Navigating WTO Negotiations, FTAs, and Data Governance in the Digital Age

Navigating WTO Negotiations, FTAs, and Data Governance in the Digital Age Presented by: Sheng Zhang, Associate Professor & Assistant Dean Deputy Secretary General, China International Investment Arbitration Forum Date: 25 January 2021 WTO Negotiations and FTAS WTO Negotiations - 2016: Voicing their support for stepping up work on issues related to trade and electronic commerce. Canada, China, the European Union, Japan, Korea, Switzerland and the United States encouraged members to reinvigorate and widen discussion on e commerce at a meeting of the WTO's Goods Council on 14 July. - China proposes that the discussions at the present stage focus on promotion and facilitation of cross-border trade in goods enabled by internet, together with services directly supporting such trade in goods, such as payment and logistics services. - 2019: China and 75 WTO Members Released Joint Statement on Electronic Commerce in Davos Multilateral Level - 2016 G20 Digital Economy Development and Cooperation Initiative • We support ICT policies that preserve the global nature of the Internet, promote the flow of information across borders and allow Internet users to lawfully access online information, knowledge and services of their choice. At the same time, the G20 recognizes that applicable frameworks for privacy and personal data protection, as well as intellectual property rights, have to be respected as they are essential to strengthening confidence and trust in the digital economy. Free Trade Agreements - China-New Zealand FTA 2008 • - Mere reference to ecommerce China-South Korea FTA 2015 • Chapter 13 Ecommerce • Article 13.5 Protection of Personal Information in Electronic Commerce • Recognizing the importance of protecting personal information in electronic commerce, each Party shall adopt or maintain measures which ensure the protection of the personal information of the users of electronic commerce and share information and experience on the protection of personal information in electronic commerce. - 2020 RCЕР • Chapter 12 Ecommerce  SECTION D PROMOTING CROSS-BORDER ELECTRONIC COMMERCE o Article 12.14 Location of Computing Facilities 1. The Parties recognize that each Party may have its own measures regarding the use or location of computing facilities, including requirements that seek to ensure the security and confidentiality of communications. 2. No Party shall require a covered person to use or locate computing facilities in that Party's territory as a condition for conducting business in that Party's territory. o Article 12.15 Cross-border Transfer of Information by Electronic Means 1. The Parties recognize that each Party may have its own regulatory requirements concerning the transfer of information by electronic means. 2. A Party shall not prevent cross-border transfer of information by electronic means where such activity is for the conduct of the business of a covered person. Features - Priority over Sovereignty and Security - Data Localization - Developments toward Protection of Privacy and Multilateral Initiative - Different Data Realms between the US, EU and China Domestic Efforts Data Grades and Classifications - Data Security Law (Draft for comments) (2020) • [Article 19] The State shall implement data protection for data at different grades and classifications, according to the degree of importance to economic and social development; and according to the impact on national security, the public interest, or the lawful rights and interests of citizens or organizations if it is falsified, destroyed, leaked or illegally acquired, or illegally used. Facilitating Data Flows - Master Plan for the Construction of Hainan Free Trade Port (2020) • Phased Step-by-step Arrangement  Key tasks to be completed before 2025 o [11]. Facilitate data flow. Launch pilot projects on security management of cross- border data transfers to explore and develop a convenient and secure cross-border data transfer mechanism within the framework of national security management system for cross-border data transfers.  Key tasks to be completed before 2035 • [6]. Realize secure and orderly data flow. Invent new system design of data exit security and explore more convenient personal information security exit assessment methods. Carry out institutional matchup of personal information entry and explore to add institutional arrangement for cross-border flow of regional international data to improve the convenience of data transmission. Take the initiative to participate in international rule making on cross-border data flow and establish standards and regulations for data right authentication, data transaction, data security and blockchain finance. International Efforts - CPTPP • On November 20, Chinese President Xi Jinping told the 27th APEC Economic Leaders' Meeting that China will actively consider joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). - • Chapter 14 Electronic Commerce • Article 14.11 Cross-Border Transfer of Information by Electronic Means • Article 14.13 Location of Computing Facilities China-US Trade Deal (Phase 2) • Issues to be addressed • "The United States will turn to Phase Two of its trade negotiations with China in order to secure resolutions to important outstanding issues. These discussions will focus on intellectual property, technology transfer, and services market access issues that were not addressed in the Phase One agreement as well as critical issues in areas such as excess capacity, subsidies, state-owned enterprises, cybersecurity, data localization and cross-border data transfers, pharmaceuticals and medical devices, competition law enforcement, regulatory transparency, and standards." - Multilateral Negotiations • WTO • G20 • BRI • McKinsey Global Institute, China's Role in the Next Phase of Globalization, April 2017.  "China has opportunities to lead in each of the areas.... Second, China can help to bring the rest of the world online and lead international efforts to establish frameworks on data standards, cybersecurity, and artificial intelligence."