Recommendation 1
Recommended (the committee's words)In order to regulate and support digital trade and the digital economy effectively, the Government must be able adequately to categorise or classify, define, quantify and measure it.
Select committee: International Agreements Committee
Data and digital trade
Closed
Opened 1 May 2024
Closed 13 Feb 2025
15 recommendations
20 conclusions
International Agreements Committee Inquiry on parliament.uk ↗
Inquiry scope (the committee's words)
The growth of the digital economy fundamentally challenges our understandings of how international trade operates, and raises questions about how to adapt existing trade rules and market access commitments to a digital era. This short inquiry seeks to understand how developments in digital trade and the digitisation of trade should be reflected in agreements the UK Government negotiate and sign.
Where it stands
The inquiry is closed, opened 1 May 2024.
The committee has published 1 report, most recently 5th Report - Data and digital trade on 11 December 2024.
The government's response
Published 11 February 2025. The deadline was 14 February 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government's response to the Committee's Data and Digital Trade report says it has "carefully considered" the recommendations, and sets out continuing activity and reviews on digital trade and data flows, with a few specific positions.
- On data adequacy with the EU, the government "recognises the importance of retaining our data adequacy decisions" and says it is supporting the EU's technical review, "as required", ahead of the renewal deadline this year.
- On source code provisions in trade agreements, it welcomes the recommendation for a comprehensive review and says it "will take on board the issues discussed in the report as we assess the suitability of our approach".
- On including the AI Safety Institute in the Digital Regulation Cooperation Forum, it "would prefer to note" the recommendation until the Institute has been placed on a statutory footing.
- On the Single Trade Window, the government says it has "paused delivery" as part of 2025 Spending Review funding allocation, citing a "challenging wider fiscal context", and will give "a further update" in the next phase of the Spending Review.
Recommendations and conclusions
- Recommendation 1Recommendation
- Recommendation 2Recommendation
- Conclusion 3Conclusion
Reports
- 5th Report - Data and digital trade11 December 2024 · 35 items
Evidence
- 3 oral evidence sessionsLatest 16 October 2024
- 12 witnesses
Recent activity
- The Government Response to the Digital and digital trade report11 February 2025, Report published
- 5th Report - Data and digital trade11 December 2024, Report published
- Oral evidence session16 October 2024, Oral evidence
Recommendations and conclusions 35 shown
Recommendation 2
Recommended (the committee's words)In light of a rapid global transformation in how trade is delivered and ordered, the Government should support and contribute to global efforts to develop commonly agreed typologies and categories for digital trade.
Conclusion 3
Concluded (the committee's words)Although digital trade is a rapidly growing and developing area of clear importance to UK trade, the frameworks for digital trade governance are still evolving domestically and globally. This has led to a somewhat fragmented overall picture in policy and regulatory terms. Seeking to use regulatory cooperation and to make progress towards commonly agreed definitions and standards with like-minded partners would help to ameliorate this situation.
Recommendation 4
Recommended (the committee's words)In light of this shifting picture, we recommend the Government conduct an analysis of the existing landscape of digital trade provisions in the UK’s international agreements. An analysis of the benefits and risks associated with the use of these provisions thus far could form a useful evidence-base for developing a coherent approach to digital trade cooperation and governance within the UK’s trade strategy. We would welcome regular briefings and written updates by the Government on the evolution and implementation of the strategy.
Conclusion 5
Concluded (the committee's words)We welcome the announcement of the forthcoming trade strategy, including the promised focus on multilateral cooperation in digital trade.
Recommendation 6
Recommended (the committee's words)We recommend that the Government should clearly identify and set out the barriers and opportunities in digital trade and provide details in the trade strategy on which trade policy tools are best placed to address them. These might include domestic regulation, regulatory cooperation, Free Trade Agreements, multilateral agreements, or other types of agreements.
Conclusion 7
Concluded (the committee's words)We encourage the Government to work closely with a broad range of stakeholders, both business and non -business, to cooperate on the development of the trade strategy . This should help develop and clarify a settled consensus-based approach to some of the key issues we raise further below in this report, including on data governance and the public policy space in international trade agreements.
Conclusion 8
Concluded (the committee's words)While the UK’s approach to date appears not to have caused problems, we emphasise that this has been largely dependent on a favourable external environment, rather than on account of Government policy. In particular, adequacy decisions taken by the EU in respect of the UK and other jurisdictions are unilateral, and thus largely outside the control of the UK. Similarly, the relationship between the EU and US on these matters is crucial in offering stability for the UK in its data policy.
Conclusion 9
Concluded (the committee's words)In an unclear global environment, the UK’s approach to data regulation should be kept under close review, taking account of the policy and regulatory landscape of the UK’s largest trading partners.
