ITIF Report Urges G7 to Take Japanese Data Initiative from Concept to Action

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The Information Technology & Innovation Foundation (ITIF) released a report last week that calls on the G7 countries to bring Japan’s “Data Free Flow with Trust” (DFFT) initiative to life. According to Japan’s Digital Agency, the goal of DFFT is to promote the free flow of data through transparency while ensuring security and IP rights.

The ITIF wrote, “building an open, rules-based, rights-respecting, and innovative global digital economy will depend on a small group of ambitious countries working together—such as at the DFFT—in a flexible format to draw in relevant international organizations and other interested countries and stakeholders.”

The DFFT initiative was first proposed in 2019 by then Japanese Prime Minister Shinzo Abe at a G20 meeting.

While the initiative was proposed to a broader audience, the ITIF believes the smaller G7 is a more appropriate setting for the DFFT.

As seen in other IP talks and analyses, China looms large for the ITIF, “idealist calls for a new all-encompassing global digital organization will lead to no outcome or, even worse, a lowest common denominator set by China.”

Bureaucratic Background

The biggest concern in for the ITIF is transitioning the DFFT from the planning phases into concrete policy actions.

In May 2023, representatives from Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union discussed DFFT at the G7 summit in Hiroshima, Japan. At that meeting, digital and tech ministers from the G7 countries agreed to advance international policy discussions, with DFFT as a guide.

In their official statement, the ministers wrote, “we share the view that trust should be built and realized through various legal and voluntary frameworks, guidelines, standards, technologies and other means that are transparent and protect data.”

At that meeting, the G7 countries also agreed on four key areas to promote DFFT, data localization, regulatory cooperation, trusted government access to data, and data sharing. The G7 member countries also recently endorsed the creation of the Institutional Arrangement for Partnership (IAP) within the OECD, an institutional arm to bring stakeholders together to implement DFFT.

While the ITIF supports these moves, they want the G7 to go further and offered several ways to move the DFFT discussions into a more concrete direction.

How to Bring DFFT to Life

The primary critique that the ITIF has of the current IAP is that it should function primarily as a forum for G7 countries to work together. At the moment, the ITIF argues the partnership risks “turning into another unproductive talk shop.”

As the IAP gets off the ground and becomes a clearinghouse for DFFT discussions among G7 countries, the ITIF believes that it should become an advocate and educator, promoting the desired principles to other countries. The ITIF suggests that the partnership could work with ASEAN the African Union and other countries to promote DFFT principles.

The ITIF also wants this working group to be able to classify how different countries are living up to DTTF standards. This includes publishing reports that analyze the laws of countries around the world to better help countries identify how they can improve.

Here, the report compares the IAP to the work the OECD has done to classify different countries’ approaches to AI to ensure AI systems are robust, legal, and fair.

Other concrete steps the ITIF offers are building data-sharing tools, implementing criteria so countries can quickly asses who data can be shared with, and making the Global Cross Border Privacy Rules the standard for global data privacy.

“It would be a strategic mistake to let this opportunity go due to bilateral differences and conflicts, which in the grand scheme of things, pale in comparison with the contrast with China and other digital authoritarian countries,” wrote the ITIF.

Balancing Act

While the DFFT promotes collaboration between countries, it is also designed with a degree of antagonism to China. One of the goals of the DFFT is to identify trustworthy countries to share data with, which implies some countries will fall out of these bounds.

As the ITIF wrote, “policymakers admit (behind closed doors) that DFFT (now) is largely defined not by what it is for, but by what it is against: China.”

The FBI has estimated that the annual cost to the United States for IP theft is in the range of $225-$600 billion.

According to the ITIF, mapping countries on how they fulfill DFFT principles will help private firms and other governments recognize the potential danger of sharing data with “China and other problematic countries.”

Furthermore, the report claims that this mapping data would fill in gaps left by what some deem to be unreliable internal reporting from the Chinese government.

The ITIF also published a report yesterday concluding that the United States “could regain its position as a global leader on digital policy by prioritizing a pro-innovation agenda, cooperating with its allies to advance free trade and democratic values, and pushing back against harmful narratives and policies.”

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Author: anterovium
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