Digital Trade in International Trade Agreements: What Businesses Need to Know Now
International trade agreements increasingly include provisions relating to digital trade. Recent examples include the UK-Singapore Digital Economy Agreement, the UK’s free trade agreements with Japan, Australia and New Zealand, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Digital trade provisions create obligations on the states that are party to the agreement and seek to liberalise digital trade between them by reducing barriers to market access. Businesses carrying out digital trade should be aware of the benefits of these provisions, as well as where they might give rise to compliance considerations.
Digital trade provisions in international trade agreements
Digital trade rules in international trade agreements typically include:
- Provisions requiring states to not restrict the cross-border transfer of data or to require computing facilities to be located in that state in order to access its market. These provisions could benefit businesses with data-intensive operations such as cloud service providers, e-commerce companies and financial services, and could facilitate the use of centralised data hosting services or global hubs.
- Provisions that prevent states from demanding access to source code as a condition for market access, which allow businesses to retain control over their technology and IP. This is of relevance for companies developing innovative software, machine learning models or artificial intelligence looking to enter new markets.
- Provisions that prevent states from denying the legal validity or effect of electronic contracts and signatures. This provides businesses with legal certainty when entering into contracts in new markets and reduces administrative time and cost associated with paperwork.
- Provisions preventing states from discriminating against digital products (such as computer programs, text and videos) of the other party. This promotes a level playing field and fair competition for digital exporters, particular those in media, entertainment and software-as-a-service sectors.
- Provisions promoting interoperability of frameworks for electronic invoicing, authentication, and digital identities. Such provisions seek to reduce regulatory divergence, facilitating a more predictable trading environment for businesses.
These provisions create favourable conditions for digital trade and facilitate market access for businesses in this sector. However, digital trade rules often also include provisions that could give rise to compliance considerations for businesses, including provisions requiring states to maintain rules around data protection, and provisions requiring states to regulate unsolicited commercial electronic messages (i.e. spam).
Considerations for businesses
It is important for businesses to be aware of potential regulatory impacts of these various provisions. Practical steps businesses can take to stay on top of developments include:
- Monitoring digital trade provisions in international trade agreements and identifying opportunities arising from liberalisation of digital trade. For example, rules in international trade agreements around cross border data flows measures could influence decisions around location of data storage facilities. Prohibitions on requirements for computing facilities to be located within a state could make that state a more attractive destination for investment and establishment.
- Monitoring domestic implementation of digital trade rules by governments where it might modify the compliance landscape, for example in relation to data protection or regulation of electronic messages.
- Participating in government-stakeholder engagement, by providing valuable assessments of the on-ground implementation of digital trade provisions, and engaging with trade advisory groups, industry associations, and working groups established under international trade agreements. This can be an opportunity to contribute to policy development and ensure businesses’ experience of implementation of digital trade rules is taken into account in state-state negotiations.
Looking forward
The global digital trade landscape is rapidly changing, with new forms of technology driving regulatory changes, public concerns around privacy and artificial intelligence accountability, tensions between digital trade and digital sovereignty as well as regulatory divergences across countries.
Businesses should work with trade and tech law experts to stay on top of regional and international developments on digital trade policy, in order to anticipate regulatory shifts and adjust market access approaches. By actively monitoring such shifts, businesses can also participate meaningfully in stakeholder consultations, trade advisory groups and industry associations.
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Sabina Ciofu is Associate Director – International, running the International Policy and Trade Programme at techUK.
Based in Brussels, she leads our EU policy and engagement. She is also our lead on international trade policy, with a focus on digital trade chapter in FTAs, regulatory cooperation as well as broader engagement with the G7, G20, WTO and OECD.
As a transatlanticist at heart, Sabina is a GMF Marshall Memorial fellow and issue-lead on the EU-US Trade and Technology Council, within DigitalEurope.
Previously, she worked as Policy Advisor to a Member of the European Parliament for almost a decade, where she specialised in tech regulation, international trade and EU-US relations.
Sabina loves building communities and bringing people together. She is the founder of the Gentlewomen’s Club and co-organiser of the Young Professionals in Digital Policy. Previously, as a member of the World Economic Forum’s Global Shapers Community, she led several youth civic engagement and gender equality projects.
She sits on the Advisory Board of the University College London European Institute, Café Transatlantique, a network of women in transatlantic technology policy and The Nine, Brussels’ first members-only club designed for women.
Sabina holds an MA in War Studies from King’s College London and a BA in Classics from the University of Cambridge.
Policy Manager for International Policy and Trade, techUK
Daniel Clarke
Policy Manager for International Policy and Trade, techUK
Dan joined techUK as a Policy Manager for International Policy and Trade in March 2023.
Before techUK, Dan worked for data and consulting company GlobalData as an analyst of tech and geopolitics. He has also worked in public affairs, political polling, and has written freelance for the New Statesman and Investment Monitor.
Dan has a degree in MSc International Public Policy from University College London, and a BA Geography degree from the University of Sussex.
Outside of work, Dan is a big fan of football, cooking, going to see live music, and reading about international affairs.
Theo joined techUK in 2024 as EU Policy Manager. Based in Brussels, he works on our EU policy and engagement.
Theo is an experienced policy adviser who has helped connect EU and non-EU decision makers.
Prior to techUK, Theo worked at the EU delegation to Australia, the Israeli trade mission to the EU, and the City of London Corporation’s Brussels office. In his role, Theo ensures that techUK members are well-informed about EU policy, its origins, and its implications, while also facilitating valuable input to Brussels-based decision-makers.
Theo holds and LLM in International and European law, and an MA in European Studies, both from the University of Amsterdam.
Lewis' programmes cover a range of policy areas within Market Access (international trade regulation, sanctions and export controls, technical standards and product compliance, supply chains) and Consumer Tech (media and broadcast policy, consumer electronics, and connected home technology).
Prior to joining techUK, Lewis worked in government affairs and policy roles for international trade associations in Southeast Asia including the American Malaysian Chamber of Commerce and the European Chamber of Commerce in Cambodia.
He holds an undergraduate degree in Social and Political Sciences from the University of Cambridge and an MSc in Public Policy & Management from SOAS University of London.
Tess joined techUK as an Policy and Public Affairs Team Assistant in November of 2024. In this role, she supports areas such as administration, member communications and media content.
Before joining the Team, she gained experience working as an Intern in both campaign support for MPs and Councilors during the 2024 Local and General Election, and working for the Casimir Pulaski Foundation on defence and international secuirty. She has worked for multiple charities, on issues such as the climate crisis, educational inequality and Violence Against Women and Girls (VAWG). In 2023, Tess obtained her Bachelors of Arts in Politics and International Relations from the University of Nottingham.
