The G7, a group composed of Germany, Canada, the United States, France, Italy, Japan and the United Kingdom, the countries of the world with the greatest political, economic and military weight, have signed an agreement to establish what they call the ‘Principles of Digital Trade’ that they will follow from now on. The initiative, signed last Friday, establishes a use of cross-border data and digital commerce that is halfway between the highly regulated data protection regimes used in EU countries and the more lax approach that exists in the United States.
In the agreement, signed in London, the G7 powers are opposed «to digital protectionism and authoritarianism.» «Digital and telecommunications markets must be competitive, transparent, fair and accessible to international trade and investment,» reads a statement issued by the group.
The Digital Commerce Principles cover open digital markets, cross-border data flows, worker, consumer and business protections, digital trading systems and fair and inclusive global governance, according to the statement.
«Digital trade – and international trade in general – must be at the service of our people. It should be used to support employment, raise living standards and respond to the needs of workers, innovators and consumers. It should support entrepreneurship and empower a whole range of businesses to participate in the global economy, especially women entrepreneurs and micro, small and medium-sized enterprises,» the statement said, urging that as the foundation of a thriving and innovative digital economy, the Internet be «open, free and secure».
In this sense, it is committed that electronic transmissions (including transmitted content) are free of customs duties and that data flows freely across borders with confidence («including the trust of individuals and companies»). The G7 is «concerned» about situations where data localization requirements are used «for protectionist and discriminatory purposes, as well as to undermine open societies and democratic values, including freedom of expression.» Therefore, the statement adds, «we must address unjustified obstacles to cross-border data flows, while paying attention to privacy, data protection, protection of intellectual property rights and security.»
The group stresses, however, that personal data must be protected by enforceable high-level rules, even when transferred across borders. «We will cooperate to explore commonalities in our regulatory approaches and promote interoperability among G7 members.»»
The paper also highlights the importance of open government data. «They can play a relevant role in digital commerce. Where appropriate, public sector datasets should be published in an anonymous, open, interoperable and accessible form,» the document states.
Regarding guarantees for workers, consumers and companies, the letter points out that there must be labor protections for workers who directly participate in or support digital commerce, «providing decent working conditions.» It also points out that there must be effective measures to ensure a high level of consumer protection when buying goods and services online and that companies have to have a secure digital business environment, «with the highest levels of cybersecurity and resistance against illicit or malicious activities.»
The G7 is also committed to reducing bureaucracy and promoting means that reduce legal, technical and commercial barriers to the digitalization of paper-based processes. It also advocates the development of single commercial windows to streamline stakeholder interactions with border agencies.
According to statements by a British official with knowledge of the agreement to the Reuters news agency, «this is a real breakthrough that is the result of hard diplomatic work.» «All of us depend on digital commerce every day, but for years the global rules of the game have been a wild west that has made it difficult for companies to take advantage of the immense opportunities on offer.»
At their meeting last July, the G7 finance ministers agreed in Chantilly (France) that digital companies pay taxes in the countries where they carry out their activity through the Internet even if they do not have a physical presence. An initiative later ratified by the OECD, since on October 8 136 countries of the OECD/G20 Inclusive Framework, representing 94% of global GDP, reached a historic agreement to reform the international tax framework, which will enter into force in 2023.