TOKYO -- A coalition of 14 global corporations including Toyota Motor and IBM has called for free and secure data flows across borders, in line with efforts by the Group of 20 to set up international standards on data transfers.
Other players behind the companies' joint statement include Nippon Telegraph and Telephone, NEC, Thomson Reuters, Cisco Systems, Mastercard and Airbus. Another 10 or so are expected to back their recommendations, which have already been submitted to the Japanese and U.S. governments.
The companies are pushing for the protection of critical corporate data -- like software source codes, algorithms and encryption keys -- which could cause significant damage to their competitiveness if leaked to their competitors. They have urged governments not to force companies doing business under their jurisdictions to disclose such information.
Data protection is key for global companies, given the amount of critical information they transfer across borders every day. For example, a Japanese automaker could transfer propriety technology and designs developed in Japan to production hubs in the U.S. and China. Some businesses are also streamlining operational data for all of their factories into one centralized system.
The businesses also oppose governments requiring them to store and process data on servers located specifically under their jurisdictions, as limits on transferring corporate data could hinder their corporate strategies.
Part of their recommendations have already become official rules under the 11-member version of the Trans-Pacific Partnership trade pact, as well as the economic partnership agreement between Japan and the European Union. The companies are urging the World Trade Organization, which counts over 160 members, to adopt similar rules.
The push is likely fueled in part by concerns about China. Beijing is increasing control over data, pressuring foreign companies to give up source codes and set up servers in China as a requirement for doing business there.
Any rules on data transfers must be transparent and predictable, the coalition argues, calling on governments to disclose details on regulations and processes tied to data.
The companies involved will engage in a dialogue with major governments toward crafting international standards. They will also consider voluntary measures enacted by the businesses themselves.
Japanese Prime Minister Shinzo Abe has launched an initiative for "data free flow with trust," which he plans to promote for when he hosts the G-20 summit this month in Osaka. The corporate coalition's recommendations complement his efforts.