Data flows in supply chains: Practical realities and policy implications

Why are cross-border data flows essential to modern supply chains?  

Cross-border data flows are essential for efficient, resilient, and interconnected global supply chains. They enable real-time coordination, including traceability, custom clearance and the deployment of digital tools such as IoT and AI-driven analytics.  

Restrictive data policies, however, can create significant barriers that disrupt these interconnected systems. Such restrictions slow down trade, increase operational costs, and disproportionately impact MSMEs – the backbone of global economies – who may be excluded from global markets due to complex, costly compliance requirements. 

What’s stopping data from moving freely? 

Despite their critical role, cross-border data flows face growing regulatory hurdles. The lack of multilateral coordination and a fragmented regulatory landscape create barriers to trade and disrupt supply chains. Key issues range from data localisation mandates – which require companies to store and process data within national borders – to conflicting privacy and cybersecurity rules which increase compliance burdens. These fragmented regulatory approaches create uncertainty and act as non-tariff barriers to trade. They create inefficiencies, limit business opportunities and undermine the ability of companies to optimize supply chain operations, international scalability and competitiveness.  

ICC recommendations: what can policymakers do to fix it? 

1. Pursue new rules at the WTO to enable trusted, secure, and predictable cross-border data flows. 

2. Promote risk-based approaches that differentiate between personal and non-personal data. 

3. Ensure interoperable data standards and avoid blanket localisation requirements that require all data, regardless of type, to be stored locally. 

4. Protect Confidential Business Information (CBI) in trade and data policies. 

5. Invest in MSME-friendly digital trade ecosystems, including trusted trader programmes.