There is growing debate about the spread of national data localization restrictions and barriers to Cross-Border Data Flows (CBDF). Localization policies include requirements such as: data must be processed within a national territory, and involve a specific level of “local content,” or the use of locally provided services or equipment; data must be locally stored or “resident” in a jurisdiction; data processing and/or storage must conform to unique national 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 e.g. promoting local industry; 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. McKinsey has estimated that data flows enabled economic activity that boosted global GDP by US $2.8 trillion in 2014, and that data flows now have a larger impact on growth than flows of traded goods. The growth of localization measures and barriers to CBDF could reduce these values and impair not only business operations but also vital social processes that are predicated on the flow of data across the Internet. Hence, language limiting such policies has been included in a number of trade agreements, including the TPP and the proposed TTIP and TiSA. It also is possible that at least some of the policies in question are inconsistent with governments’ commitments under the WTO’s GATS. But the extent to which these issues should be addressed by trade instruments remains controversial, with many in the global Internet community and civil society remaining critical of non-transparent intergovernmental approaches to the Internet, and many privacy advocates opposing the application of trade rules to personal data. 

This workshop will take stock of the growth of data localization measures and barriers to data flows and assess the impacts of these trends; consider what can be achieved via international trade instruments in the current geopolitical context; and explore the possibility of a parallel track of multistakeholder dialogue and norm setting that is balanced and supported by diverse actors. It will consider whether normative approaches involving monitoring and reporting could help to ensure that data policies do not involve arbitrary discrimination or disguised digital protectionism, and do not impose restrictions greater than what is required to achieve legitimate public policy objectives.

 The workshop will provide input to a report that is being prepared for the World Economic Forum by William J. Drake for release in September 2017. The report will build on a 2016 WEF report, Internet Fragmentation: An Overview by Drake, Vint Cerf, and Wolfgang Kleinwachter http://www3.weforum.org/docs/WEF_FII_Internet_Fragmentation_An_Overview_2016.pdf that provided background to a session at the last 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 .