Software is embedded into more and more products and services. Lines of code lie behind devices in our homes and pockets. Businesses are also increasingly relying on software-based tools to improve their operations, design products, set prices, and advertise goods and services. As software's presence in our lives and businesses grows, policy-makers have the difficult task of striking the right balance between encouraging innovation and minimising the risks that software-based solutions bring. Software’s expanding presence in internationally traded goods and services means that trade negotiators are also being tasked nowadays with finding this fine balance.

Recent trade agreements incorporate specific provisions related to source code -- namely the lines of code that lie behind every software product and service. These provisions prohibit governments and their agencies from requiring the transfer of, or access to, source code. This general prohibition matters. On the one hand, it encourages international trade by reassuring foreign software developers that they will not have to disclose the source code underlying their products and services. On the other hand, this general prohibition, even when accompanied by extensive exemptions, places limitations on the powers of governments and their agencies to examine source code.

The aim of this paper is to provide a primer to trade negotiators on source code disclosure. It is the first comprehensive paper to cover what source code is, provide a landscape mapping of the possible motivations for government-mandated source code disclosure requirements, and examine how recent trade agreements have handled source code disclosure. In the trade agreements that we examined, we find that the exceptions to the general prohibition on requiring access to source code are comparatively narrow and do not cover the multitude of reasons why public authorities might want access to source code. We also note a tendency in recent agreements to expand the scope of the general prohibition on source code access to include algorithms. We recommend that trade negotiators give thorough consideration to all legitimate reasons why public authorities might need access to source code, and exercise caution in expanding the scope of the general prohibition on source code access to include algorithms.

Citation information

Dorobantu, C., Ostmann, F., & Hitrova, C. (2021). Source code disclosure: A primer for trade negotiators. In I. Borchert & L. A. Winters (Eds.), Addressing Impediments to Digital Trade (pp. 105-140). London: CEPR Press.

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