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Trade News

Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.


Data governance in a digital age: Who makes the rules for the information trade?

Wednesday, May 23, 2018 > 15:58:33

Financial Post

There’s nothing new in the trade of data. As long as humans have traded, they have traded data about the world they encountered.

But in recent years, thanks to the development of “the cloud” (computing power as a service), firms have developed new sectors that use various types of data to create new services. These sectors include health care apps; personal assistants such as Alexa or Siri; and businesses built on artificial intelligence, such as Stitch Fix or Waze. These new firms are constantly hungry for additional data to train their algorithms. The more data these firms gain access to, the more and better services they can provide to both businesses and consumers. Many of these firms utilize our personal data — which we agreed to provide freely to companies such as Google, Facebook, or apps such as Tinder — in return for the free search or social networking services they provide to us. These firms in turn also sell our data to other firms, creating a new data-driven economy.

The thing is, the rules governing trade in data have to be different than the rules governing trade in steel or deodorant. This is because data can be many things simultaneously. Data can be a good, it can be a service, it can be both at the very same time. It’s incredibly easy to trade.

In recognition that data will be an important asset, countries such as China and trade blocs such as the EU are trying to obtain comparative advantage in these sectors through a mix of domestic regulations and trade strategies.

We need to find a way to make the rules governing data interoperable – working across different nations. That’s one of the reasons the Canadians, the Americans and the Mexicans are trying to find common ground on digital trade in NAFTA. All three nations have very different rules around privacy, which the Europeans call data protection. Also, they have different norms and values about what data should be public, what data can be censored, what is national security data. We are going to need to find common ground if we are going to continue to trade data across borders.

Given the unique nature of data, people deserve very clear rules. However, the data behemoths that stalk the earth sucking up and processing our data have outsize influence over the drafting of these rules.

But the internet is evolving and we can collectively demand a different future, built on the free flow of some of our data. We can demand that governments and companies do a better job protecting our personal data. At the international level, we can support a new approach to trade that sets rules governing cross border data by data type (e.g. personal data, public data, proprietary data, etc.). We should also demand that governments do more to help us gain greater control over the use of data. The EU has taken an important step in that direction. On May 25, anyone who wants to trade data with Europeans must comply with new data protection regulations. These regulations empower European citizens with new rights to control their data and demand an explanation of how their data was used in algorithms. Many firms are innovating in response to such regulations. As an example, a Canadian company, Bitrush, uses blockchain to broker advertisements while giving individuals more control over their personal data. That could be the way of the future.

Canada has long advocated for the open internet as well as digital rights. Canada has also stressed that countries need clear rules governing cross-border data flows because such flows underpin the internet, which is a shared global platform. Moreover, Canada has considerable expertise in machine learning, which is a type of artificial intelligence, but it does not have sufficient population to train effective algorithms over time. Canadians will need trade agreements that establish the rule of law, protect personal data and encourage cross-border data flows among its trading partners such as the U.S., EU and Latin America.

But trade is not the only venue where citizens can take greater control over their data. Canadians can collaborate with netizens from other countries to demand a new paradigm on how our data is processed, utilized and sold by these companies. We can band together to demand that these companies pay us for our data. We can also establish personal data banks and hire data brokers to sell certain types of our data to companies and for uses we feel comfortable with. Finally, we can use shareholder activism to call on all companies to be more transparent about how they use our data. If we take greater control over our personal data, we are more likely to have a better data-driven future.

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