Research On Data Localization Measures Under International Trade Rules

With the development of information technologies such as big data and cloud computing,the crossborder flow of data has become a norm.Because data flow can generate tremendous business value,data has become a valuable resource in the 21 st century.At the same time,the free flow of data poses a threat to national security and citizen privacy.To this end,many countries and economies such as Russia,the European Union,and China have adopted data localization measures of varying strengths to restrict the complete free flow of data.For example,China’s "Network Security Law" has established a "local storage + exception assessment" regulatory model.There are legitimate reasons for these measures,but to a certain extent it will increase the operating costs of foreign data service providers and affect the realization of the maximization of data benefits.It is for this reason that data localization measures are also considered to be a "digital trade barrier",which has led to the discussion of data localization measures under international trade rules.Since WTO rules are still currently valid multilateral trade rules,this article attempts to examine the legality of data localization measures from the GATS rules.Although the panel of experts and the appellate body can incorporate digital trade and its regulations into GATS adjustments through interpretation,the lag of the GATS rules themselves cannot be ignored.In view of the ongoing evolution of international service trade rules,we must pay full attention to the data localization regulation model established in the regional trade agreements led by the United States,Europe,and Japan outside the GATS rules.At present,the development of China’s digital economy is at a critical stage,and the complex international trade environment is also a huge challenge.Therefore,this article is problem-oriented and guided by international trade rules,not only to provide research ideas for the conformity of data localization measures generally adopted by member countries with international trade rules,but also to bring the data localization measures to China The coming challenges,and put forward practical countermeasures,with a view to providing assistance for the overtaking of the curve in China’s digital trade.In addition to the introduction and conclusion,this paper is divided into four parts.The first part is data localization measures and international trade disputes.Data localization measures are now widely adopted by sovereign countries and economies as a regulatory measure for cross-border data flows.The internal link between this measure and international trade is that the cross-border movement of data is the basis of digital trade,and data localization measures affect the free flow of cross-border data,which in turn hinders international trade.At the same time,developing countries such as China and the United States are at odds over whether data localization measures constitute a digital barrier to trade,and there is a possibility of international trade disputes in the future.The second part examines the legitimacy of data localization measures from the perspective of WTO.First,data localization measures are subject to GATS adjustments.The reason for this is that cross-border data flows are trade in services and data localization measures that restrict cross-border data flows affect trade in services.Second,clarify the data services that data localization measures may involve and analyze the meaning of the "none" commitment that member parties generally make under the corresponding type of data service.Finally,if the member’s data localization measures violate market access and national treatment commitments under the data services in question,whether and how exceptions can be invoked to justify legitimacy.The third part explores the data localization regulation model of the US,Europe and Japan-led regional trade agreements outside GATS.Because WTO rules can not completely adjust the emerging digital trade,and the US,Europe and Japan-led regional trade agreements to digital trade as one of the core issues,to some extent reflects the future direction of digital trade rules.The U.S.-Japan-led trade agreement struck a convergence in the commercial value of shared data flows,and as a result,a data localization regulatory model of "principles plus exceptions" and "prohibition of localization of data processing facilities" was established.This model is not only useful for the digital trade rules of the future multilateral trading system,but also has enlightenment to the countries to choose the model of data localization regulation that is in line with their own reality.The fourth part is the challenge and response of China’s data localization measures under the international trade rules.On the one hand,from the perspective of WTO rules,China is faced with two major challenges: first,to question the legality of data localization legislation,China should defend data sovereignty,and at the same time,we should flexibly invoke the GATS exception to deal with possible future digital trade disputes;On the other hand,from the perspective of the digital trade rules reached by the US,Europe and Japan-led RTA,the US,Europe and Japan are promoting the rules on a global scale,and our country should expand the depth and breadth of the negotiation of digital trade rules in the FTA,and at the same time,we should adopt the "principles and exceptions" model to promote the negotiation of WTO rules.