Beyond economics: why is digital trade significant?
The importance of digital trade extends beyond the economic. It plays a crucial role in the balance of world power, the future of the internet, and the rights of global citizens.
As discussed in a recent white paper, digital trade is a strategic asset for building international relations. It is fundamental to soft power, and its importance extends beyond economics.
Whether they are pursuing a democratic and open internet, or a sovereign restricted digital environment, nations across the globe are seeking the benefits that spring from closer digital partnerships. As a result, some nations, or “Digital Deciders”, will hold the keys to digital ascendency and the future of the internet, while others become less influential. Digital trade offers nations the opportunity to build closer relationships with these Digital Deciders and in doing so align their values, norms and standards.
Building alignment through digital trade helps develop soft power among nations with shared values, norms and standards. This holds true in most sectors but is central to digital trade with its nascent nature, lack of defined norms and the ever-changing standards that underpin each technological advancement. The stakes are also higher. Rises in global internet penetration, the ‘internet of things’, smart cities, and AI, make the ethical and social values that underpin digital trade of great importance. The nations that populate these normative blank spaces with their versions of digital truth will hold the global digital destiny in their hands.
When reduced to a basic construct, the future of the internet is balanced between two opposing views. One led by signatories to the Declaration for the Freedom of the Internet, favours a free and open internet. The other, formed by those proposing “internet sovereignty,” desires increased state control for the sake of security.
Strategic advantage can be delivered through digital trade by broadening bilateral communication, alignment on technology standards and progressing shared norms. Increased digital trade allows for enhanced two way communication as government and industry interact more frequently. The role of communication operates at a fundamental level in the promotion of cross-cultural understanding and values promotion.
Values are deeply embedded in technology standards, making them crucial to the development of soft power and key to building closer economic and security ties. Digital standards establish baseline criteria for what is acceptable, promoting good practice and greater security for adopters.
Common standards enable countries to build closer economic ties, safe in the knowledge that transferred information will be treated in the same manner as it is domestically – and therefore exportable systems are more likely to comply to the expectations of the importing nations. More countries adopting such standards could also increase the probability of these nations voting as a bloc on future technology issues and standard development in international fora.
Shared understanding and cooperative development of digital technology and processes can aid alignment between states on a broader level.
Digital trade offers the opportunity to collaborate on norms including due process and human rights, and also influences international thought on the subject. In a global context, discussion and development of these concepts is a multidirectional process of discussion, refinement and deployment. It builds consensus at international fora for more nations to act in unity to prompt shared values, increasing the soft power of those involved.
The importance of digital trade extends far beyond the financial. In our multipolar world, and its collision of value systems, digital trade can be used to expand the regional and global reach of a nation, through the aligment and proliferation of digital values, norms and standards. As such it plays a crucial role in the balance of world power, the future of the internet, and the rights of global citizens.
For more on this topic read: Unlocking Trade secrets: Achieving Cyber Power through International Trade
 Robert Morgus, Jocelyn Woolbright, Justin Sherman. (2018). The Digital Deciders: How a group of often overlooked countries could hold the keys to the future of the global internet. New America. https://www.newamerica.org/cybersecurity-initiative/reports/digital-deciders/
 White House. (2022). Declaration for the Future For the Internet. https://www.whitehouse.gov/wp-content/uploads/2022/04/Declaration-for-the-Future-for-the-Internet_Launch-Event-Signing-Version_FINAL.pdf
 Stanislav Budnitsky and Lianrui Jia, L. (2018). Branding Internet sovereignty: Digital media and the Chinese–Russian cyberalliance. European Journal of Cultural Studies, 21(5), pp. 594–613.
 Sarah Mckune and Shazeda Ahmed (2018). The Contestation and Shaping of Cyber Norms Through China's Internet Sovereignty Agenda. International Journal of Communication, 12, pp. 3835–3855.