Towards a Robust Architecture for the Regulation of Data and Digital Trade

Abstract

The digital transformation occurring worldwide poses significant challenges for a governance framework that evolved gradually and incrementally over centuries, shaped by lessons learned during the long era of industrialization and globalization in which much of today’s technology was still science fiction. At the heart of the governance challenge is “datafication” — the capture of truly astronomical amounts of information on the functioning of societies, economies and even the industrial processes of firms. Once transformed into data, information can be analyzed and used to modify the behaviours that generated the information in the first place for economic, political or geopolitical advantage. Given the multiple roles that data plays — as the medium of digital commercial transactions and digital trade, as a valuable capital asset, as part of the intangible infrastructure of the digital economy, and as the very fabric of a modern information society — the governance challenge is immense. Moreover, given the multitude and pervasiveness of data analytics applications, there is urgency in coming to grips with the regulation of data, since other governance challenges, ranging from climate change to income distribution, depend on safeguarding democratic processes and functional markets. Numerous efforts are under way to address aspects of the regulation of data. These efforts include the recently launched e-commerce negotiations of the World Trade Organization (WTO), other work programs under the WTO, and the initiatives of the Group of Twenty (G20) on the free flow of data based on trust. There is as well work in more specialized areas, such as competition policy and intellectual property (IP), taxation in the digital realm, and multi-stakeholder processes addressing the plethora of other digital governance issues ranging from privacy to cyber security. This paper suggests a conceptual framework for addressing the multi-dimensional policy dilemma that societies now face of reconciling the many competing policy priorities raised by digital transformation domestically and of preparing the ground for negotiations toward a robust and broadly acceptable governance regime internationally, fit for purpose for the age of data.