techUK talks digital trade at Chatham House's Global Trade Conference

On Monday 14 October, techUK took part in the Global Trade Conference, organised by the Chatham House. This year’s conference focused on trade disputes, technology and transparency.

I took part in the panel on Digital Trade, together with Christopher Padilla, Vice President, Government and Regulatory Affairs, IBM Corporation, Alex Towers, Director of Policy and Public Affairs, BT Group, Steven Beck, Head of Trade and Supply Chain Finance, Asian Development Bank, Graham Floater, International Director, Department for Digital, Culture, Media and Sport, UK and Ziyang David Fan, Head of Digital Trade, World Economic Forum.

I offered an overview of the current state of play of the various multilateral efforts to set rules for digital trade and counteract protectionist measures, as well as a series of recommendations on what makes good regulation for digital trade.

The lack of definitions and norms for digital trade have helped create conditions where protectionism can spread. A growing number of countries have taken measures to shelter their domestic markets from international competition. These measures include web censorship, restriction of data flows, tariffs on goods and intangible products or forced transfer of IP.

There is, however, reason for cautious optimism in multilateral efforts to set rules. USMCA and CPTPP set the gold standard, by both tackling issues such as data flows, data localisation and the moratorium on digital tariffs, but also breaking new ground in cybersecurity and regulatory cooperation.

The Joint Statement Initiative ecommerce negotiations, involving almost half of the WTO members, could result in an ambitious and inclusive new deal on digital trade.

In other fora, OECD leads a programme helping policymakers with the tools to deal with digital transformation, while G20 has for the first time this year held a joint Trade & Digital Economy ministerial meeting. At G7 level, digital technology made the focus of the finance ministerial meeting.

So what would turn these discussions into commercially meaningful agreements?

techUK’s recommendations focus on 12 main principles:

1. Enable the cross-border flow of data without compromising data protection standards
2. Prevent the forced localisation of data
3. Facilitate regulatory access to data
4. Prevent separate treatment for cross-border flows of financial data
5. Secure the expansion of the Information Technology Agreement in both geographic and product coverage
6. Make the moratorium on customs duties on electronic transmissions permanent
7. Prevent the mandatory transfer of source codes, algorithms, or encryption keys as a condition of market access
8. Support the development of AI through enabling open government data and text and data mining
9. Establish cooperation on the regulation of AI, fintech and other emerging technologies
10. Establish cooperation on cybersecurity issues with an emphasis on a risk-based approach
11. Standardise minimum di minimis thresholds to facilitate e-commerce
12. Secure recognition of e-signatures and expansion of paperless trading

In addition, reducing barriers to the export of services and the movement of talent across borders are important areas, as are increasing access to telecommunications 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. Finally, given the complexity of modern tech products and the supply chains that go into producing them, it should be an aim to include reasonable local content requirements in rules of origin.

All these principles will be detailed in a comprehensive new report on digital trade that we are looking to launch by the end of November.