Presentation on South Africa policy options to regulate data flows. Pretoria, 2 November 2017

1. S O U T H A F R I C A A N D D A TA
F L O W S : T H R I V I N G I N T H E
D I G I TA L E R A
M A R T I N A F. F E R R A C A N E
R E S E A R C H A S S O C I A T E A T E C I P E
R O U N D TA B L E : “ S O U T H A F R I C A A N D D A TA F L O W S : M A X I M I S I N G T H E
P O T E N T I A L O F T H E D I G I TA L E C O N O M Y ”
2 N O V E M B E R 2 0 1 7

2. I N D E X
1. REGULATORY REGIMES OF DATA FLOWS
2. SUMMARY STATS OF RESTRICTIONS
3. DATA FLOW REGIMES IN BRICS
4. THE COST OF RESTRICTIONS TO DATA FLOWS
5. DATA FLOWS IN TRADE AGREEMENTS (FTAS, WTO)
6. POLICY OPTIONS FOR SOUTH AFRICA

3. 1 . R E G U L A T O RY R E G I M E S O F D A TA F L O W S
Source: Ferracane (2017)

4. 2 . S U M M A RY S TA T S O F R E S T R I C T I O N S
Source: Ferracane (2017)

5. 2 . S U M M A RY S TA T S O F R E S T R I C T I O N S
Source: Ferracane (2017)

6. 2 . S U M M A RY S TA T S O F R E S T R I C T I O N S
Source: Ferracane (2017)

7. 2 . S U M M A RY S TA T S O F R E S T R I C T I O N S
Source: Ferracane (2017)

8. 2 . S U M M A RY S TA T S O F R E S T R I C T I O N S
Source: Ferracane (2017)

9. South Africa: Conditional flow regime
Brazil: No restrictions; Proposal for conditional flow regime
India: Conditional flow regime; Ban to transfer for public records
3 . D A TA F L O W R E G I M E S I N B R I C S

10. China: Several bans on transfer, local processing and
local storage requirements; conditional flow regime
Russian Federation: Local processing requirement; local
storage requirement; conditional flow regime
3 . D A TA F L O W R E G I M E S I N B R I C S

11. Today “trade cannot happen without data being
transferred from one location to another”
Swedish National Board of Trade
4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S

12. An average of 45 workers per facility employment long-
term + short-term construction jobs
4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S : J O B S

13. Interviews: Markup associated with local processing is
about 20% to 25%
Empirical studies: Local companies would be required to
pay 30-60% more for their computing needs
4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S : D A TA P R O C E S S I N G

14. 4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S : A C C E S S T O I N N O VA T I O N
Access to Innovation

15. 4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S : G D P
Source: ECIPE (2014)

16. 4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S : G D P

17. 4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S : I N V E S T M E N T
Source: Ferracane (2017)

18. 4 . T H E C O S T O F R E S T R I C T I O N S T O
D A TA F L O W S : R E TA L I A T I O N

19. 4 . T H E C O S T O F R E S T R I C T I O N S T O D A TA
F L O W S : N O N - E C O N O M I C I M P L I C A T I O N S
• Government surveillance and
censorship practices are facilitated
• Data is less secure

20. 5 . T H E D A TA F L O W S I N T R A D E
A G R E E M E N T S
• KORUS & EU-Korea FTA: hortatory commitment;
specific commitment in financial sector
• EU-Vietnam FTA & CETA: specific commitment in
financial sector

21. 5 . T H E D A TA F L O W S I N T R A D E
A G R E E M E N T S
• TPP12: commitment on data flows with GATS
exceptions; commitment on privacy regime;
prohibition forced localisation of server capacity
• TTIP & TISA: will they be TPP-like?

22. 5 . T H E D A TA F L O W S I N T R A D E
A G R E E M E N T S
WTO jurisprudence:
• US—Gambling: supply of services through mode 1
includes also electronic means of delivery
• China—Publications and Audiovisual Products:
commitments include products delivered in digital
forms

23. 6 . P O L I C Y O P T I O N S F O R S O U T H
A F R I C A : S TA T U S Q U O
• Pro: regime which is widely applied, especially in
developing economies; no costs of change; buy
time to get better understanding of privacy and
security implications of data flows
• Contra: possible losses in efficiency and productivity
of local firms

24. 6 . P O L I C Y O P T I O N S F O R S O U T H
A F R I C A : L I B E R A L I S A T I O N
• Pro: gains in efficiency and productivity of local
firms; data processing hub in the region
• Contra: costs of changing the regime; decision
before there is full understanding of privacy and
security implications on the internet

25. 6 . P O L I C Y O P T I O N S F O R S O U T H
A F R I C A : R E S T R I C T I O N S
• Pro: small short-term gains for local data processing
companies
• Contra: high costs for local companies; loss of
competitiveness; companies might flee the country;
possible retaliation; security implications; human
rights implications (surveillance)

26. M A R T I N A F R A N C E S C A F E R R A C A N E
E M A I L : M A R T I N A . F E R R A C A N E @ G M A I L . C O M
THANK YOU!