A joint WTO-OECD report reveals the significant economic impact of regulating data flows globally

A joint report by the World Trade Organization (WTO) and Organization for Economic Cooperation and Development (OECD) sheds light on the profound economic implications of the policies that govern the cross-border data flows and data localization. The study, titled "Economic Implications of Data Regulation: Balancing Openness and Trust," highlights the growing importance of data flows in society and the global economy, while also warning about the risks of regulatory fragmentation.

The report reveals that a global approach that balances the free flow of data with trust guarantees could lead to a 3,6% increase in world exports and a 1,77% increase in global GDP. Developing countries would benefit the most, with a potential GDP increase of over 4%.

On the other hand, the study warns that "total fragmentation," where each country completely restricts its data flows, could result in a 4,5% decrease in world GDP and a reduction of 8,5% in the exports.

The report also highlights that the lack of regulation of data flows can have negative economic consequences, such as reduced trust in online transactions.

As regards measures that impose local storage or processing of data, the report stresses that their impact varies depending on the type of measure applied, and that developing economies would benefit the most if these restrictions were removed.

The report does not include statements from specific individuals, but it does emphasize the need for policymakers to better understand the benefits and costs of their regulatory decisions regarding data flows.