EU and Japan Finalise Terms on Data Flow

The European Union and Japan reached an agreement on cross-border data flows on October 28, which should drive business and may help shape global data rules, according to the European Commission. According to the European Commission, the agreement will benefit businesses in a variety of industries, including financial services, transportation, machinery, and e-commerce, by allowing them to handle data without cumbersome and costly administration.

"It will eliminate the need to localise data, increasing business efficiency while ensuring the highest level of data protection for our citizens," EU Trade Commissioner Valdis Dombrovskis said.

The agreement attempts to strike a balance between Japan's more liberal approach and the EU's greater emphasis on personal protection and privacy. It will also prohibit protectionist restrictions, such as rules requiring localization, while allowing authorities to intervene in areas such as cyber-security, privacy, and personal data.

In 2015, the two partners signed a free trade agreement but left open the issue of data flows. They have now filled that gap after a year of talks since October 2022. Similar data negotiations are planned with free trade partners Singapore and South Korea, and the EU hopes to include digital trade rules in future free trade agreements.