Shedding New Light on the Evolving Regulatory Framework for Digital Services Trade

Report of a session organised by Organisation for Economic Cooperation and Development (OECD) on September 28, 2022, as part of the WTO Public Forum 2022: Towards a sustainable and inclusive recovery.

This session presented new insights on the nature, evolution, and drivers of digital trade restrictiveness in several regions, drawing on the work undertaken with three UN regional commissions (UNECLAC, UNESCAP and UNECA). Barriers to digital trade can affect the uptake of new technologies, inhibit competition and slow down economic growth and recovery. Understanding the nature and evolution of these barriers is therefore key in ensuring that digital trade works for all. Recent efforts to measure the regulatory environment affecting digital trade, including the OECD Digital Services Trade Restrictiveness Index, have shown that the measures that affect digital trade are on the rise and that there is a wide heterogeneity across regions.

At the start of the session, Panellists shared their common belief that the regulatory environment is critical for digital services to thrive. A panellist emphasised that the regulatory environment is as important as the infrastructure needed for digital trade development in Africa. Speakers then shared findings from the UNECLAC and the UNECA mapping of the digital regulatory environment for digital services trade in Asia and Africa, respectively. The diversity of regulations between countries has been identified as a critical challenge in the Asia Pacific, and recent digital trade agreements have given a forum for harmonisation. The same challenge has been highlighted in Africa and to address it the African Union is working on developing a regulatory harmonisation plan as part of its Digital Transformation Strategy 2020-2030. Furthermore, it was pointed out that 50 per cent of digital services trade-restrictive regulations in covered African countries are concentrated in ICT infrastructure sectors and the limited competition in these sectors. Limited protection of data.

From businesses’ perspective, panellists emphasised that while regulating digital service trade enhances consumer and business trust and eliminates business uncertainties, those of restrictive nature usually hurt small and medium enterprises (SMEs) more than large enterprises. Discussions concluded that achieving “balanced” and “fit for purpose” regulations, that promote competition, transparency and non-discrimination is what matters.

On the panel were Janos Ferencz, Trade Policy Analyst, Organisation for Economic Cooperation and Development (OECD); Witada Anukoonwattaka, Economic Affairs Officer, United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP); Hildegunn Kyvik Nordås, Visiting Professor, Örebro University; Simon Mevel, Economic Affairs Officer, United Nations Economic Commission for Africa (UNECA); Tiffany Smith, Vice President, Global Trade Policy, National Foreign Trade Council (NFTC).