IGP held a session at the Global Congress on Intellectual Property and Public Interest with Stephen Ezell of the Information Technology and Innovation Foundation (ITIF), Peter Swire of Georgia Tech, and Charles Duan and Bill Watson from R Street. The Internet and Trade track of this conference was organized by Public Citizen and our panel was included despite the fact that we diverge from Public Citizen’s views regarding free trade agreements and digital rights.

We started the panel by talking about how data localization can affect our digital rights and take away the globally interconnected nature of the Internet. Peter Swire discussed the Cloud Act and how it could help diminish the “national security” concerns that could be raised in trade agreements and help with facilitating free trade negotiations and preventing data localization. Bill Watson made the point that there are at the moment no international laws or rules that can apply to data. Due to the lack of legal grounds, objecting to data localization as a protectionist measure by states in trade forums such as the World Trade Organization might not be effective. Watson also added that data localization clauses in trade agreements are not nuanced enough, banning data localization altogether.

Charles Duan made the point that intellectual property rights holders cannot easily enforce their rights when data crosses the borders. So IP rights holder interests can lead to creating artificial borders around data. Consequently, IP clauses in free trade agreements could lead to data localization. Stephen Ezell told us that the confidentiality and security of data don’t generally depend on which country the information is stored in, only on the measures used to store that data securely and with the appropriate privacy protections.

He also commented that a country’s approach to data/digital trade should be open in nature. Countries that have attempted to introduce localization barriers to digital trade—such as through local data storage requirements or requirements to use local computing facilities in the provision of digital services—only add costs or make it difficult to access global best-of-breed digital services providers. (Vietnam’s Decree 72, which stipulated that digital services like Web search or cloud computing could only be provided by data centers located in the country, is an example of this).  Some studies have found that these types of policies raise the cost of cloud computing by 30 to 60 percent in developing countries. Countries do better when they allow competition in digital services and also when they use data as a platform for innovation, such as when governments use open data policies to provide government datasets that can be used by the private sector for innovation. ITIF is on record as being opposed to local-data storage requirements, whether they are in U.S. cities like California, Canadian provinces like Nova Scotia and British Colombia, or anywhere else in the world. ITIF’s report, Cross-Border Data Flows: Where Are the Barriers, and What Do They Cost? provides a comprehensive inventory of data localization barriers globally and explains why they are a misguided policy approach.

The final question was whether Free Trade Agreements could potentially protect our digital rights rather than violating them. Some panelists believe that trade agreements and trade forums are not the right place to pursue our digital rights. Some others believed that some of the clauses about intellectual property will take away our digital rights and lead to data localization. Some were of the opinion that free trade agreements with fair use clauses, and IP rights that are not overly-expansive, can potentially alleviate the concerns of IP rights holder and prevent data localization.

The very engaged audience challenged the panelists on mainly two issues: the Cloud Act, and the hypocrisy of the developed world when it came to data localization. They contended that the developed world localized data but when it came to developing world localizing data, it called them following “authoritarian” models. The second criticism was about including overreaching IP rights in free trade agreements.

I was the moderator of the session so I tried to be a moderate moderator. But my observations from this meeting and the Internet and Trade track at the Global Congress on Intellectual Property for Public Interest are as follows:

  1. When you think about the sovereign rights to localize data, don’t think only about democratic countries such as New Zealand and Australia. Think about autocratic countries that are oppressive. These countries do not localize data to protect citizens but to carry out surveillance and enforce their archaic laws. (I personally would prefer to have the U.S. National Security Agency surveilling my health-related data than any Islamic Republic.)
  2. We need to come up with a more nuanced approach in analyzing trade agreements. Which aspects of free trade agreements are some civil society organizations opposing? Intellectual property overreach is certainly one thing that we commonly fight against. It would be more constructive to provide feedback on how to make the agreement more balanced and in favor of fair use instead of opposing free trade agreements as a whole.
  3. We need to discuss how free trade agreements can positively enhance our digital rights, even if they don’t directly negotiate them. Banning data localization through free trade agreements might be an effective way of maintaining the cross-border data flow.

 

 

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