If business groups in Canada and the United States get their way, new free-trade rules would limit the ability of governments to block cross-border flows of personal and financial data.

The Canadian Chamber of Commerce, which speaks for 200,000 businesses across the country, is joining the U.S. Chamber of Commerce to push for new data standards in future free-trade deals, starting with the 12-country Trans-Pacific Partnership.

The lobbying push is part of an effort by the business community to stamp out what it sees as rising "digital protectionism" – everything from Internet censorship to privacy laws mandating the storage of certain personal data within countries.

Story continues below advertisement

"What we're seeing increasingly is that governments are trying to impose controls on the flow of data in a variety of ways," said Perrin Beatty, the Canadian chamber's president and chief executive officer.

Countries such as Australia and New Zealand – both TPP members – are considering privacy laws that could force companies to store health and other personal data on servers within their borders.

In Canada, Privacy Commissioner Jennifer Stoddart has called for a major overhaul of the federal Personal Information Protection and Electronic Documents Act to deal with cloud-based computing, powerful data mining software, government surveillance and cyberthreats.

"The Internet is increasingly the highway that's used to transport commerce," Mr. Beatty explained in an interview. "So the issue isn't whether we have good privacy legislation, it's one of coherence. I understand the reasons for forced storage of data, but what you do is balkanize the whole network and make it very difficult for companies to operate globally."

Officials from Canada and the other TPP member countries are due to meet in Malaysia July 15-25 for the next round of negotiations. Negotiators are targeting the end of this year to complete a deal, although many trade experts are skeptical a deal will be reached that soon.

The effort to make the TPP a vehicle for setting a new international standard on data flows doesn't sit well with many privacy experts.

Recent revelations that U.S. intelligence agencies are tracking phone calls passing through phone company servers and gathering data about users of technology from companies including Apple Inc., Google Inc. and Microsoft Corp. should make people pause, said Michael Geist, a University of Ottawa law professor and privacy-law expert.

Story continues below advertisement

"Data is an important part of economic activity, but the notion that we should be establishing a common framework for the movement of data, without establishing common levels of protection for that data, is really problematic," Prof. Geist said.

Among the concerns, he explained, is that the TPP could limit what regulators or legislators are able to do to protect privacy.

But business officials say the TPP is precisely the right venue to tackle rules of conduct on the new frontier where so much commerce takes place.

"The ambition of the TPP has been set to capture 21st-century trade, and you can't not try to find a standard for an issue like cross-border data flow," said Catherine Mellor, Asian director at the U.S. Chamber of Commerce. "We want to use the TPP as a model for what can be done in other forums because we have the political will and the momentum."

Ms. Mellor and others warn that privacy rules could stifle efficiency and deny opportunity to small businesses by forcing companies into costly duplication of data storage.

Without clear and uniform rules, global businesses could face thorny legal disputes and a jurisdictional maze, they say. It's not clear which privacy laws apply, for example, when data is located on a server in one country, owned by a company in another and accessed by customers in a third jurisdiction.