The Regulation of Data Flows Through Trade Agreements

Abstract

Cross-border data flows are essential to the contemporary digital economy. While states are eager to seize the opportunity of digitization as the fourth industrial revolution, they also often impose borders in the digital space, so as to protect vital interests, such as national security or privacy. Free trade agreements have gained new value in the last decade and shape the regulatory environment for digital data by overcoming some of the problems and inconsistencies of the multilateral regime of the World Trade Organization (WTO) and by active norm-creation in discrete fields of digital trade. The Article maps these developments by looking first at the legal foundations laid by the WTO and then at the many free trade agreements that regulate digital trade beyond the older multilateral rules. The Article examines their design and evolution with a particular focus on the models that the United States and the European Union have developed. The Article contextualizes and assesses the impact of free trade agreements for the burgeoning digital economy by highlighting the positive as well as the many negative sides such a proactive, power-driven norm-setting may have, in particular in an environment as fluid as the digital space.

Keywords: international trade law, WTO, free trade agreements, digital trade, internet, data flows