A new wave of protectionism is spreading worldwide in the form of what’s been dubbed “data protectionism.” Many countries have begun adopting restrictions to prohibit cross-border data flows and mandate that businesses use only domestic data centers. While experts agree that certain types of personal information or anything related to national security must be protected, excessive data protectionism risks hampering global economic growth.
China adopted its new “Cybersecurity Act” two years ago. It requires businesses to undergo government security assessments if they wish to transfer “important” data overseas. It also says the data must be stored in servers within mainland China. Experts say foreign firms operating in the country are becoming increasingly fearful about how the rules will be implemented.
And it’s not only China that’s imposing new rules. According to the Japan External Trade Organization, Vietnam began implementing similar restrictions from January to require data localization.
India is currently contemplating imposing new restrictions on data outflow. Russia and Nigeria have also adopted data localization measures.
Japan will kick off the discussion this weekend at the G20 Ministerial Meeting on Trade and Digital Economy in Tsukuba. But countries are divided on the issue.
The US is a firm believer in free data flow and China will not easily give up its own data restrictions. Drawing a fine line between “data protection” and “data protectionism” may also be a difficult issue. Intense debate is expected on how member countries define the concept of “trust” that will enable the free flow of data.