Digital trade and data Contents

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Summary

There is no single recognised and accepted definition of digital trade, but it is generally considered to encompass digitally enabled transactions of trade in goods and services. Digital trade requires the movement of data across borders. The Government has, on multiple occasions, emphasised digital trade and data in its FTA negotiations.

This is a pivotal moment for the Government to craft a clear approach to digital trade and data which will guide the development of its independent trade policy. We heard evidence calling for a cross-FTA strategy for digital trade and data in addition to the FTA-specific negotiating objectives which are currently available. The Government should produce and publish a digital trade and data strategy, clarifying the UK’s approach to digital trade and positioning it in relation to prominent approaches taken by other states.

Data protection rules and relevant provision in FTAs are complex and open to diverging legal interpretations. We welcome the Government’s attempts to address concerns about data protection through its data protection explainers. However, we have heard significant concerns about the data protection provisions and exceptions to the provision committing to the free flow of data in CEPA. We recommend that, as a part of its published impact assessments for future agreed FTAs, the Government includes its assessment of the agreement’s impact on the protection of UK citizens’ data.

Retaining an adequacy decision from the European Commission is a priority for both businesses and consumers. We welcome the Government’s progress in achieving a draft adequacy decision, and its focus on retaining such a decision. The Government should, as a part of its published impact assessments for future agreed FTAs, include an assessment of each agreement’s potential impact on maintaining an adequacy decision from the European Commission.

Accession to CPTPP is potentially a good opportunity for the UK in facilitating and encouraging digital trade. However, we heard that joining CPTPP may result in changes to the way data—particularly EU citizens’ personal data—is handled in the UK. We recommend that the Government states what changes it anticipates in the management of EU citizens’ personal data in the UK as a result of accession to CPTPP and the impact of any changes on UK stakeholders.

Amending the UKGDPR could create a simpler, more effective regulatory regime. We welcome the Government seeking to build on the UKGDPR but call on it to set out how it will depart from the EU’s GDPR while maintaining data adequacy and minimising any additional regulatory burden for businesses.

In its published impact assessments for each new FTA, we recommend that the Government includes an assessment of the impact of each agreement on its ability to regulate source code and algorithms at the domestic level.

The inclusion of consumer protection provisions in CEPA is a positive development. We heard calls to use these provisions as a starting point and to build upon them in future FTAs, particularly in relation to the information provided to consumers on e-commerce platforms, and mechanisms for dispute resolution for online transactions. The Government should clarify how it intends to build upon the provisions in CEPA in future FTAs, and how measures in addition to FTA commitments will be complementary in protecting UK consumers engaging in digital trade.

While a commitment to plurilateralism, particularly at the WTO level, is welcome, it is crucial that the Government also commits to transparency and parliamentary scrutiny in relation to WTO negotiations. We recommend the Government publishes both its objectives for the Joint Statement Initiative and its current proposals to allow for greater transparency and scrutiny.

Consultation was identified as an area for improvement in our report on CEPA. While the Government has engaged in consultation exercises and supported consultations undertaken by Which?, the Government’s consultation in this area still requires improvement. We recommend that the Government includes representatives from civil liberties organisations in its ETAG, or otherwise creates a mechanism to consult with them. In addition, we also recommend that the Government consults with stakeholders throughout ongoing negotiations, sharing working texts in confidence where possible and engaging with feedback on those texts.