Going digital: How to shape the modern global economy | #techUKDigitalTrade
The modern global economy is going digital. The vast majority of financial services and insurance in the UK is already provided in digital format. We are buying more clothes, gadgets and even building materials in the digital marketplace than ever before. We stream music, work virtually and rely on vast swathes of data that flow alongside food and products that are traded across the world. 80% of UK services exports are now digitally delivered.
Despite this technological shift, international trade rules have lagged behind. This raises two risks. First, a world without rules undermines fair competition, consumer trust and business security – all of which support growth. Second, it provides an environment for myriad policies and regulations to grow chaotically in different countries, potentially leading to a fragmented global economy, slower trade and negative impacts on jobs and prosperity.
Identifying these risks, the UK has set out a digital trade strategy to help shape a set of global rules and norms that can benefit everyone. The five objectives of the UK’s strategy are: open digital markets, the free flow of trusted data, business and consumer safeguards, the digitalisation of trading systems, and international cooperation with inclusive governance.
These objectives informed the G7 Digital Trade Principles – the first ever set of commitments on digital trade shared by G7 countries that we brokered under the UK Presidency. And the objectives guide the UK’s negotiations alongside other countries in shaping a global rule book under the Joint Initiative on Ecommerce at the WTO.
At the same time, we are working bilaterally with partner countries to develop a network of trade agreements that provide a consistent set of digital trade rules. This includes digital Free Trade Agreements (FTAs) with Japan, Australian, New Zealand and others. We modernised the UK-Singapore FTA through the Digital Economy Agreement, setting a new benchmark for innovative trade deals. And most recently we have modernised the UK-Ukraine FTA with an extensive Digital Trade Agreement. We have negotiated digital provisions with 11 partner countries as part of the UK’s accession to the Trans-Pacific Partnership. Discussions with the United States on our mutual interests in digital trade were kick-started by the UK-US Dialogues on the Future of Trans-Atlantic Trade, and we have ongoing negotiations with India, Switzerland, the Gulf and others.
What does this mean in practice? Let’s look at one of the UK’s five objectives in a little more detail – the digitalisation of trading systems. Shaping digitised customs systems that are interoperable alongside electronic trade documents will unlock huge opportunities for the UK and the world by making all forms of trade cheaper, faster and more secure. While few reliable figures exist on the value of digitalised trading systems, the Commonwealth Secretariat estimates that digital trade facilitation across borders could increase trade throughout the Commonwealth by around £73 billion.
Supporting our trade agreements, the UK Government has been at the forefront of removing legal barriers to digitalisation by introducing the Electronic Trade Documents Bill. By recognising digital documents for trade in English Law, the Bill will cut processing times to just 20 seconds with a net benefit of up to £2 billion for businesses.
The existence of technology does not guarantee success. Only leadership and working together will deliver the untapped potential of digital trade for all countries. The UK will continue to work with partner governments and businesses to unlock the game-changing benefits of digital trade for all.
GOV.UK (2021): G7 Trade Ministers' Digital Trade Principles. https://www.gov.uk/government/news/g7-trade-ministers-digital-trade-principles#:~:text=We%2C%20the%20G7%20Trade%20Ministers,to%20international%20trade%20and%20investment.
 Commonwealth Secretariat (2022): Quantitative Analysis of the Move to Paperless Trade
 Department for Digital, Culture, Media and Sport (2022): Impact assessment of the Electronic Trade Documents Bill