Digital Economy

Digitalisation is a strong driver of global growth and development. It also supports trade creation, efficiency, and access. Digital solutions are used to sell and deliver products and services, while businesses move data across borders as an intrinsic part of their daily operations.

International trade and investment face new or newly evident challenges in a digital economy. Market access restrictions, localisation requirements, intellectual property rights, data privacy, cybersecurity, taxation and jurisdictional uncertainties, and poorly adapted customs services are frequently cited.

Several of these challenges overlap with a broader debate about regulatory frameworks for the digital environment. Definitional questions about the location of digital activities or their treatment remain unclear.

Other issues are more familiar but brought into clearer focus by increased SME participation in international trade, empowered by online visibility. Customs regimes are often not prepared to deal with large numbers of independently processed small-value items while customs information interfaces are inappropriate for small businesses. In parallel, service delivery, investment, and innovation models are revolutionised by digital global value chains.

While the WTO’s E-Commerce Programme and the inclusion of digital issues in some bilateral and regional trade agreements signal the importance of trade in digital goods and services, as well as cross-border data flows, for the trading system, the full implications of the ongoing technological shift are still unclear and require comprehensive responses from the global trading system.

Against this background, the objectives of the expert group are to: a) Examine the challenges and opportunities that the growth of the digital economy creates for trade and development; (b) Identify constraints and possible areas for improvement in the global trade system to enhance economic benefits from the digital economy; (c) Propose specific options for the governance of international trade in a digital economy.

Overarching questions and issues to be addressed by the group include:

• What are the changes arising from the expansion of the digital economy?
• Which are the possible short term and long terms adjustments and changes needed in global trade rules to facilitate trans-border data and digital trade?