Economic research and trade policy analysis
Introduction
Throughout recorded human history, interactions among diverse nations, societies and communities have been shaped by complex combinations of economic, political and social forces. A topical and highly relevant component of these interactions in today’s world relates to linkages between trade and peace.
Foreword
Today, our social and economic activities are underpinned by the movement of data across international borders. They help us connect with family and friends; they support research addressing global challenges; they enable the co-ordination of production along supply chains; and allow firms, notably smaller ones, and people to access global markets. In sum, cross-border data flows have become the lifeblood of modern day social and economic activities.
Executive summary
Renewable hydrogen and hydrogen-derived commodities – such as ammonia, methanol and e-kerosene – are expected to play important roles in the energy transition. While most energy consumption can be met using renewable electricity or biofuels by 2050 (IRENA, 2023a), the use of renewable hydrogen and its derived commodities will be required in hard-to-abate sectors, including in industry as feedstocks (e.g. chemical manufacturing, fertiliser production, refining, steel manufacture) and heavy-duty transport as e-fuels (e.g. in maritime transport and aviation). Their use may account for around 14% of final energy consumption in 2050 (IRENA, 2023a).
D.2. Impact on trade patterns from changes in data localisation policies
Figure A D.2 displays the projected change in real exports between regions with different data localisation regimes (upper panel) and in different geopolitical blocs (lower panel) for Scenarios A-C since Scenario D is almost identical to Scenario 4 and thus already discussed in Annex C. In Scenario A No data localisation the largest projected increase in exports is projected for trade between regions with regimes 1 and 2 and other regions, for example between 0 and 1 and between 1 and 2. The reason is that data management costs are projected to fall most for these regions. In regions with regime 0 there are no projected changes in costs. This is also the case for most regions with regime 3, because they tend to have both prohibitive data localisation and data flow policies.
Acknowledgements
This report was approved by Marion Jansen (Director, Trade and Agriculture Directorate, OECD) and Ralph Ossa (Director, Economic Research and Statistics Division, WTO). The authors of the report are Andrea Andrenelli (OECD), Eddy Bekkers (WTO), Javier López González (OECD), Gabrielle Marceau (WTO) and Roger So (WTO). We are grateful for the useful comments received from Julia Nielson, Susan Stone, Clarisse Girot, and Frank Van Tongeren from the OECD, Johanna Hill, Bright Okogu, Ralph Ossa, Marc Bacchetta and Antonia Carzaniga from the WTO, as well as Anabel Gonzalez (IADB) and Robert Teh. We also acknowledge the useful discussions at the: G7 Scientific Roundtable on Digital Policy and Data Governance in the age of AI held in June 2024, and the comments received during the BIICL 2023 Annual WTO Conference on Trade and Technology: Challenges and Opportunities and the 27th GTAP Conference in Bordeaux in 2023.
C.1. Introducing the data flow shocks one by one
The channels of transmission across the different shocks can be gleaned by introducing the shocks one by one, cumulatively, starting from the change in trade costs, followed by the change in willingness to pay (Figure A C.1).
Conclusions
Hydrogen and hydrogen-derived commodities (ammonia, methanol and e-kerosene) are expected to play a crucial role in the energy transition and – in particular – the decarbonisation of many hard-to-abate end uses across industry and heavy-duty transport.
Introduction
Cross-border data flows underpin today’s economic and social interactions. They help people connect with family and friends located in different geographical locations; they support research addressing global challenges (as was the case during the COVID-19 pandemic); they enable the co-ordination of production along global supply chains; and they allow firms, notably smaller ones, and people to access global markets. In sum, cross-border data flows have become the lifeblood of modern day social and economic activities.
Foreword by the WTO Director-General
We live in troubled times. Beyond geopolitical tensions, uncertainty in the global economy, and stalling progress on collective challenges from poverty reduction and hunger to climate change, the world is witnessing the highest level of active conflicts since the end of the Second World War. According to the 2024 Global Peace Index compiled by the Institute of Economics and Peace, a think tank, fewer conflicts are being resolved, while they are becoming more internationalized.
Policy implications
There are manifold reasons economies are reviewing their data policy. These include considerations related to privacy and data protection, national security, regulatory control or audit, digital security, and also new forms of digital industrial policy (Casalini, López González and Nemoto, 2021). While there are legitimate reasons for the diversity in regulations across economies, the regulatory landscape that underpins cross-border data flows and data localisation is becoming increasingly complex.
Executive Summary
The comparison of tariffs across time poses significant challenges when data are expressed in different versions of the Harmonized System (HS).