'Trade policy 3.0' will Foster Inclusive Trade

World Trade Organization, 2018

Advances in technology and trade policy have the potential to reshape the trading landscape for the better In a recent article for the LSE Business Review, I introduced the classification of "trade policy 3.0" and the emergent "Internet of Rules" (IoR): a networked repository of executable forms of rules written in computer language.

Trade, Law and Development, 2021

The Internet’s potential to enable micro, small, and medium-sized enterprises (MSMEs) to conduct international commercial transactions has yet to be fully realized. Small enterprises, especially MSMEs based in developing countries, continue to face substantial obstacles to their participation in trade. While ‘International Economic Law’ has evolved amidst rapid globalisation and technological change, developing countries’ MSMEs are frequently unable to achieve the benefits associated with trade liberalisation. As ‘new generation’ agreements introduce further legal complexity in both the number and scope of trade rules, this article investigates Chile’s application of information and communications technology (ICT) to improve the accessibility and functionality of commercial policies. With an emphasis on computational approaches to trade policy design and delivery, the Undersecretary of International Economic Relations (SUBREI) of the Ministry of Foreign Affairs of Chile has launched a pilot programme to contribute to an open repository of rules in a digital form: ‘An Internet of Rules’ (IoR). Along with reference data, the computational expression and online publication of rules, that may be ‘in effect’ or ‘applicable’ to cross-border transactions, can improve access and use by people and machines alike. Against the backdrop of the country’s history of reform and membership in the World Trade Organization (WTO), the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), and the Digital Economy Partnership Agreement (DEPA), the investigation articulates Chile’s ongoing contribution to an IoR as well as the alignment of its policy digitalisation efforts with national development strategies.

OECD, 2020

The World Trade Organization (WTO) has been slow so far in responding to the various challenges arising from the integration of electronic commerce into cross-border trading activities. This slow response in the multilateral system is largely attributable to the complex, multifaceted nature of digital trade or electronic commerce, coupled with the conflict among countries on issues of Internet regulation and digital development. Nonetheless, international trade agreements, particularly at the WTO, play an important role in the creation of a secure, predictable, and trustworthy global regulatory framework for digital trade, and therefore, need to be reformed in a timely and meaningful manner to support the growth of the digital economy. Accordingly, this Article focuses on the limitations of the General Agreement on Trade in Services (GATS) in liberalizing the digital sector, eliminating new types of barriers to digital trade such as data localization, as well as addressing “new” regulatory issues pertaining to digital trade such as cross-border data flows, data protection, cybersecurity, and online consumer protection. Further, the introduction of comprehensive provisions on such issues in Electronic Commerce Chapters of Preferential Trade Agreements (PTAs) in recent years increases the possibility of a potential discord between PTA rules and the GATS. Moreover, since rules on digital trade are heterogeneous and often conflict across different PTAs, this discord can potentially fragment and disrupt the global framework for digital trade in the long run. Therefore, in the Authors’ view, WTO law should take a central role in facilitating a secure and stable legal regulatory environment for cross-border electronic commerce while undercutting the current upswing in digital protectionism. To address the above deficiencies in the GATS, the Authors recommend extensive reforms within the existing multilateral framework rather than simply relying on WTO tribunals to creatively interpret existing rules. The Authors believe three broad areas of reform are necessary in the multilateral framework to promote the digital economy in a holistic and balanced manner—improving market access, addressing regulatory barriers in digital trade, and supporting developing countries to integrate faster into the digital economy. Several of the Member proposals on electronic commerce placed before the WTO Work Programme on Electronic Commerce in recent months provide a useful starting point for constructive dialogue and negotiations at the WTO, particularly in facilitating a sound regulatory framework for cross-border data flows, while enhancing consumer confidence and promoting interests of developing countries and small and medium-sized enterprises (SMEs). These reforms can be supported through incremental changes within the GATS framework (such as adoption of domestic regulations under GATS Article VI or development of a Reference Paper or Annex on Electronic Commerce) or through the adoption of a new WTO agreement. In the Authors’ view, although the second route is politically more challenging, it is better suited to address the cross-cutting nature of issues in digital trade, as well as to overcome the various challenges arising from the antiquated structure of the GATS. Irrespective of which route is taken for initiating these reforms, the WTO needs to creatively engage with the broader network of institutions dealing with digital trade and internet governance, including multistakeholder institutions, to contribute meaningfully to the formation of a coherent framework for digital trade.

