DiPP - DIGITAL TRADE: What are the opportunities of the Internet for EU Trade?

DIGITALEUROPE partnered with ICTSD for the Brussels launch of their report “Digital Trade: the opportunities of the Internet for International Trade”.

As the WTO was slowing down under the weight of the ill-fated Doha Development Agenda, ICTSD, a 20 year-old organisation, has picked up the slack by way of E15, a 6 year-old body aimed to identify issues where policy action is urgently needed. Competitiveness matters, therefore political foresight matters too.

Business is currently facing strong headwinds in the form of economic slump, rising protectionism, loss of scale and interoperability. Private data flows are approximately 40% of global flows: they make up one layer of complexity. Other issues are the moratorium on e-commerce, data localisation and other exceptions ‘so large that you can drive a truck through’. It is an absolute prerequisite to understand better which sets of data are free to flow, which aren’t.

In this perspective, current negotiators do a superb job of sowing the seeds of the connected world that will benefit all stakeholders. Among the next steps, the Work Programme on e-commerce should be given a new lease of life, the Trade Facilitation Agreement should start being implemented and larger, more long-term discussions should start.

These plans mesh well with the Commission’s ‘Trade for All’ strategy, which finds itself vindicated by the fact that the digital economy keeps growing despite the crisis. This benefits the EU in its capacity as top exporter of digital services. Protectionism is rising though and DG Trade has to address these restrictions. In the post-Nairobi WTO context and in the midst of increasing security breaches,  Industry is encouraged to do some ‘soul-searching’ and to find like-minded partners able to support the resulting positions effectively. The ‘soul-searching’ piece is no picnic, as illustrated by BUSINESSEUROPE which is still struggling with a definition of digital trade. Not that ICT is not transforming almost every sector, but the nature of this transformation is not always measured properly.

Even within the EU, the link between the goals of the DSM strategy announced on May 6^th 2015 and the results seen so far is occasionally hard to spot. In other words, not all DSM proposals will be able to match DSM problems. For lack of much-needed clarity, barriers to ICT-enabled business are raised everywhere, as exemplified by China’s regulatory spree. Action is needed now, possibly through the G7 and G20, on all fronts: free flow of data, forced localisation, encryption, limit to ICT-related investment, consumer trust, regulatory cooperation, counterfeiting, etc.

This being said, the jury is still out as to a dedicated digital chapter is needed in all agreements to set digital trade on the right course. Time-honoured principles such as MFN, national treatment, transparency do help, and it doesn’t have to be all about data.

Click here to get access to the report “Digital Trade: the opportunities of the Internet for International Trade”