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G7 Digital Trade Principles

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    World Affairs
  • Published
    25th Oct, 2021


Recently, the Group of Seven (G7) wealthy nations agreed on a joint set of principles to govern cross-border data use and digital trade. 


  • Digital Marketing: It is broadly defined as trade in goods and services that is either enabled or delivered digitally,encompassing activities from the distribution of films and TV to professional services.
  • G7 Digital Trade Rules:
    • Open Digital Markets: Digital and telecommunications markets must be competitive, transparent, fair, and accessible for commercial and international use.
    • Cross Border Data Flow: In order to take advantage of digital economic opportunities and support trade in goods and services, data must be able to flow freely across borders with trust, including the trust of individuals and businesses.
    • Protection for Employees, Consumers, and Business: Employee protection should be available to employees who directly or indirectly support digital trading, which provides decent work conditions.
    • Digital Trading Systems: To cut the red tape and enable more businesses to trade, governments and industries must move forward with the digitalization of trade-related documents.
    • Fair and Inclusive World Governance: Similar digital trading laws must be agreed upon and promoted by the World Trade Organization (WTO).
      • These laws should benefit workers, consumers, and businesses in developing economies, as well as those in economically developed countries, while protecting each country's right to regulate the legitimate goals of public policy objectives.


  • Middle Ground: The deal sets out a middle ground between highly regulated data protection regimes used in European countries and the more open approach of the United States.
    • This agreement aims to remove unnecessary barriers to data flow across borders, while continuing to address privacy, data protection, intellectual property protection, and security.
  • Free Digital Trading: The agreement reached by the international elite group is considered important as it could free hundreds of billions of dollars in digital trading.
    • Enabling the flow of cross-border data and clarifying the framework for processing and storing data will be required to further increase the contribution of digital exports.

Related Concerns

  • The G7 countries have raised concerns about situations where data localisation requirements are being used for protectionist and discriminatory purposes.
  • The statement assumes significance as India has been contemplating measures for data localisation. 
    • Recently, India obtained 90.32% in the UNESCAP Global Survey on Digital and Sustainable Trade Facilitation.
    • In 2018, the economic value of the benefits of digital trading in the Indian economy is estimated at USD 35 billion.

Group of Seven (G7)

  • It is an intergovernmental organisation that was formed in 1975.
  • The bloc meets annually to discuss issues of common interest like global economic governance, international security and energy policy.
  • The G7 countries are the UK, Canada, France, Germany, Italy, Japan and the US.
    • All the G7 countries and India are a part of G20.

  • The G7 does not have a formal constitution or a fixed headquarters. 

    • The decisions taken by leaders during annual summits are non-binding.