Cross-border data flows underpin data sharing and promote digital trade. The challenge is to foster a global digital environment that enables the movement of data across international borders while ensuring that, upon crossing a border, data are adequately protected – a concept known as data free flow with trust (DFFT). 

The OECD supports efforts to advance DFFT through empirical work to map emerging regulations and understand their impact, as well as through DFFT Expert Community, which provides a space for stakeholders to inform the development of concrete responses to practical challenges related to DFFT.

A range of instruments support trust in data flows from different but often complementary perspectives. These instruments can be broadly categorized as:

• Unilateral mechanisms enabling safeguarded transfers (e.g. adequacy decisions)
• Intergovernmental arrangements (e.g. APEC Cross-border privacy regulation)
• Trade and digital economy agreements (e.g. data flow and privacy provisions in regional trade agreements)
• Standards and technology driven initiatives (e.g. privacy enhancing technologies)

Overall, a streamlined global policy landscape that leverages the commonalities that exist across countries will be crucial to avert compliance fatigue among businesses and support data protection authorities in their mandate.

Joint empirical work with the World Trade Organization (WTO)  suggests that cross-border data flows are a key enabler of the global economy. In fact, if all countries were to restrict their data flows, global GDP could fall by 5%. The empirical analysis also shows that not having data flow regulation is not an optimal solution and that regimes that combine data flows with trust generate better economic outcomes. If all countries were to adopt these approaches, global GDP would grow by 1.77% and exports by 3.6%.

Measures that explicitly mandate that data be stored and/or processed domestically are growing and becoming increasingly restrictive. The business community has highlighted some of the unintended consequences of these measures. Data localisation measures can raise data management costs by 15-55%, they can also lead to higher prices for downstream users and reduced resilience. These issues are exacerbated as measures can sometimes be subject to legal uncertainty.