The result of the General Election has confirmed the decision taken in the 2016 referendum, the UK will now leave the EU on 31 January and begin negotiating the future relationship. This process will take place in the wider context of developing a new international trade strategy, where digital trade will be of paramount importance.
In a global economy where protectionism is creeping back in free trade is in dire need of champions. The UK has always been a strong defender of the importance of reducing barriers to trade, and in digital trade the UK has a great opportunity as one the worlds major digital economies to play a positive role in shaping the rules of the global economy.
To do this, it is key that the UK puts digital trade at the heart of its trade policy in all arenas as a champion of multi- and pluri-lateralism.
At the World Trade Organization, negotiations are under way under the banner of the Joint Statement Initiative on e-commerce that could result in an ambitious and inclusive new global deal on digital trade. The UK should be a leader in these talks.
The impacts of digital trade will be felt across the world, but its opportunities are not open to all at the moment. It is important that the UK recognises the links between digital technologies and their potential in helping solve the UN’s Sustainable Development Goals.
Digital Trade will also increasingly affect other policy areas. To ensure that the UK is a leader in Digital Trade, the UK should seek to proactively engage in the wide range of international fora that deal with digital issues, such as the G20 and the OECD.
Whatever form a trade agreement takes for the UK in the future, it should be based on 12 key digital trade principles:
- Enable the cross-border flow of data without compromising data protection standards
- Prevent the forced localisation of data
- Facilitate regulatory access to data
- Prevent separate treatment for cross-border flows of financial data
- the expansion of the Information Technology Agreement in both geographic and product coverage
- Make the moratorium on customs duties on electronic transmissions permanent
- Prevent the mandatory transfer of source codes, algorithms, or encryption keys as a condition of market access
- Support the development of AI through enabling open government data and text and data mining
- Establish cooperation on the regulation of AI, fintech and other emerging technologies
- Establish cooperation on cybersecurity issues with an emphasis on a risk-based approach
- Standardise minimum di minimis thresholds to facilitate e-commerce
- Secure recognition of e-signatures and expansion of paperless trading
UK free trade agreements that are built on these principles would set a new gold standard in Digital Trade. They would firmly establish data flows as an essential foundation to all trade and would break new ground in supporting innovative technologies like AI in trade agreements.
But the digital trade chapter alone is not enough to support the international growth and expansion of the UK tech sector. Reducing barriers to the export of services and the movement of talent across borders are also important areas for increasing access to telecoms markets.
The principle of limited liability has been an important part of the growth of the online economy, helping safeguard important principles of expression and protect supply chains. Governments are important buyers of technology and expanding procurement opportunities will do a lot to support the UK’s thriving GovTech sector.
Protecting the UK’s approach to standards-setting processes will be important to maintain the UK’s lead in their development while, given the complexity of modern tech products and the supply chains that go into producing them, the UK should also aim to include reasonable local content requirements in rules of origin.
In this digital century, the UK has a unique opportunity to set a new course in its trade policy and design its approach from the ground up. In all arenas, the UK should seek to place digital issues at the heart of its trade, while also ensuring that its domestic policies work in tandem with a global outlook to ensure the UK’s tech sector continues to thrive after Brexit.
To support this aim techUK will be launching our report on digital trade, A Vision for UK Digital Trade Policy on 13 January 2020.
Both members and non-members are welcome to attend for what will be an excellent debate and discussion around how the UK’s digital trade policy develops as we enter a new decade
Register here to join us to discuss the future for UK digital trade after Brexit.