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Editorial: Creating data rules can aid digital economy but WTO must also reform

  • December 26, 2021
  • , The Japan News , 3:14 p.m.
  • English Press

Facilitating the free flow of data across borders is essential for economic development in the digital age. Creation of international rules must be sped up.

 

Of the member countries and regions of the World Trade Organization, 86 members, including Japan, the United States, the European Union and China, have agreed on some rules for electronic commerce, which involves the exchange of data.

 

The agreement covers eight items, including measures to protect consumers from fraudulent activities and the use of electronic signatures in trade procedures. They will continue negotiations on the remaining 20 or more items.

 

WTO agreements, which are responsible for the liberalization of trade in goods and services, have no rules on data distribution. This is the first time that an agreement has been reached in this area, though only partially, and the move toward cooperation is a welcome development.

 

Commercial transactions involving the exchange of data, such as those via internet browsing and video distribution, are expanding. The big data that accumulates from such transactions is called the “oil of the 21st century.” It is indispensable for the utilization of artificial intelligence and is the source of producing new products and services.

 

However, there is a limit to the data of a single company. It is important to distribute the data held by countries and many companies across national borders and use it as the property of society as a whole.

 

In an effort to create international rules for this purpose, Japan proposed a framework of negotiations at the Group of 20 summit talks in Osaka in 2019. It is hoped that Japan will continue to lead the discussions.

 

Although China has joined the agreement, the nation’s laws oblige data collected within that country to be stored in principle on its own servers for the purpose of security and protection of personal information. There are also concerns about the uncertainty of the law’s implementation.

 

In the field of automated driving, where research is progressing, analysis of the vast amount of data obtained from sensors is necessary to prevent accidents, and data protectionism like China’s could hinder this. Japan must strongly press for reform through negotiations.

 

On the other hand, while the WTO inherently is based on the principle of consensus among its 164 member countries and regions, the latest agreement was a product of willing countries and regions. In addition, 67 countries and regions have agreed on rules for licensing procedures in the service industry and negotiations are continuing in such fields as environmental measures.

 

Even as the conflict between advanced and developing nations has been making it difficult to reach an overall consensus, emerging countries that are not participating in such agreements are said to be criticizing the deal as “not respecting the philosophy of the WTO.”

 

While there is a certain significance in the agreement of willing countries and regions, it is desirable to avoid division with the countries left out. Members should also accelerate discussions on the reform of the WTO, which has fallen into a dysfunctional state.

 

— The original Japanese article appeared in The Yomiuri Shimbun on Dec. 26, 2021.

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