Digital trade - Need for alliances?

A recent piece in CFR on digital trade interestingly covered digital trade, cyber security, privacy as well as national security concerns. A number of issues concerning what a digital trade agreement should look like, how geo-politics would play out, how data localisation can impact internet trade as well as how internet governance and digital trade are intricately connected was brought out. Enshrining "demcratic values" in digital trade agreements is a strategy to counter geo-political threats. reference is also made to the digital tax on the big US tech companies, privacy concerns as well as the control of the internet by regimes across the world.

Titled "Weaponizing Digital Trade" by Robert K. Knake, the paper has ambitious goals and ambitions for a democratic alliance:

The key recommendations are:

The U.S. government should work with other democratic nations, the technology industry, nonprofits, academia, and user groups to create a digital trade zone with rules that govern content moderation, data localization, cross-border cybercrime, and obligations to assist during cyberattacks. It should then establish the organizations and mechanisms necessary to implement these agreements. By tying access to the digital trade zone to obligations for cybersecurity, privacy, and law enforcement cooperation, the United States and its democratic allies can create a compelling alternative to authoritarian visions for the internet. In doing so, the United States and its allies can force countries to choose between access to their markets or tight control of the internet in the Chinese model, thereby creating the kind of leverage that has been missing from U.S. efforts to promote an open, interoperable, secure, and reliable internet. Tariffs on digital goods from outside the trade zone should be used, at least in part, to fund joint cybersecurity efforts within the zone.

How would trade negotiators view this agenda? The article foresees some reality:

Digital trade can be enhanced if the mitigation strategies to the ills it creates are baked into digital trade agreements; conversely, addressing cybercrime and other digital ills that freely flow across open digital borders will only happen if these strategies are tied to digital trade. Such thinking, however, is anathema to trade negotiators, who are typically hostile to the concerns of law enforcement and actively work to limit oversight and enforcement mechanisms in trade negotiations, believing that they will encumber free trade. Yet failing to build in these mechanisms will ultimately harm the prospects of increased digital trade if threats in the digital domain are not curtailed.

Apart from this, there is an issue of the north and south, developinga nd the developed, data sovereignty and data production. Are these not relevant? Is free flow of data between democratic regimes a superior goal than say developing local data champions? A reference has been made to the gold standard digital trade agreements in the USMCA and the need to go beyond. Will the competing goals of geopolitics and economic independence in data production clash? Where will the line be drawn, by whom and to what extent? Is there a middle path here?