Despite the rapid growth of digital trade, one of the biggest remaining barriers to Internet trade are government restrictions to cross-border data flows.
A recent Brookings Institute paper, The Internet, Cross-Border Data Flows and International Trade, discusses the importance of the Internet and cross-border data flows for international trade, and it proposes steps that governments should take to apply existing international trade rules and norms and identify where new trade rules are required to further support international commerce and trade.
According to the paper, “Governments are restricting the internet in ways that reduce the ability of businesses and entrepreneurs to use the Internet as a place for international commerce.” This, in turn, limits consumer access to goods and services. It’s important to protect digital trade because the Internet allows consumers worldwide access to products that drive innovation and growth, and help them become more productive and effective.
The success of the Internet has been largely due to the limited government involvement (across countries) that has allowed it to evolve and grow over the last two decades. As more time has passed, there has been more and more government involvement both in individual countries, and as a whole through trade agreements and international organizations policing it.
In some circumstances this government involvement is needed, such as in cases of theft, child pornography, or intellectual property infringements. But more often, government regulation of the Internet is used to suppress people, or to unfairly give home companies an unfair competitive advantage in trade. This digital protectionism is most commonly seen when governments require companies to host and store data within their own country, even when it is inefficient and not cost effective.
The paper states, wisely that the key challenge going forward will be “maintaining as much as possible of the open nature of the Internet while limiting government intervention to what is necessary to address the harms associated with its use.”
In negotiating trade agreements around the world, the U.S. should work to ensure that international markets, enterprises and individuals can move and maintain data and information across borders in a reliable and secure manner. We have a vital opportunity to facilitate global e-commerce in the region, and it’s important that we use it to enrich the broader regional economy.
Denys Emmert is the Public Policy intern at SIIA. He has a degree in marketing and political science from Florida State University.
Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow the SIIA Public Policy team on Twitter at 
David LeDuc is Senior Director, Public Policy at SIIA. He focuses on e-commerce, privacy, cyber security, cloud computing, open standards, e-government and information policy.
Keith Kupferschmid
Mark Schneiderman
Laura Greenback