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Why are cross-border data flows essential to modern supply chains?
Cross-border data flows are essential for efficient, resilient, and interconnected global supply chains. They enable real-time coordination, including traceability, custom clearance and the deployment of digital tools such as IoT and AI-driven analytics.
Restrictive data policies, however, can create significant barriers that disrupt these interconnected systems. Such restrictions slow down trade, increase operational costs, and disproportionately impact MSMEs – the backbone of global economies – who may be excluded from global markets due to complex, costly compliance requirements.
What’s stopping data from moving freely?
Despite their critical role, cross-border data flows face growing regulatory hurdles. The lack of multilateral coordination and a fragmented regulatory landscape create barriers to trade and disrupt supply chains. Key issues range from data localisation mandates – which require companies to store and process data within national borders – to conflicting privacy and cybersecurity rules which increase compliance burdens. These fragmented regulatory approaches create uncertainty and act as non-tariff barriers to trade. They create inefficiencies, limit business opportunities and undermine the ability of companies to optimize supply chain operations, international scalability and competitiveness.
ICC recommendations: what can policymakers do to fix it?
- Pursue new rules at the WTO to enable trusted, secure, and predictable cross-border data flows.
- Promote risk-based approaches that differentiate between personal and non-personal data.
- Ensure interoperable data standards and avoid blanket localisation requirements that require all data, regardless of type, to be stored locally.
- Protect Confidential Business Information (CBI) in trade and data policies.
- Invest in MSME-friendly digital trade ecosystems, including trusted trader programmes.
