G7 agrees on principles to govern Digital Trade

Trade Ministers of the G7 – a group of wealthy nations composed by the United States, Japan, Germany, Britain, France, Italy, and Canada – agreed on principles to govern digital trade. The principles covered the issues of open digital markets; cross border data flows; safeguards for workers, consumers, and businesses; digital trading systems; and fair and inclusive global governance. With regards to data flows, G7 Members expressed concern with growing data localization measures, and reinforced their support to the principle of “data free flow with trust” (DFFT). This principle had been enshrined before in the G20 Osaka Leaders Declaration from 2019. On that occasion, the ‘Osaka Track’ was launched, a process that aims to intensify efforts on international rule-making on the digital economy, especially on data flows and e-commerce. Three G20 members, India, Indonesia and South Africa, opted out of the Osaka Track.

The recently agreed G7 principles expressed indirect support to ongoing negotiations taking place at the WTO’s e-commerce Joint Statement Initiative (JSI), among a subset of the WTO membership. The WTO is mentioned as the organization where ‘common rules for digital trade should be agreed and upheld’. The G7 also expressed support for rendering the WTO Moratorium on Customs Duties on Electronic Transmissions permanent, an issue that will be discussed in the next WTO Ministerial Conference (MC-12), scheduled to take place from 30 November to 3 December in Geneva.

The G7 principles have significant political importance, as they show the will to overcome differences between the US and the EU when it comes to regulating data flows, in particular different approaches to personal data. The principles could serve as a first step towards a common rulebook of digital trade among Members. The G7 also sends a message to third parties, as they express their ‘opposition to digital protectionism and digital authoritarianism’. The principles were called a ‘genuine breakthrough’ by British officials. The UK holds the Presidency of the G7 in 2021.