Flat White

No more canapés at Davos. Globalisation as we know it is over

11 August 2020

5:00 AM

11 August 2020

5:00 AM

Among other measures, Microsoft would ensure that all private data of TikTok’s American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred.Microsoft Corporate Blog, Aug 2, 2020 

Globalisation as we have known it has ended. Why? 

Unrestricted cross-border data flows — internet traffic –has been the primary enabler of globalisation in the twenty-first century. 

Before the election of President Trump in 2016, Harvard Business Review noted that “Cross-border data flows have grown by a factor of 45 over the past decade.” 

President Trump’s “Executive Order on Addressing the Threat Posed by TikTok” from August 6 spells out the national security case for treating personal data as a national security asset: 

This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.

Whether you agree or disagree with this concern specifically in relation to TikTok is irrelevant. 

The substance of the TikTok saga is that real or perceived unrestricted cross-border data flows are no longer acceptable to the United States on national security grounds. 

End unrestricted cross-border data flows and you end the key enabler of globalisation in the twenty-first century. 

We are now in that era. For Australia, this has profound implications. 

The Prime Minister’s relaxed attitude to TikTok will inevitably change or “evolve” by the end of 2020. Why? 

It is fundamentally at odds with our primary defence partner in an era of heightened geopolitical tensions. 

To quote another section of the Executive Order from President Trump: 

Specifically, the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. 

As I wrote in The Spectator Australia on 15 July, the only unity tickets in United States politics at the moment are distrust of China and Big Tech. Whether we are dealing with President Trump or President Biden, the substance of this position will not change in 2021. 

Despite the defence establishment origins of the internet, the United States has largely operated an open-door policy in relation to cross-border data flows.  

This approach has been largely adopted by other western governments but has not by authoritarian ones.  

This open-door cross-border data policy has turbocharged globalisation and underwritten the fortunes of most technology billionaires on the planet. 

However, the utopian vision of the internet enabling the free flow of data, ideas and liberal democratic values lies in ruin in 2020. 

Governments in countries such as China and Russia have ironically been transparent about restricting cross-border data flows. Western politicians have simply hoped for the best. 

As far back as 1994, the Chinese government implemented restrictions in relation to the internet through the “PRC Regulations for the Safety Protection of Computer Information Systems.” 

Russia is also accelerating their disengagement from the “World Wide Web.” 

Indeed, the “World Wide Web” is an oxymoron in 2020. 

Whether you call it the “splinternet” or internet multipolarity, the trend is the same and the trend is data sovereignty. 

The internet is more clearly becoming delineated between the internet of western values, the internet of CCP values and the internet of Putin values.  

The optimist or regular Davos attendee might argue that global businesses will simply restructure their business models to keep the old globalisation model rolling along. 

The OECD highlighted the business costs however in its 2019 “Trade and Cross-Border Data Flows” Trade Policy paper. A business survey across multiple geographies and industries showed that “50% of firms perceive that personal data represents a significant amount of the data that they handle “ and “Respondents to the business questionnaire overwhelmingly reported that separating data was likely to be costly or very costly.” 

Personal data viewed as a national security asset in the age of the “splinternet” materially changes the economics of globalisation. 

A Dusty Springfield inspired “Wishin’ and “Hopin” approach to the globalisation of yesteryear will not work out well for Australia. 

Globalisation as we have known it has ended.  

It’s time for Australia to make the hard adjustment to the new reality. 

Illustration: Village Roadshow Pictures/A&E Television/Bazmark Productions/Red Wagon Entertainment.

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