Davos participants call for digital trade deal

Participants attend a session during the annual World Economic Forum (WEF) meeting in Davos, January 23, 2013. REUTERS/Pascal Lauener (SWITZERLAND - Tags: POLITICS BUSINESS) - GM1E91N1A2I01
Digitalisation is transforming the global economy
Image: REUTERS/Pascal Lauener

By Kimberley BotwrightCommunity Lead, International Trade and Investment, , World Economic Forum

“Digitalisation is transforming the global economy, but it is still hard, and in some cases getting harder, to do business abroad. More is required to facilitate trade for all players. Participants at a workshop at the World Economic Forum Annual Meeting call for an ambitious and inclusive framework that applies long-standing, high-standard trade principles to digital trade. Participants emphasised the need for this to address e-commerce barriers, enable connectivity, provide inter-operability and standards, apply existing norms to new technologies and facilitate greater global participation in the digital economy. Such efforts are needed for all businesses, particularly small and medium-sized. Participants urge governments to move forward through the joint statement initiative on e-commerce at the WTO, as well as regional and bilateral initiatives.”

This was the message from business, academia and civil society participants at a digital trade workshop at the World Economic Forum Annual Meeting, calling for new digital trade deal between countries

Around 90 regional trade deals already address digital trade in some way. Yet, many small businesses still face challenges selling online across borders, while restrictions on data flows across borders have soared in the last two decades. So, there’s still much to be done to reduce the complexity and costs of digital trade.

A group of 60-plus WTO members are working to commit to new cross-regional trade negotiations on e-commerce later this week in Davos. The move follows a year of in-depth discussions on where trade rules could be helpful for the global digital economy. Meetings have been open for all WTO members to participate.

Governments are increasingly aware of the need to both facilitate digital trade and ensure the best outcomes from it – like boosting small business opportunities or protecting consumers. Some issues, like rules on data flows or “digital tariffs”, are more heated than others. Domestic debates on digital competition or tax may spill over into international trade politics. Nuanced unpacking of the various issues is needed.

Consultation with experts, the private sector and consumer groups should be sought in capitals around the world for an eventual e-commerce trade deal to be both relevant and legitimate. Development cooperation on digital issues will need to be prioritised in parallel.

The road might not be easy for these talks. But launching negotiations in the WTO could help contribute much-needed international debate. Done right, the result could set parameters for technology and trade to contribute to more inclusive economic growth and development.