5th Report - Data and digital trade

The government's response

What the committee recommended 35

1. 1
   In order to regulate and support digital trade and the digital economy effectively, the Government... Recommendation · paragraph 7
2. 2
   In light of a rapid global transformation in how trade is delivered and ordered, the... Recommendation · paragraph 7
3. 3
   Although digital trade is a rapidly growing and developing area of clear importance to UK... Conclusion · paragraph 9
4. 4
   In light of this shifting picture, we recommend the Government conduct an analysis of the... Recommendation · paragraph 10
5. 5
   We welcome the announcement of the forthcoming trade strategy, including the promised focus on multilateral... Conclusion · paragraph 15

See all 35 recommendations and conclusions

Sources

• 5th Report - Data and digital trade ↗The committee's report, parliament.uk
• The Government Response to the Digital and digital trade report ↗The government's response, 11 February 2025, parliament.uk

Recommendations and conclusions 35

1. 1
   In order to regulate and support digital trade and the digital economy effectively, the Government... Recommendation · paragraph 7 Recommendation (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.
2. 2
   In light of a rapid global transformation in how trade is delivered and ordered, the... Recommendation · paragraph 7 Recommendation (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.
3. 3
   Although digital trade is a rapidly growing and developing area of clear importance to UK... Conclusion · paragraph 9 Conclusion (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.
4. 4
   In light of this shifting picture, we recommend the Government conduct an analysis of the... Recommendation · paragraph 10 Recommendation (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.
5. 5
   We welcome the announcement of the forthcoming trade strategy, including the promised focus on multilateral... Conclusion · paragraph 15 Conclusion (the committee's words)

   We welcome the announcement of the forthcoming trade strategy, including the promised focus on multilateral cooperation in digital trade.
6. 6
   We recommend that the Government should clearly identify and set out the barriers and opportunities... Recommendation · paragraph 15 Recommendation (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.
7. 7
   We encourage the Government to work closely with a broad range of stakeholders, both business... Conclusion · paragraph 16 Conclusion (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.
8. 8
   While the UK’s approach to date appears not to have caused problems, we emphasise that... Conclusion · paragraph 21 Conclusion (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.
9. 9
   In an unclear global environment, the UK’s approach to data regulation should be kept under... Conclusion · paragraph 21 Conclusion (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.
10. 10
    In the absence of international consensus on this issue, we recommend that the Government continues... Recommendation · paragraph 23 Recommendation (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.
11. 11
    We welcome the Government’s confirmation that it is working with the European Commission to ensure... Conclusion · paragraph 32 Conclusion (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.
12. 12
    The EU is the UK’s largest trading partner. Conclusion · paragraph 39 Conclusion (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.
13. 13
    We note the risk of relying on a wide network of arrangements governing data flows... Recommendation · paragraph 40 Recommendation (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.
14. 14
    We welcome the Government’s confirmation to the European Affairs Committee that it stands ready to... Conclusion · paragraph 41 Conclusion (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.
15. 15
    We recommend that the Government maintain close dialogue with the European Union to ensure the... Recommendation · paragraph 41 Recommendation (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.
16. 16
    We recognise the value in the view that the UK could act as an effective... Conclusion · paragraph 44 Conclusion (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.
17. 17
    We recommend carefully assessing the risks and costs to the UK in attempting to position... Recommendation · paragraph 44 Recommendation (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.
18. 18
    We note that the future of US engagement on any of these issues at a... Conclusion · paragraph 55 Conclusion (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.
19. 19
    We welcome the optimism expressed by the Minister about implementation of the JSI, but we... Conclusion · paragraph 57 Conclusion (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.
20. 20
    We welcome the UK’s working to achieve a plurilateral agreement within the WTO framework to... Conclusion · paragraph 59 Conclusion (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.
21. 21
    We encourage the Government to continue working with like-minded partners towards establishing a consensus on... Conclusion · paragraph 59 Conclusion (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.
22. 22
    The governance of artificial intelligence and its impact on our society and economy is still... Conclusion · paragraph 66 Conclusion (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.
23. 23
    In the light of the mixed evidence that we received, we recommend that the Government... Recommendation · paragraph 66 Recommendation (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.
24. 24
    The Government should make every effort to maintain a regular dialogue with counterparts on regulation... Recommendation · paragraph 70 Recommendation (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.
25. 25
    We welcome the positive impact the Electronic Trade Documents Act has had for trading businesses,... Conclusion · paragraph 76 Conclusion (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.
26. 26
    We encourage the Government to build upon the progress made in the Electronic Trade Documents... Conclusion · paragraph 76 Conclusion (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.
27. 27
    The delay to the Government’s Single Trade Window, originally planned to be rolled out towards... Conclusion · paragraph 79 Conclusion (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.
28. 28
    The Government should continue to work closely with businesses to develop and roll out schemes... Recommendation · paragraph 80 Recommendation (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.
29. 29
    We are conscious of the challenge of fostering cooperation between government departments, a problem not... Conclusion · paragraph 82 Conclusion (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.
30. 30
    We welcome the Government’s commitments to ensuring coherence between departments, and call on the Government... Conclusion · paragraph 85 Conclusion (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.
31. 31
    We call on the Government clearly to set out in its response to this report... Recommendation · paragraph 86 Recommendation (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.
32. 32
    To improve coherence between regulators and departments, we recommend that government departments such as the... Recommendation · paragraph 87 Recommendation (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.
33. 33
    To encourage cross-Government working, we further recommend the Government explore options for structuring departmental spending... Recommendation · paragraph 88 Recommendation (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.
34. 34
    We welcome this indication from the Government that stakeholder engagement will form a central role... Conclusion · paragraph 90 Conclusion (the committee's words)

    We welcome this indication from the Government that stakeholder engagement will form a central role in the forthcoming trade strategy.
35. 35
    To improve consultation processes, in particular among academics, NGOs, and consumer groups, we recommend that... Recommendation · paragraph 93 Recommendation (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.