Digital trade and data Contents

Conclusions and recommendations

Government strategy and prominent approaches taken by other states

1.The Government has, on multiple occasions, emphasised digital trade and data in its FTA negotiations. We commend the Government’s ambition to address the barriers outlined by businesses and we agree that digital trade presents a range of opportunities which the Government should pursue. (Paragraph 24)

2.The UK has an opportunity to create a clear, innovative position on digital and data governance. 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. We note that the Government has “five pillars”, which are best classified as a set of principles, and do not constitute a cross-FTA digital trade strategy. (Paragraph 42)

3.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 recommend that the Government produces and publishes 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. We recommend it detail the Government’s long-term approach and policy objectives in relation to digital trade and data. The strategy should also include how domestic policies will interact with the United Kingdom’s FTA, multilateral, and plurilateral commitments in securing the Government’s long-term economic and non-economic digital trade objectives. (Paragraph 43)

Data protection

4.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 the Government produces an expanded data protection explainer which addresses these concerns in greater detail, drawing upon relevant legal and non-legal precedent. (Paragraph 53)

5.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. This assessment should outline the UK’s domestic data protection regime, any relevant commitments made in the new FTA, and any effects that those commitments have on the UK’s ability to maintain its data protection regime. (Paragraph 54)

6.Digital trade regulations are affected by a mix of domestic law and international commitments. The UK’s current and future FTA partners may have made commitments concerning the free flow of data to third countries. We recommend that the Government specifically addresses the practical risk of UK citizens’ data being passed onto third countries without sufficient safeguards in its published assessments of the impact on the UK’s data protection regime for future agreed FTAs, considering both legal and non-legal mechanisms to prevent such transfers. (Paragraph 60)

7.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. We recommend that, as a part of its published impact assessments for future agreed FTAs, the Government includes an assessment of each agreement’s potential impact on maintaining an adequacy decision from the European Commission. (Paragraph 70)

8.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. (Paragraph 71)

9.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. (Paragraph 72)

Source code, consumer protection, and online harms

10.We recommend that, in its published impact assessments for each new FTA, the Government includes an assessment of the impact of each agreement on its ability to regulate source code and algorithms at the domestic level. This should explain how source code and algorithms are currently regulated at the domestic level, the relevant source code and algorithm provisions in the relevant agreement, and how, if at all, they affect the Government’s ability to regulate in this area. (Paragraph 78)

11.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. We recommend the Government 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. (Paragraph 81)

12.Regulating online harms is of increasing relevance and importance. We heard concerns over the inclusion of commitments in FTAs which may limit the Government’s ability to regulate online harms at the domestic level, particularly in negotiations with the US. We commend the Government for its approach in refusing to accept constraints on its ability to regulate these harms, and hope that it will maintain this approach throughout negotiations. (Paragraph 85)

Work at the WTO and G7

13.The UK has an important opportunity to show leadership in multilateral negotiations at the WTO, complemented by its presidency of the G7 this year. We encourage the Government to continue to take the lead in negotiations at the WTO, and to consider opportunities to reform and update GATS. (Paragraph 90)

14.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 recognise that there is a tension between maintaining negotiating strategies and making information on proposals public, but urge greater transparency in this area. We note that the EU has published some of its proposals for the Joint Statement Initiative. We recommend the Government publishes both its objectives for the Joint Statement Initiative and its current proposals to allow for greater transparency and scrutiny. (Paragraph 94)

15.We heard support for making the WTO’s moratorium on customs duties on electronic transmissions permanent. We commend the Government for its incorporation of this objective in its FTA negotiations, but emphasise the importance of continuing efforts to make the moratorium permanent at the WTO. (Paragraph 97)


16.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 heard evidence suggesting that consultation with civil society organisations, such as civil liberties organisations, could be improved, though we note that the Government has consulted civil liberties organisations as a part of its National Data Strategy. We recommend that the Government includes representatives from civil liberties organisations in its ETAG, or otherwise creates a mechanism to consult with them. (Paragraph 103)

17.While other stakeholders were largely positive about the Government’s consultation mechanisms, they stressed the importance of consultation to be a dialogue rather than one-sided. As such, we recommend that the Government consults with stakeholders throughout ongoing negotiations, sharing working texts in confidence where possible and engaging with feedback on those texts. (Paragraph 104)

Published: 28 June 2021 Site information    Accessibility statement