Landmark EU-Japan data deal one step closer to ratification

Once the Council gives its green light, the EU will sign the amendment of the Economic Partnership Agreement with Japan and then pass it to the European Parliament for consent.

This deal is a milestone in our joint efforts to advance the digitalisation of our societies and economies, and cross-border data flows are a crucial enabler of this development. Once ratified, the agreed provisions will be included in the EU-Japan Economic Partnership Agreement (EPA).

These provisions lay the foundation for a common approach on digital trade, sending a strong message against digital protectionism and arbitrary unjustified restrictions to data flows. They are also consistent with the EU digital agenda and EU privacy rules, and deliver on the digital trade agenda of the EU's Indo-Pacific Strategy. Similar negotiations with Korea and Singapore are also taking place.

Next steps

The agreement must now be authorised by the Council and then obtain the consent of the European Parliament. Once that happens, the agreement can enter into force.

Background

In October 2022, the EU and Japan decided to start negotiations to include rules on cross-border data flows in their EPA.

This agreement will deliver real benefits to companies active across most sectors, including financial services, transport, machinery and e-commerce. It will enable them to handle data efficiently without cumbersome administrative or storage requirements, and provide them with a predictable legal environment in which to prosper.

An important element of the deal is the removal of costly data localisation requirements, an unnecessary burden for European and Japanese businesses. This matters as it will ensure companies are not required to physically store their data locally. This would not only entail additional costs and complexities, as businesses might have to build and maintain data storage facilities in multiple places and duplicate the data they use, with a negative impact on their competitiveness, but could also undermine the security of such data.

The data economy is growing fast in the EU. The value of the EU-27 data economy was estimated at €325 billion in 2019, representing 2.6% of gross domestic product (GDP). It is expected to almost triple by 2025, reaching about €830 billion, representing 5.8% of the EU's overall GDP. For Japan, the data economy was estimated to represent 1.2% of GDP in 2019.

For more information

EU-Japan Economic Partnership Agreement 

EU-Japan conclusion on cross-border data flows

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