BSA: Digital transformation requires new framework for digital trade

Software is a critical catalyst for the global economy, and a key enabler for organizations in every industry sector to succeed. The software industry has transformed in recent years, with the introduction of cloud computing, smart devices, and data analytics.

Business innovation moves very quickly, with changes continuing at a rapid rate as technologies such as artificial intelligence, autonomous devices, blockchain, and “smart” contracts are each reshaping how software is used.

Today’s digital economy calls for a well-constructed and modern trade agreement that includes truly 21st century obligations that drive job creation, competitiveness and innovation, says BSA – The Software Alliance.

In a paper entitled Modernizing Digital Trade: An Agenda for Software, the software industry alliance body said: “Data has transformed commerce for businesses of all sizes, from small entrepreneurial companies to large manufacturers. The software we rely upon depends on the rapid and seamless movement of data across borders.”

“Software services enable the technology of today as well as of the future. As the world continues to evolve, trade agreements need to allow for new innovations to flourish.”

BSA argues that no digital trade framework would be complete without protections for the development of emerging technologies, which allow companies to expand and create new jobs. These provisions are therefore, in its opinion, critical for the future of the global economy.

As the largest global alliance of software companies, BSA strongly supports a modern agreement that:

  • Builds on existing international law on e-commerce and the emerging international consensus on digital trade
  • Addresses the current and anticipated challenges faced by the software industry
  • Establishes rules in evolving areas, especially on data-driven economic activity

“The driving principle should be: no market access barriers and no discrimination against innovative software services,” it said.

BSA advocates that key elements of a trade agreement for the digital economy should include:

DATA ECONOMY

Privacy and security are imperatives. But governments often invoke privacy or security as a rationalization for creating market access barriers.

  • Free movement of data across borders: Given the importance of cross-border data to the modern economy, governments must use privacy or security policies only as necessary, and never as disguised market access barriers.
  • No data localization: Governments should not use data localization requirements as a market access barrier. For example, governments should not require that a data center be built inside its borders as a condition for doing business in a country.
  • Electronic signatures: National laws should recognize electronic signatures in commercial transactions, including “smart” contracts.

TECHNOLOGY IN GOVERNMENT

  • Technology in government: Governments should promote the use of innovative technology in government operations as they provide services to their citizens.
  • Procurement: Procurement rules should be changed to reflect the 21st century needs of governments.
  • Choice: Companies and government agencies should be free to use the technology of their choice and not be required to use local technology

REGULATION

  • Strong support for encryption: Governments should not undermine encryption in commercial products by imposing restrictions on security technologies used to safeguard against intrusions.
  • International standards: Governments should not force companies to use conflicting national standards.
  • State-owned enterprises: Governments should not favor state-owned enterprises through discriminatory regulation or subsidies.
  • No forced technology transfer: Governments should not force companies to transfer their technology, or to disclose trade secrets or source code in order to have market access.
  • No customs duties on electronic transmissions: Governments should not impose customs duties on the telecommunications value of electronic transmissions or on data being transmitted.

INTELLECTUAL PROPERTY

  • Copyright rules: Governments should have copyright rules in line with international standards with appropriate exceptions and safeguards, clear rules permitting commercial data gathering, and rules ensuring that ISPs are protected from liability for unlawful content posted by third parties.
  • Legal software: Governments should use legal software in government agencies.
  • Cyber-theft penalties: Governments should have criminal penalties for cyber theft of trade secrets.
  • Patent protections: Governments should have non-discriminatory protection for software patents.
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