Recommendation 10
Recommended (the committee's words)In the absence of international consensus on this issue, we recommend that the Government continues to take a pragmatic, outcomes -focused approach to data regulation with a view to supporting the UK’s trade to the greatest extent possible. Currently , we see this as best achieved via endeavouring to maintain data adequacy with the European Union, the UK’s largest trading partner. It should also, as far as possible, include maintaining arrangements like the data bridge with the US and other large partners. We recommend that the Government set out a coherent approach to data privacy and data governance in the forthcoming trade strategy.
Conclusion 11
Concluded (the committee's words)We welcome the Government’s confirmation that it is working with the European Commission to ensure that its Data (Use and Access) Bill is compatible with a positive EU adequacy decision in June 2025.
Conclusion 12
Concluded (the committee's words)The EU is the UK’s largest trading partner. Given that digital trade is of particular importance to the UK and considering that free flows of data underpin digital trade, it is imperative that the Government secures a positive adequacy decision in June 2025, and accordingly that it works closely with the European Commission to that end. Furthermore, it is important that the Government ensures that it minimises the risks of a challenge to a future UK adequacy decision before the Court of Justice of the EU.
Recommendation 13
Recommended (the committee's words)We note the risk of relying on a wide network of arrangements governing data flows for a stable and certain business environment. If one or more of these arrangements break down, UK businesses may find themselves in an uncertain trading environment. This is a risk that the Government should be assessing, and which strengthens the case for wider plurilateral agreements on data regulation.
Conclusion 14
Concluded (the committee's words)We welcome the Government’s confirmation to the European Affairs Committee that it stands ready to engage with the European Commission, European Parliament and other relevant stakeholders to support a successful renewal of the EU’s data adequacy decisions as a matter of priority.
Recommendation 15
Recommended (the committee's words)We recommend that the Government maintain close dialogue with the European Union to ensure the UK maintains data adequacy with the EU. The Government should ensure that its approach to personal data remains consistent with the case law of the CJEU.
Conclusion 16
Concluded (the committee's words)We recognise the value in the view that the UK could act as an effective interlocutor between the EU and other parts of the world on data governance and privacy issues. However, we would like to stress the considerable resourcing challenges that would be involved in adequately maintaining this ‘bridge’ position. Such an approach would require considerable investment, resources and skills.
Recommendation 17
Recommended (the committee's words)We recommend carefully assessing the risks and costs to the UK in attempting to position itself as a ‘bridge’ in this sensitive regulatory landscape.
Conclusion 18
Concluded (the committee's words)We note that the future of US engagement on any of these issues at a multilateral level is uncertain due to an imminent change of administration.
Conclusion 19
Concluded (the committee's words)We welcome the optimism expressed by the Minister about implementation of the JSI, but we note that some WTO members have a history of objecting to the principle of the inclusion of plurilateral agreements into the WTO framework.
Conclusion 20
Concluded (the committee's words)We welcome the UK’s working to achieve a plurilateral agreement within the WTO framework to improve the rulebook on digital trade.
Conclusion 21
Concluded (the committee's words)We encourage the Government to continue working with like-minded partners towards establishing a consensus on issues such as cross-border data flows and other digital trade governance issues. We note that it may need to continue to do so in the absence of US engagement.
Conclusion 22
Concluded (the committee's words)The governance of artificial intelligence and its impact on our society and economy is still in its infancy. Regulation of artificial intelligence cannot be undertaken in isolation, and should be considered in cooperation with our global partners.
Recommendation 23
Recommended (the committee's words)In the light of the mixed evidence that we received, we recommend that the Government undertake a comprehensive review of the use of source code provisions in trade agreements, particularly focusing on the exceptions to the ban on disclosures.
Recommendation 24
Recommended (the committee's words)The Government should make every effort to maintain a regular dialogue with counterparts on regulation and legislation on a variety of issues affecting digital trade. These might include regulation of emerging technologies, approaches to data, or digitisation of trade documents. Such cooperation should help ameliorate barriers to trade by working towards providing interoperable regulatory regimes with our closest trading partners.
Conclusion 25
Concluded (the committee's words)We welcome the positive impact the Electronic Trade Documents Act has had for trading businesses, and encourage the Government to cooperate with partners, including through the G7 and G20, to support wider implementation of similar legal frameworks.
Conclusion 26
Concluded (the committee's words)We encourage the Government to build upon the progress made in the Electronic Trade Documents Act, and to explore other avenues, consulting with relevant stakeholders and international leaders in this area such as Singapore, to support the digitisation of trading processes.
Conclusion 27
Concluded (the committee's words)The delay to the Government’s Single Trade Window, originally planned to be rolled out towards the end of 2024, highlights the budgetary and resource implications of trade digitisation schemes. Exploring technological solutions to facilitate and ease border processes is highly desirable, but complicated, resource intensive and expensive. However, we also note that other countries have been successful in implementing single trade windows, so this is an area in which the UK could learn from the experience of other countries.
