Abstract
Due to the economic and strategic importance of telecommunication services, as well as projected growth rates in the information industries, countries have adopted policy restrictions on transborder data flows (TBDF) both into and out of their countries. The reasons for these measures include privacy concerns, national security and the competitiveness of national industries. The short‐term effects on multinational industries have been an increase in data processing costs and a loss of efficiency. Although trade has not yet been restricted in the long‐term, it is possible that trade, particularly in services, will be severely affected. The evolution and types of barriers to transborder data flow are described and their immediate impact on the telecommunications industry and possible ramifications for world trade in general are assessed.
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