Strict privacy regimes, requests to use local data centres and outright bans to transfer data abroad are a few examples of policies imposed recently that restrict data from crossing national or regional borders. This paper is the first one to propose a comprehensive taxonomy of these restrictions, which has a bearing on international trade law.
I would like to thank my colleagues Hosuk Lee-Makiyama and Erik Van der Marel for the precious discussions that guided the development of this taxonomy. I am also grateful to Anupam Chander, Martin Luther King, Jr. Professor of Law at the University of California, Davis, for his helpful comments.
1. Restrictions on data flows on the rise
Restrictions on cross-border data flows are not new, but they have mushroomed in the last decade (Figure 1). Strict privacy regimes, requests to use local data centres and outright bans to transfer data abroad are a few examples of policies imposed recently that restrict data from crossing national or regional borders.
Figure 1: Cumulative number of restrictions on cross-border data flows (1960-2017)
Source: Own calculations based on data retrieved from Digital Trade Estimates database and legal texts.
The data revolution is both the reason behind this trend and the unwanted victim of these policies. The increasing reliance on data in our economies has raised concerns among policymakers that felt the need to respond promptly to this development with new legislation. However, the novelty of the data revolution and the difficulty of policymakers to grasp its transformational impact on the economy led to responses that impose significant costs on the economy (ECIPE, 2014; ECIPE, 2016) and on foreign businesses (USITC, 2014).
The objective of this article is to propose a basic taxonomy of restrictions to cross-border data flows, which has a bearing on many areas of law, including international trade and the protection of personal information.
 The data refer to 64 economies. In addition to the 28 member states of the EU, the analysis covers the following countries: Argentina, Australia, Canada, Chile, China, Colombia, Costa Rica, Ecuador, Hong Kong, Iceland, India, Indonesia, Israel, Japan, Korea, Malaysia, Mexico, New Zealand, Nigeria, Norway, Pakistan, Panama, Paraguay, Peru, Philippines, Russian Federation, Singapore, South Africa, Switzerland, Taiwan, Thailand, Turkey, United States and Vietnam.