Sunday, February 21, 2021

Digital Trade - Perspective for growth

Digital trade has captivated debate domestically as well as in international trade circles for many years now. the growth of digital technologies and digital trade is undeniable. It is also a fact that a large number of developing countries are using digital technologies to further social inclusion and growth. Issues of digital divide, data flows, data privacy, big tech and digital divide dominate the discussions.

What role do trade rules have in fostering digital trade growth and opportunities? Is there a single way of charting out trade rules? Do all players benefit equally from strong, digital trade rules? Like goods and other services, are there predominant digital trade providers and receivers?

A 2021 WTO publications on digital trade is an interesting read. Titled "Adapting to the Digital Trade Era:Challenges and opportunities", it gives a birds eye view of digital trade agendas, progress and challenges from across the world.

What trade strategy should countries adopt with respect to digital trade? An open, free, non-interventionist stance to benefit from digital technologies and products from across the world? Or an "industrial strategy" of developing national players? Have the great powers in digital trade today always invested in open policies towards digital trade or have they had a graded policy?

As the conclusion of the report (p.346) states:

There also is a convergence on the view that while digital trade offers opportunities, there is a risk as it can also exacerbate inequality and limit inclusiveness. Developed-country policymakers tend to stress the importance of the free transmission of data across borders, while some developing-country policymakers have advocated for a digital industrialization strategy to limit competition from the large technology firms to encourage the growth of local digital capabilities. Developing countries that lack the tools to compete in the new digital environment are in danger of being left even further behind. The challenge is to achieve inclusive growth to the benefit of all, with no member being left out and not deepening the economic divide. What to regulate, how to regulate and at what level? Multilaterally, regionally or bilaterally? 

Will there be a consensus that digital rules multilaterally are the way forward for digital trade growth? Are national regulatory and business environments more important and strategic than international engagement? Or is it a strategic mix of both? What is the mix and who decides? Are there minimum standards that one needs to adhere to?

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