The diffusion of data rules across trade agreements potentially leads to the emergence of distinct data regulatory regimes that fragment global data governance. This scenario raises pivotal questions for stakeholders: Who are the rule-makers? Is global data governance fragmenting into distinct regimes?

Data governance rules that tackle digital trade, such as cross-border data flows, data localization, and data privacy, spread through preferential trade agreements (PTAs). These provisions diffuse when countries incorporate new data rules from existing PTAs into subsequent ones. Countries have incentives to influence the spread of their respective approaches towards data because of first- or early-mover advantages in rule-making.

Current literature highlights three primary actors leading rule-making on data governance: China, the European Union (EU), and the United States (US). Each has distinct regulatory approaches: the US favours deregulation and free information flow, China prefers government control, and the EU emphasizes robust privacy protection. These differences manifest in major regional trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), which reflect the US’s and China’s priorities, respectively.

The author conducts an analysis of the prevalence and spread of novel data provisions in trade agreements to shed light on the landscape of global data governance. Novel data provisions refer to provisions that are first introduced in agreements based on the date of signature. The authorship of novel data rules and the spread of these rules across other countries and agreements reflect the extent of the rule-making impact of these actors in global data governance.

The result of descriptive network analysis reveals that the majority of novel data provisions that are taken up by signatories originate in US-involved agreements. In other words, the US prevails as a major rule-maker in global data governance. In comparison, the EU and China have a lesser impact on rule promotion, with few novel data provisions introduced in their agreements that have diffused across other agreements. Specifically, seven unique data provisions have been introduced in the US’s agreements, whereas there are only two novel provisions in the EU’s agreements and one novel provision in China’s agreements. Apart from these major players, countries such as Singapore and New Zealand are also forerunners in rule-making for data governance.

It remains to be seen whether global data governance will fragment into “three data kingdoms”. Although the agreements signed by China, the EU, and the US, respectively, have different priorities, this has not yet resulted in the fragmentation of global data governance. Various scenarios could potentially emerge: one possibility is a race to the top where data flows from countries with lower standards to those with higher ones, fostering a global digital divide. Conversely, regulatory competition may lead to a race to the bottom, promoting data protectionism over free and secure data flow. Another challenge lies in implementing stringent rules, potentially resulting in reliance on flexible exceptions that undermine regulatory harmonisation.

By XU, Ni Scarlet

Researchers: LEE, Jesslene