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Data Flows in FTA's

Following the adoption of the data flows compromise text in the first quarter of 2018, which allows the EU to include data flows in FTA’s, the text was presented in the latest EU-Indonesia FTA negotiation round on July 13th. The text is divided into two paragraphs, the first aiming to ban forced data-localisations requirements and the second carves out data-flow restrictions to protect privacy. In addition to this, a paragraph will be added to the relevant Article addressing cooperation on regulatory issues with regards to digital trade. The EU awaits the reaction of Indonesia on the text, however the actual final text included in the FTA will be the result of negotiations between the two parties.

Indonesia is the first country to whom the text was presented. Expectations are that a data flows text will also be presented to countries such as Singapore and Japan, with whom the EU recently finalized trade agreements and are currently undergoing legal scrubbing, translation and ratification processes. In the future, data flows texts are also likely to be included in FTA’s with countries such as Australia, New Zealand and Chile.

Data flows texts in FTA’s are key for the textile industry due to the  cross-border supply chains the sector relies on. From the design of the products to the delivery of the clothing to customers, companies must move both personal and non-personal data across global borders to ensure the smooth functioning of supply chains. Major obstacles include data localization requirements, which force textile companies to put data or use servers in the countries they trade with. This severely impacts data mobility possibilities however, hopes are that the introduction of data flow texts in FTA’s will reduce the restrictions encountered by the branded clothing industry along the road.

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