Looming Free Trade Agreements Pose Threats to Privacy

Abstract

Free trade agreements (FTAs) don’t include requirements to strengthen data privacy laws, other than by vague and unenforceable gestures. While many FTAs are quite benign to privacy, others may be toxic to domestic privacy laws which impose restrictions on cross-border data transfers, but the toxicity varies. The European Union has made it clear that ‘EU data protection rules cannot be the subject of negotiations in a free trade agreement’, although existing EU rules can be reflected in FTAs.

In 2018, the threats to privacy legislation posed by FTAs have suddenly become more real. In February the US reiterated complaints against Chinese legislation restricting personal data exports, under the WTO’s General Agreement on Trade in Services, (GATS, 1995). In March, a FTA was signed by 11 Asia-Pacific countries (including neither the US nor China) which has much stronger anti-privacy provisions than GATS: the revised ‘Comprehensive and Progressive Trans-Pacific Partnership’ (was the TPP, now the CPTPP). The US is now considering re-joining TPP, after the Trump administration initially pulled out. Two other Asia-Pacific FTAs are under re-negotiation (NAFTA) or negotiation (RCEP).

This article compares the approach being taken in each of these three FTAs (insofar as is known), and the GATS, and the potential effects of these agreements on data privacy laws. It concludes that, after decades during which free trade agreements have been a potential threat to privacy, the potential has now come much closer to reality. The anti-privacy virus is out of the bottle, with its effects already felt in a bilateral FTA and likely to be replicated in NAFTA. Whether the potentially more powerful RCEP agreement will follow or perhaps abandon this direction is unpredictable, as is the future extent of the US’s influence.

Keywords: free trade agreements, FTA, data protection, privacy, WTO, USA, China, CPTPP, RCEP