Cross-border data flow is essential to contemporary international trade. However, transitioning from paper to digital in international trade has benefits and concerns. Concerns have led to an upsurge in data regulation as nations and regions impose restrictions on data flows and storage. This paper argues that, with increasing concerns about data sovereignty, the reconciliation of differing positions will be necessary to ensure that the benefits of digitization can be realized equally. At present, the objective of “data free flow with trust” is aspirational at best, with emerging trade barriers that unfairly threaten opportunities for small to medium enterprises and development within the Global South. This paper supports new knowledge and demonstrates that discriminatory regulation of data flow and disproportionately prioritizing national interests will be a trade barrier that impacts private entities and consumers in all nations. To avoid unintended externalities, cooperation is needed at a global level.
