South Centre

Governing Global Data Flows and Exchanges for Digital Trade

Chamarty Sai Sumana, Intern of the Trade for Development Programme of the South Centre

South Centre, IT for Change, and the Transnational Institute jointly organized a working session on ‘Governing Data for Global Data Flows and Exchanges for Digital Trade’ at the WTO Public Forum in September 2022. The session focused on why and how governments undertake the enormous task of developing a global data governance framework.

The session was moderated by Vahini Naidu, South Centre’s Programme Coordinator on Trade for Development. The core discussion centered around UNCTAD’s illuminating Digital Economy Report of 2021 where it recommended a holistic approach to the development of a global data governance framework to manage the policy and regulatory fragmentation of the data economy.

Pilar Fajernes, UNCTAD’s Chief of Digital Economy Policy Research, elaborated on the key perspectives of UNCTAD’s Digital Economy Report, including the societal aspects. She explained the multi-dimensions of data which have economic, private as well as social value. She opined that the value chain that comes from the collection, storage, transport and analysis of data, can be used for private or social value. To illustrate, there can be different digital platforms like data for achieving sustainable development goals, and data to fight climate change, and in the recent past we have seen how data was used during the COVID-19 pandemic for vaccination.

An emerging concern is about location and ownership. The location of the data depends on many factors that are to be assessed under a cost-benefit analysis in every country, to see what is more beneficial for the country i.e., to keep the data inside the country or to locate them in a data center outside it. In terms of ownership, she explained the importance of understanding the characteristics of access, control, and usage of the data, and their differences with goods and services. The digital economy exemplifies huge power imbalances including the data divide which is directly related to the capacity and readiness of the actors to harness the benefits of the data. Those who will be at risk are the developing countries, who will need to find their positions globally. The speaker opined that we could call such divide ‘the global division of labour in the data-driven digital economy’. Foreign global digital platforms collect from domestic actors and process raw data to produce the digital intelligence for which developing countries will have to pay.

The data policies by China, EU and USA are focused on the control of the data by the government while also trying to expand their control over data outside their territory. This will lead to fragmentation of the data, which will inevitably hamper the development of a global governance framework. UNCTAD examines different approaches at the regional and international level and recommends a global framework that would enable global data sharing and representation in the digital space, increase trust in the digital economy, and address policy challenges relating to the high dominance of global digital platforms.

The key areas UNCTAD focuses on are the definitions and taxonomies about the types of data, terms of access to the data, providing evidence-based policymaking, exploring emerging forms of data governance like data collaboratives and data comparatives, and issues related to taxation and competition policies.

The key takeaways from the recommendations and the policy responses that UNCTAD is considering include the following: Data cannot only be characterized by its economic and development dimensions because it cannot be disentangled from the other dimensions of data. UNCTAD is considering that there is a need for an equitable distribution from the gains from the flow of data or of the data itself. For these reasons, UNCTAD recommends looking for middle-ground solutions, a multi-stakeholder and multi-dimensional approach, while really considering that in global data governance what is needed is to have a holistic multi-dimensional whole-of-government and a multi-stakeholder approach.

Sofia Scasserra, Transnational Institute’s Associate Researcher, shared insights and her experience in developing a global data governance framework. Her focus was on the effect of data on changing the organization of labour. She explained that data as raw material is being monopolized by a handful of corporations worldwide. She highlighted the necessity for global governance because the discussions on how to deal with data have mostly been addressed from a commercial perspective. “They treat it as if it was only a raw material, to be able to change the economic paradigm that we live in in order to make it more efficient.” Data is not only about privacy, but also about changing the organization of labour and production. Algorithms programmed by a couple of corporations that have some idea of what should and shouldn’t be, which is based on data that they know, create problems as they are biased. Their aim should not be just about profit, but also to help organize societies to have a better future for everyone. These same issues are negotiated in the WTO Joint Statement Initiative on E-commerce.

The key takeaway is that we need a human approach to managing the data. While UNCTAD supported a multi-stakeholder approach, Transnational Institute partially agreed to it pointing out that we need to really think about who will be affected, while stressing the importance of democracy in any data governance framework.

Parminder Jeet Singh, IT for Change’s Executive Director considered the institutional framework and the global public good aspects of data. He pointed out that most platforms in developing countries are from abroad, and there is a control through these platforms of domestic economic activity, manufacturing, trading and labour. This control is exercised through the flow of data from developing countries and then AI based on such data flows is used in the reverse direction to manage the economies in the South. The speaker pointed out that much of the value and benefit is not in personal data but the collective data. Taking India as an example, he explained that the Government of India set up a committee that gave the recommendation to have collective ownership of the data (called ‘community data’) and use it to claim the data held by platforms. And some data, not all data, is then considered as having an infrastructural nature, and whoever holds it has to share it with everyone. The EU has also recognized some kinds of infrastructure data, like in the draft Health Data Space Regulation, which is to be made available to researchers, innovators, etc, against data permits issued in the EU.

Regarding data as a public good, he opines that data is by its nature a public good but not a global public good. This is because if it were a global public good, it should be subjected to a regime of free flow of data so everyone could have access. The key takeaway is that all economic data laws in EU and the recommendations adopted in India generate asymmetric data rights. They do not treat data as a common good. Small players can make use of shared data but Big Tech cannot employ the same provisions to get data out of small players. In the same way, at the global level, data sharing regimes should favour developing countries and not the key digital superpowers, as happens today, and as will be legalized through free data flow related provisions in trade agreements.

On framework law, the discussion was that a framework law is different from ‘normal’ law. The suggestion of the speaker was that framework law sets up larger conditions under which sectoral or different aspects of a particular matter can be dealt with. The key takeaway is that one or two organizations can frame the model framework law on global data so that we can start getting a sense of what it is, what Members can agree on, and what are the points of difference.

The above comments left participants with many ideas and insights on how to develop a global data flow regulation framework. Interventions from the floor recommended that South Centre, IT for Change and Transnational Institute develop a model law to help countries, in particular the Global South, situate the data economy in a holistic, development-friendly, inclusive framework. South Centre took note of the recommendation for the co-organizers to develop a model law and undertook to discuss the potential for conducting such an important and relevant exercise.

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