Analysis | Will China’s new data security laws complicate Beijing’s move to join Pacific Rim trade pact?
- Some members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership are expected to demand that China modify its laws
- The multilateral trade deal covers a combined market of about half a billion people and roughly 13.5 per cent of the global economy
“Japan will almost certainly challenge China based on CPTPP’s cross-border data transfer provisions,” Xu wrote. “China can accept the CPTPP’s rules on cross-border data flows, but needs to consider compliance matters when formulating detailed security assessment rules on overseas data transfers.”
Why China is tightening control over cybersecurity
Whether China will be accepted into the CPTPP remains unknown, as Beijing faces a tall order to convince all 11 member-countries of this Pacific Rim trade pact.
In her article on WeChat, MIIT’s Xu wrote that China’s requirement for a security assessment before allowing data to be moved overseas is a mechanism that is unique to the country, which is expected to be tested for exceptions under the CPTPP. Still, Xu said she was “optimistic” about that mechanism passing the test.
The CPTPP treaty recognises that each country has its own regulation concerning cross-border data transfer, but it also stipulates that all countries should allow cross-border transfer of information for conducting business.
Members can each adopt restrictive measures to achieve a “legitimate public policy objective”, except if the restrictions “constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction” or are “greater than are required to achieve the objective”, according to the trade pact.
The CPTPP’s member-countries are expected to take time negotiating the specifics around such issues in accession talks and to test the application of the agreement in practice, according to Clarisse Girot, director for Asia-Pacific at non-profit organisation Future of Privacy Forum, who said the above exceptions are likely to raise complex interpretations.
RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal
“We can imagine that China wouldn’t make a formal announcement [to join the CPTPP] if its leaders didn’t have some sense on how to navigate these complex discussions,” Girot said.
“One of the main stated aims of the PIPL is to facilitate the continued flow of data around the world,” Bigg said. “As such, I don’t see there being a conflict between the PIPL and China looking to take this step [to CPTPP membership] at all.”
She indicated that China’s new data security laws have made it more straightforward for businesses on how to share data across borders, provided that they take certain steps to ensure compliance. As an example, she cited a specific provision in the PIPL that provides certain circumstances when Chinese authorities can share personal data overseas.
“So I actually think all of these [data laws] align very nicely,” Bigg said.