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Legal Analysis On Data Localization Measures In The Context Of International Trade

Posted on:2020-02-21Degree:MasterType:Thesis
Country:ChinaCandidate:J J ZhengFull Text:PDF
GTID:2416330623953528Subject:International Law
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With the development of big data technology,the data is experiencing explosive growth,and the uncertainties and threats in the process of data transfer has become increasingly prominent.Currently,data abuse,data surveillance from other countries,destruction on privacy rights,etc.have troubled nearly all the countries all over the world,especially those developing countries,which is further alarmed by the US PRISM Surveillance Program in 2013.In such context,many countries have tightened their regulatory policies on cross-border data flow to restrict the cross-border data transfer,among which,the measure of data localization is most commonly adopted.The measure of data localization requires that the data collected in or originated from the territories shall be stored locally,which has been widely adopted in major developing countries including China,Russia,Brazil,India,etc.For example,China promulgated its Cyber Security Law in 2016,which requires that personal information and important data should be stored locally.As demonstrated above,the occurrence of data localization measures is based on complicated context and consideration,which is of rationality.However,cross-border data flow is meanwhile the basis for international trade cooperation and development,especially in the context of digital trade,which requires prosperous cross-border data transfer.Thus,data is currently the most valuable resources for enterprises to carry out their trade,and directly affects their business model and business efficiency.The data localization measures,which contributes to the protection of national securityand personal privacy,will also potentially harm the freedom and order of international trade.The United States has issued numerous reports,which consider that the measures of restricting cross-border data transfer,especially the data localization measures,constitute digital trade barriers,which violate the international trade rules.The contradictory standings from different countries on the data localization measures have therefore triggered a hot debate on the legitimacy and rationality of such measures.Under the current international trade framework,WTO rules are still the most important trade rules among countries.Data localization measures set restrictions on the transfer of cross-border data flows,which mainly affect the trade in services instead of goods.Therefore,the involved WTO agreement in this case is GATS.Firstly,in the process of service trade,the trade mode of cross-border supply and commercial presence will be affected by data localization measures,therefore the GATS rules are applicable to data localization measures.Secondly,it is necessary to analyze whether data localization measures violate the specific commitments under GATS.Upon the analysis on the existing commitments under the GATS framework,it can be concluded that the data localization measures bear certain degree of risk in violating the “domestic law obligations” in Article VI and “national treatment obligations” in Article XVII of the GATS.Therefore,thirdly,we need to further exam whether the exception clauses under GATS can be invoked for violation of the aforementioned obligation.The data localization measures adopted by countries are mainly based on the consideration of national security and personal privacy protection,which provide the possibility of invoking the security exception and privacy exception under GATS.At present,there have no cases ever invoked the aforementioned exception clauses,which has further increased the flexibility and uncertainty of GATS rules on data localization.Finally,it shall be noted that the degree of risk in violating the aforementioned commitments and the possibility of invoking the exception clauses are largely dependent on the specific legislative situation of the relevant countries,therefore the result may vary from countries to countries.Negotiations on new WTO rules have been stagnating since the Doha Round.In the absence of substantive progress on cross-border data transfer rules under WTO framework,many countries and international organizations have begun to promote the construction of regional rules in order to provide direction and ideas for the design of globally-accepted rules on cross-border data transfer.At present,the Cross-border Privacy Rules System(CBPR)set up by APEC provides relevant detailed operational standards for cross-border flow of personal data,which carries out its regulation through both industry self-regulation and administrative supervision.In addition,regional and bilateral trade agreements such as TPP,Ti SA and TTIP also attempt to make arrangements and regulations on cross-border data flows and data localization measures.This paper considers that it is an effective way to start negotiations on regional and bilateral basis since the current WTO rules do not provide explicit rules and is hard to be pushed forward.At present,China is in the period of strategic deployment on network security and cross-border data transfer rules.The current complex international environment is both a challenge and an opportunity for us.For China,an urgent task currently is to clarify the multiple values involved in cross-border data transfer issue and to set rules that are consistent with the current development status of China.Over-free cross-border data transfer policies are harmful to our data sovereignty and national security,as well as to the protection of citizens' privacy right;whereas,too strict data localization requirements will inhibit the momentum of China's current development in the Internet economy and digital trade.Based on China's current development,it would be suitable for China to establish a legislative concept of “giving priority to national security and data sovereignty,and attaching equal importance to personal privacy protection and trade development”,and adopt data classification and grading measures to achieve the aforementioned different regulatory value objectives.Secondly,China should make endeavors to strengthen the coordination between domestic legislation and the existing international rules so as to reduce the international community's doubts on the legitimacy on our data localization measuresand strategy deployment.Thirdly,at the international level,China should actively promote negotiations on rules concerning digital trade,cross-border data transfer and data localization,which include in promoting the reform of WTO rules and also pushing forward the development of regional and bilateral negotiations,trying to take initiative in the reform rather than to be a passive recipient.
Keywords/Search Tags:Cross-border Data Transfer, Data Localization, International Trade Rules, National Security
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