Unfree Flow with No Trust: The Implications of Geoeconomics and Geopolitics for Data and Digital Trade

The recognition that the modern economy is increasingly driven by data and on-line commerce has led to a number of initiatives to establish a global data governance regime that promises “data free flow with trust” or DFFT, and an associated open e-commerce regime. Since then, notwithstanding progress in formulating proposals to build the trust that is the key to enabling free flow, international frictions have pushed in the opposite direction and today’s reality is closer to unfree flow with no trust than it is to DFFT. The issues go beyond the technical and legal frameworks required to build trust at the level of private participants in the digital economy – the household/consumer and corporations. They extend to the geoeconomics and geopolitics of the knowledge-based and data-driven economy that emerge from the contest for the rising economic rents that this economy generates and the parallel contest for leadership/dominance of the new general purpose and dual-use technologies built on the nexus of big data/machine learning/artificial intelligence. This note discusses how data and digital trade policies are shaped by the new geoeconomics and geopolitics and how these are in fact endogenous to the technological conditions of the age.