A number of legislative frameworks and policies exercise various constraints on access to the Internet for certain goods, services, and other content. Some of these are recognized by most, if not all market participants as legitimate (data protection laws, measures to combat fraud, as well as the enforcement of intellectual property rights), whereas others are seen as merely disguised protectionism (onerous and/or opaque registration or licensing rules and the heavy-handed application of censorship policies to name just two). This paper discusses the use that is increasingly being contemplated or made of trade rules, particularly WTO disciplines, to tackle those constraints that are viewed as either disguised protectionism or a breach of WTO commitments. It discusses the scope of these rules, the uses they have been put to in order to pry open services markets up to now, and the likely limits of their application. It also looks at how those interests most concerned with exporting goods and services via the internet have recognized the limits posed by existing trade rules - at least implicitly - and how they are seeking to address these shortcomings by drafting new rules, either at the WTO or in fora such as bilateral and plurilateral trade agreements.

2019

Digitalisation is transforming the economy and redefining trade. Recently, members of the World Trade Organization (WTO) have started to discuss how trade policies and rules should be adapted to address this transformation. For example, in January 2019, 76 WTO members announced the launch of “negotiations on trade-related aspects of electronic commerce”. The scope of these e-commerce negotiations is yet to be defined, but to ban tariffs on electronic trans­missions will certainly be on the priority list of WTO members such as the United States (US) and the European Union (EU). The idea of banning tariffs on electronic transmission originated at the WTO’s Ministerial Conference (MC) in 1998, when Members declared that they would “continue their current practice of not imposing customs duties on electronic transmissions”. This temporary moratorium on e-commerce tariffs needs to be regularly extended, requiring a decision made “by consensus”. Members have repeatedly extended the morato...

2011

E15 Blogs - E15 Initiative - World economic Forum / International Centre for Trade and Sustainable Development , 2018

The expansion of the trade facilitation agenda, expressed as Facilitation 2.0, is critical in a time of global industrial and societal reorganisation, of which the digitisation of economic activity, a shifting volume and geography of foreign direct investment, and a rising share of high-productivity services are defining features. In the digital age, issues such as e-commerce, investment, and services have become the focus of economic policymaking for their potential to promote inclusive growth, and foster sustainable development. This article argues that in an increasingly integrated world, complexity requires a comprehensive facilitation agenda built on the foundations provided by the World Trade Organization's Trade Facilitation Agreement. One year on from its entry into force, the World Trade Organization (WTO) Trade Facilitation Agreement (TFA), the only multilateral deal to have eluded the Doha Round deadlock, has allowed for sustained momentum on the trade policy reform agenda and provided new oxygen in a stifled negotiating environment. Ratified by four in five WTO members, the experience of the TFA makes a cogent case for the negotiation of trade-enabling rules. According to WTO data, the full implementation of the TFA could reduce worldwide trade costs by an average of 14.3 percent, with the largest gains for small and medium-size enterprises in developing and least developed countries. The New Frontier for Trade Facilitation However significant, the TFA in its current form extends only to trade in physical goods and is insufficient for the features of the new economy, missing a large part of what increasingly matters to production models and economic development today. New and changing business models, structures of production, and policy aims reveal a new frontier for facilitation, necessary to catalyse and maximise benefits in the digital age. Simplified and harmonised procedures in key policy areas, namely, investment, services, and e-commerce are the next step in ensuring that the WTO effectively responds to 21st century economic and developmental imperatives, and reaffirm the relevance and centrality of the multilateral rules-based system. The expansion of the trade facilitation agenda, expressed as Facilitation 2.0, is critical in a time of global industrial and societal reorganisation, of which the digitisation of economic activity, a shifting volume and geography of foreign direct investment (FDI), and a rising share of high-productivity services are defining features. In the digital age, issues such as e-commerce, investment, and services

The development of new digital technologies has resulted in significant transformations in daily life, from the arrival of online shopping to more fundamental changes in the ways we work and communicate. Many of these changes raise questions that transcend market access and liberalisation and demand cooperation and coherent regulatory design. International trade regulation has hitherto not reacted in a forward-looking manner to the digital revolution; particularly at the multilateral level, legal engineering has yielded few tangible results.This book examines whether WTO laws possess the necessary flexibility and resilience to accommodate the changes brought about by burgeoning digital trade. By revealing both the potential and the limitations of the WTO framework, it provides a broad picture of the interaction between digital technologies and trade regulation, links the often disconnected discourses of international trade law, intellectual property and cyberlaw, and explores discre...

Recent estimates suggest that the potential economic growth to be realized from liberalizing barriers to Internet access and digital trade across the G20 could be as much as US$4.2 trillion, and this potential is even greater for the developing world, where a combination of growing youth-aged populations, rising incomes, and urbanization will reduce the marginal cost of extending access to a wider population in the period immediately ahead. However, realizing this opportunity will depend heavily on removing constraints that inhibit universal Internet access and preventing the emergence of new barriers to digital trade. This paper presents a survey of the mosaic of trade barriers that currently affect the Internet economy. It looks at how traditional trade issues need to be rethought in light of the Internet, suggests two new areas of trade policy that could further liberalise digital trade, and proposes a methodology for further progress in this area.