The Global Future Council on International Trade and Investment has identified seven digital trade trends in Asia and highlighted challenge areas for digital trade policy in a paper published by the World Economic Forum (WEF).
The document entitled "Digital commerce advances in Asia» considers how officials across Asia have responded to the explosive growth of digital trade in the region. Noting that digital trade is not new – the World Trade Organization (WTO) created a work programme on the topic in 1998 – the paper emphasises the importance of the digital economy, which has been reinforced by COVID-19 and associated lockdowns.
However, The authors emphasize that multiple and changing definitions of “digital commerce” do not always align. with existing trade agreements, which may fail to capture four key dimensions of the term: 1) digital goods and services (e.g. software); 2) digitally delivered tangible goods and services (e.g. apparel); 3) digital enablers of trade in tangible goods (e.g. logistics tracking); and 4) emerging transformative digital technologies (e.g. blockchain, artificial intelligence (AI)). Accordingly, the paper examines emerging trends and considers how digital trade agreements and other regulatory responses, such as the implementation of digital tax policies, may affect the growth of digital trade in Asia.
The document identifies Seven general trends in digital commerce:
- the rise of digital ecosystems and increased connectivity in the region;
- regional platform links or “unicorns” that may be less familiar outside the region;
- Asian companies' leading position in providing digital/physical interfaces, driven by 5G;
- Asia's increasingly important role as a hub for cloud services, including data collection and analysis;
- the growing consumer preference for subscription services, including live streaming;
- a growing number of applications that address gaps in digital payments and financial services; and
- the increasing potential for misuse or harm that could arise from digitally connected devices and users.
Given that these trends are often captured or taken into account in trade agreements, including the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the Digital Economy Partnership Agreement (DEPA) and the Digital Economy Agreement (DEA), the approaches of the region’s agreements have been at the forefront of rule-making on digital trade issues. These agreements generally aim to reduce trade barriers to the digital economy, the paper summarises, and build compatible standards to facilitate interoperability and cross-border consumer trust. The paper compares the DEA, DEPA and CPTPP across 23 digital trade provisions, highlighting whether provisions are identical across agreements, whether a provision in an agreement is more or less comprehensive than the others, and whether a similar provision is missing from the agreement.
The report identifies Five challenge areas for digital trade policies that have emerged as key points of debate, where governments struggle to reach consensus despite having made progress through previous agreements. They continue to exist Challenges in data transfer mechanisms, consumer protection, digital trade facilitation, emerging technologies and digital tax policies.
The WEF Global Future Council on International Trade and Investment is an interdisciplinary, multi-stakeholder knowledge network dedicated to promoting innovative thinking to shape a more resilient, inclusive and sustainable future. The Council aims to help stakeholders understand the new global economic landscape and point to developments on the horizon.
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