Claire Coutinho is MP for East Surrey.
As the world’s first industrialised nation, Britain knows the value of getting ahead of the economic curve. Access to natural resources like coal and oil have driven historic and economic revolutions, but in the future the fuel of our economy will be data.
Data flows are already estimated to be worth up to £3 trillion a year to the world’s economy. But a global divide is opening up between those leaning towards digital protectionism, like China and the EU, and those pioneering data agreements.
Where once we had the iron curtain, we now have digital drapes. We must reject this impulse and secure access to the resource that will drive our future growth. Pursuing freer digital markets can propel a great British leap forward. To achieve this, we must put ambitious digital chapters at the heart of our trading agenda.
The global data divide has been developing over many years. It sees some countries restrict the transfer of whole swathes of data, with others taking a far more open approach.
For China, its restrictions form part of its protectionist Made in China 2025 industrial strategy, as well as reinforcing its Great Firewall.
Others, such as New Zealand and Australia, have pioneered digital agreements to make it easier for their businesses to connect with new customers.
Britain is a services superpower. We are second only to the USA in our volume of exports. The sector contributes over 80 per cent of our economic output and employs 30 million people. Our data centres are world leaders, we have a global financial centre and thriving data-rich sectors like AI and fintech.
In 2018, the digital sector contributed £150 billion to the British economy, and grew at a rate almost six times faster than across the whole economy. As Britain flies the flag for free trade, ensuring the international free flow of data will be crucial to our future prosperity.
Digital Trade Agreements form the foundation of future services growth. Digital exports do not recognise geographic distance, which makes large markets on the other side of the globe even more appealing.
From facilitating e-contracts across borders, to preventing requirements for data to be stored domestically and allowing British companies to access foreign Government data, these agreements will be increasingly important for our services-driven trade. Regrettably, the global data divide is stymieing progress in international regulatory developments, leaving a void that will only become more pronounced.
Data localisation strikes at the heart of efficient business. Without locking in free dataflows, businesses in increasingly broad sectors would face the need for expensive data centres to operate abroad. In the long term, this would hit our national economy. In fact, the US Chamber of Commerce estimates that Chinese data protectionism will reduce its GDP by between 1.8 and 3.4 per cent by 2025.
As a leading digital economy with new control over its trade policy and an ambitious outlook, Britain is uniquely placed to help shape global rules in this emerging arena. A firm focus on digital trade will place Britain at the forefront in the sphere most crucial to the future success of our economy, and lock-in the digital freedoms that our businesses currently enjoy. The UK-Japan Free Trade Agreement stands us in good stead; going further than the EU-Japan deal and the Digital Economy Partership Agreement, it contains arguably the most wide-ranging and ambitious digital provisions of any agreement in the world.
Liz Truss is rightly focused on the Indo Pacific – the world’s fastest growing region. With plans to join the CPTPP, and trade negotiations underway with pioneers New Zealand, Australia and Singapore, Britain is right to side with digital free-traders. Digital Agreements in this region represent a significant opportunity for the UK, and one which we could not have pursued without leaving the EU.
The coming century will be dominated by data-dependent technology. Ensuring that our trade deals contain ambitious digital chapters will put us ahead of the economic curve, building firm foundations for future growth. Britain reaped great economic benefits from leading the first industrial revolution; we must ensure we are well placed for the next.