Context:

• Regional Comprehensive Economic Partnership trade negotiations, being held with Association of Southeast Asian Nations, China, South Korea, Japan, Australia and New Zealand, India may accept free data flow clauses with some public policy exceptions.

• It needs to be understood that suitable data controls and policies are not to be exceptions but the mainstream of a digital economy and society.

Arguments:

• India will largely end up ceding most of its data policy space, and data sovereignty. 

• it will give up any chances for effectively using Indian data for India’s development, and for digital industrialisation to become a top digital power.

• It will effectively be laying the path for permanent digital dependency, with India’s data flowing freely to data intelligence centres in the U.S., and  China. 

• A  few global “intelligence corporations” will digitally, and intelligent-ally, control and run the entire world.

About RCEP:

• Regional Comprehensive Cooperation agreement – is a proposed free trade agreement between 10 members of ASEAN and its five FTA partners (China, India, Australia, Japan, New Zealand)
• RCEP negotiation was formally launched in 2012, whose member states together account for 3.4 billion people and approximately 40% of world’s GDP.

Do you know?

Members of Indian Industry are resisting RCEP due to following concerns 

• Flooding of the market with Chinese goods impacting domestic manufacturers
• Lack of access to Indian services in the RCEP countries (Services is India’s strong area and has huge potential to tap into RCEP market)

Issues:

• India’s trade deficits with nations have always widened after signing free-trade-agreements (FTAs) with them, citing the cases with ASEAN, Japan, Korea, and Singapore, most of which are RCEP nations.
• It has also been pointed out that India’s vulnerable agriculture and dairy sectors, which are not in positions to compete with Australia and New Zealand, will be exposed to vagaries of global trade.
• Indian manufacturing is not competitive enough to face the vagaries of a free trade regime.
  Even after 27 years of liberalisation, inefficiency prevails due to a host of unimplemented reforms in the product and the factor markets.
  On the factor side, labour market reforms are incomplete. Labour productivity in manufacturing is still one of the lowest in the world with spatially fragmented labour laws are escalating the costs of doing business.
  Given this, Indian industry is hardly in a position to compete in the level-playing ground in a free-trade region.

Differences:

• India apprehends that, given its $60-billion trade deficit with China, the RCEP demand to reduce tariffs on 90 per cent of the traded goods to zero will have a disastrous effect on its already struggling MSME sector.
  India is especially apprehensive about Chinese goods swamping its market, forcing domestic producers to cut production or shut down.
• India has expressed its reservations over inclusion of e-commerce in the RCEP talks.
  The RCEP draft is opposed to data localisation, while India fears the monopoly power of digital giants which includes the likes of Tencent and Alibaba.

ASEAN+3:

• India could be out of the mega trade deal (RCEP).
• China has started pushing for a free trade pact between ASEAN + 3 (which includes the ten-member ASEAN, China, Japan and South Korea).
• This would effectively mean that among the 16 countries negotiating the Regional Comprehensive Economic Partnership (RCEP), all except India, Australia and New Zealand would get included in the proposed pact.
• China may be trying to push for an ASEAN + 3 arrangement to speedily create a new order in the region with itself at the helm to counter the challenge posed by the US with which it is engaged in a trade war.

Data concern:

• The global digital or artificial intelligence (AI) economy is currently a two-horse race between the U.S. and China.
•  It is feared that all other countries, including the European Union (EU) and major developing countries such as India, will have to become fully digitally dependent on one of these two digital superpowers. 
• This will considerably compromise their economic and political independence, something referred to as digital colonisation.

Solution:

• Efforts to escape such a dismal situation, like in the French and the U.K.’s AI strategies, numerous EU documents, and India’s NITI Aayog’s AI strategy, focus on one central issue — more data-sharing within the country, and better access to data for domestic businesses.

With few global digital corporations such as Google, Facebook, Amazon and Uber, continually vacuum out India’s and Indians’ data, and then by default treat it as their private property it is difficult

Way forward

• Despite all the concerns, the government must take into account that either slowing down India’s RCEP engagement or walking out of the talks at this stage would cut India out of the rules-making process for the RCEP and give China further space in the regional trade and security architecture.
• At a time when the U.S. has broken from the global consensus on multilateral trade agreements, an Indian walkout would endanger the united message that RCEP countries, which represent 40% of the global GDP, would wish to send out.
• It would also be a sharp departure from India’s “Act East” slogan and its extended outreach to ASEAN.
• Appropriate data policies must ensure that the required data is actually available to Indian digital businesses.
• Asserting a community’s legal right over data that is derived from, and is about, the community concerned, or about ‘things’ that belong to it. This is the concept of community data inscribed in India’s draft e-commerce policy.
• Data classification, data ownership rights, data sharing, data trusts must be dealt with

Conclusion:

• Disengaging from signing binding agreements on uninhibited data flows across borders does not mean that a country would simply localise all data. Some kinds of data may indeed need to be localised, while others should freely flow globally. 
• It just means that a country retains complete data policy space, and the means to shape its digital industrialisation, and thus its digital future.