, 2014. Global Flows in a Digital Age: How Trade, Finance, People, and Data Connect the World Economy. McKinsey Global Institute. http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_ age.

Joe McNamee, 2016. "Free Flow of Data – What is It?" EDRi, 30 November. https://edri.org/free-flow-of-data/

Maryant Fernández Pérez, 2016. "Corporate-Sponsored Privacy Confusion in the EU on Trade and Data Protection," EDRi, 12 October. https://edri.org/corporate-sponsored-privacy-confusion-eu-trade-data-protection/

Pepper, Robert, John Garrity, and Connie LaSalle, 2016. “Cross-Border Data Flows, Digital Innovation, and Economic Growth,” in The Global Information Technology Report 2016: Innovating in the Digital Economy, edited by Silja Baller, Soumitra Dutta, and Bruno Lanvin, The World Economic Forum, pp. 39-40. https://www.weforum.org/reports/the-global-information-technology-report-2016.

Schaake, Marietje, et al., 2015. “Statement on 'Digital Protectionism,’” European Parliament, Brussels, 22 September. http://www.marietjeschaake.eu/wp-content/uploads/2015/09/2015-09-22-MEPs-Statement-on-Digital-Protectionism.pdf.


Please provide name and institution for all people you list here.

  • William J. Drake [moderator]
 International Fellow & Lecturer 
 Media Change & Innovation Division, IPMZ
 University of Zurich, Switzerland

Roundtable Participants

  • Anriette Esterhuysen
 Executive Director
 Association for Progressive Communications
  • Lise Fuhr
 Director General
 European Telecommunications Network Operators' Association (ETNO)
  • Nigel Hickson
 Vice President for IGO Engagement
 Internet Corporation for Assigned Names and Numbers (ICANN)
  • Wolfgang Kleinwächter
 Professor Emeritus
 Aarhus University  (& former Board of Directors, ICANN)
  • Andrei Kolesnikov
 The Internet of Things Association, Russia
  • Konstantinos Komaitis
 Director, Policy Development
 The Internet Society
  • Gonzalo Lopez-Barajas
 Manager, Public Policy and Internet
 Telefónica, S.A.
  • Marília Maciel
 Digital Policy Senior Researcher 
  • Erika Mann
 Senior European Policy Advisor
 Covington & Burling LLP (& former Board of Directors, ICANN)
  • Thomas Schneider
 Federal Office of Communications
 Government of Switzerland  
  • Lee Tuthill
 Counsellor for Trade in Services
 The World Trade Organization


Please provide a short summary from the outcome of your session. Bullet points are fine.