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G7 countries reach breakthrough on digital trade principles, mark concern over data localisation, encryption

"We should address unjustified obstacles to cross-border data flows, while continuing to address privacy, data protection, the protection of intellectual property rights, and security," the communique issued following the G7 trade ministers' meeting said.

October 22, 2021 / 11:39 PM IST
Representative image

Representative image

G7 or the Group of Seven wealthy nations on October 22 reached a breakthrough on a joint set of principles to govern cross-border data use and digital trade.

Trade ministers of the seven countries, who met in London, arrived at a consensus on the 'G7 Digital Trade Principles'. In a statement issued following the meeting, concerns were marked over domestic policies related to data encryption and data localisation.

"We are concerned about situations where data localisation requirements are being used for protectionist and discriminatory purposes, as well as to undermine open societies and democratic values, including freedom of expression," the communique published by Britain, a G7 member, said.

The statement assumes significance as India has been contemplating measures for data localisation -- i.e. restricting the flow of data related to Indian users across the borders by storing and processing it within the country.

"We should address unjustified obstacles to cross-border data flows, while continuing to address privacy, data protection, the protection of intellectual property rights, and security," the communique further noted.

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On data encryption, which led to a legal battle between New Delhi and Facebook Inc's WhatsApp earlier this year, the statement issued by G7 said businesses should not be forced to provide encryption keys.

"Businesses should not be required or coerced to transfer technology or provide access to source code or encryption keys as a condition of market access. At the same time, governments must retain sufficient flexibility to pursue legitimate regulatory goals, including health and safety," it said.

The communique further added that "we oppose digital protectionism and authoritarianism and today we have adopted the G7 Digital Trade Principles that will guide the G7's approach to digital trade."

Notably, the G7 comprises of the United States, Japan, Germany, Britain, France, Italy and Canada.

The agreement reached by the elite global group is considered to be significant as it could liberalise hundreds of billions of dollars of digital trade.

The deal sets out a middle ground between highly regulated data protection regimes used in European countries and the more open approach of the US.

ALSO READ: G7 plan to dislodge China as biggest source of infrastructure funding to benefit India

The principles covered open digital markets; cross border data flows; safeguards for workers, consumers, and businesses; digital trading systems; and fair and inclusive global governance, the statement said .

A British official with knowledge of the deal said: "This agreement is a genuine breakthrough that is the result of hard diplomatic graft.

"All of us rely on digital trade every day, but for years the global rules of the game have been a wild west that have made it difficult for businesses to seize the immense opportunities on offer."

With Reuters inputs.
Moneycontrol News
first published: Oct 22, 2021 10:15 pm

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