Directions of development and regulation of cross-border data flows in international trade

Abstract

The problem of using cross-border data flows, which are becoming an important factor of production for the sustainable development of modern international trade in goods and services has been analysed. In international exchange, the importance of digital services continues to grow steadily, and as this rises, global data flows are increasing too. The latter, while serving the interests of global digital platforms, can nevertheless contribute to the diversification of developing countries’ exports and increase their participation in global value chains. The increase in digitalization of companies due to the rapid introduction of new technologies (data analysis, cloud computing) has raised their importance as a factor in commercial transactions, affecting both new and traditional industries. Despite the advantages for companies, consumers and national economies arising from the ability of organizations to easily exchange data across borders, many countries at all stages of development have established barriers to cross-border data transfer. The most common concept of such restrictions has become data localization, the implementation of which is a significant burden on the growth of the Gross National Product. The digital mercantilism of countries considered in this article is a response to the challenge of increasing the country’s participation in the international division of labour in the digital economy. However, barriers for cross-border data transfer also delay and increase the cost of developing new and innovative products, undermine the ability of local multinational companies to use global platforms to facilitate collaboration between firms, universities and other research organizations and promote their own innovations. International practice has not yet developed a single, dominant approach in the context of regulating cross-border data flows, but addressing this issue requires a new format of multilateral regulation that has not been used for international trade in traditional goods and services.