Think Piece

Addressing Barriers to Digital Trade

December 2015

Recent estimates suggest that the potential economic growth to be realized from liberalizing barriers to Internet access and digital trade across the G20 could be as much as US$4.2 trillion, and this potential is even greater for the developing world, where a combination of growing youth-aged populations, rising incomes, and urbanization will reduce the marginal cost of extending access to a wider population in the period immediately ahead. However, realizing this opportunity will depend heavily on removing constraints that inhibit universal Internet access and preventing the emergence of new barriers to digital trade. This paper presents a survey of the mosaic of trade barriers that currently affect the Internet economy. It looks at how traditional trade issues need to be rethought in light of the Internet, suggests two new areas of trade policy that could further liberalise digital trade, and proposes a methodology for further progress in this area.

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