Recommendation 28
Recommended (the committee's words)The Government should continue to work closely with businesses to develop and roll out schemes that better support and facilitate customs processes and ease administrative barriers to trade. We call on the Government to provide detailed and timely guidance to businesses on the timing of the Single Trade Window, in order to support and minimise costs for businesses.
Conclusion 29
Concluded (the committee's words)We are conscious of the challenge of fostering cooperation between government departments, a problem not unique to the UK. We note that research has explored strategies and options to reward cooperation between government agencies and departments. In particular, the OECD has produced a report exploring a number of avenues to incentivise cross-government working, including allocating funding for projects in such a way as to encourage collaboration between departments. We suggest that some of these options should be carefully considered by the Government, particularly in the context of forthcoming spending reviews.
Conclusion 30
Concluded (the committee's words)We welcome the Government’s commitments to ensuring coherence between departments, and call on the Government to set out the steps that it is taking to encourage cooperation between DSIT and DBT to ensure that domestic digital policy and commitments in Free Trade Agreements are coherent and complementary.
Recommendation 31
Recommended (the committee's words)We call on the Government clearly to set out in its response to this report the reasoning for this division, and to outline how it ensures coherence between policies supporting EU trade in the Cabinet Office, with policies supporting other trade in the Department for Business and Trade.
Recommendation 32
Recommended (the committee's words)To improve coherence between regulators and departments, we recommend that government departments such as the Department for Science, Innovation and Technology, regulators such as those participating in the Digital Regulation Cooperation Forum, and bodies such as the British Standards Institute and the AI Safety Institute should be included in the multi-stakeholder consultative forum.
Recommendation 33
Recommended (the committee's words)To encourage cross-Government working, we further recommend the Government explore options for structuring departmental spending in future spending reviews so as to encourage cooperation between departments and coherent policy-making outcomes.
Conclusion 34
Concluded (the committee's words)We welcome this indication from the Government that stakeholder engagement will form a central role in the forthcoming trade strategy.
Recommendation 35
Recommended (the committee's words)To improve consultation processes, in particular among academics, NGOs, and consumer groups, we recommend that the Government establish a multi -stakeholder consultative group on digital trade which meets regularly to provide input to the Department for Business and Trade.
Reports
5th Report - Data and digital trade
- HC No.
- Not recorded
- Published
- 11 Dec 2024
- Items
- 35
- Government response
- Government response published 11 February 2025 (deadline 14 February 2025). Read the government's response ↗
Oral evidence sessions
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| Date | Session and witnesses | Source |
|---|---|---|
| 16 Oct 2024 |
Oral evidence session
Graham Floater · Department for Business and Trade,
Rt Hon Douglas Alexander MP · Department for Business and Trade,
The Baroness Jones of Whitchurch · Department for Science, Innovation and Technology,
Vicki Brown · Department for Science, Innovation and Technology
|
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| 4 Jun 2024 |
Oral evidence session
David Rutley MP · Foreign, Commonwealth & Development Office,
Graham Floater · Department for Business and Trade,
Paul Gaskell · Department for Science, Innovation and Technology,
Paul McKell · Foreign, Commonwealth & Development Office,
Rt Hon Greg Hands MP · Department for Business, Energy & Industrial Strategy
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| 14 May 2024 |
Oral evidence session
Chris Southworth · International Chamber of Commerce,
Professor Emily Jones · Blavatnik School of Government, University of Oxford,
Sabina Ciofu · techUK,
Seamus Nevin · MakeUK
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Who gave evidence
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| Witness | Organisation | Sessions |
|---|---|---|
| Graham Floater · Director, US, Services, Investment and Digital | Department for Business and Trade | 2 |
| Chris Southworth · Secretary General | International Chamber of Commerce | 1 |
| David Rutley MP · Parliamentary Under-Secretary of State (Americas and Caribbean) | Foreign, Commonwealth & Development Office | 1 |
| Paul Gaskell · Deputy Director for International - Digital Trade, Internet Governance, Digital Standards & Russia/Ukraine Coordination | Department for Science, Innovation and Technology | 1 |
| Paul McKell · Legal Director | Foreign, Commonwealth & Development Office | 1 |
| Professor Emily Jones · Associate Professor of Public Policy | Blavatnik School of Government, University of Oxford | 1 |
| Rt Hon Douglas Alexander MP · Minister for Trade Policy and Economic Security | Department for Business and Trade | 1 |
| Rt Hon Greg Hands MP · Minister of State | Department for Business, Energy & Industrial Strategy | 1 |
| Sabina Ciofu · International Policy and Strategy Lead | techUK | 1 |
| Seamus Nevin · Chief Economist | MakeUK | 1 |
| The Baroness Jones of Whitchurch · Parliamentary Under-Secretary of State for the Future Digital Economy and Online Safety | Department for Science, Innovation and Technology | 1 |
| Vicki Brown · Head of Data Flows Policy | Department for Science, Innovation and Technology | 1 |