Despite its overwhelming importance at the heart of the international trade system, members of the World Trade Organisation (WTO) have concluded their Ministerial in Abu Dhabi (“MC13”) with only a meagre outcome.
Surfing the digital wave: Developing enabling rules for digital trade
Surfing the digital wave
Digital technology is transforming everything about the way that we live, work and do business. Trade is no exception. But how to “surf the digital wave” successfully, rather than getting swept up in a digital tsunami, is challenging. New Zealand is involved in two important new negotiations trying to develop trade-friendly digital rules to benefit Kiwi businesses and consumers.
We’re all digital now
“Digital trade” is about far more than simply exports of software or videogames: it takes in goods trade – think exports of milk to China – exported via large e-commerce platforms like Amazon and Alibaba, streaming services like Netflix, internet-based services like logistics or accounting, and even cloud computing. Data flows – which underpin all digital trade – are now as crucial to the global economy as electricity or labour.
New rules are needed to realise the promise of inclusive growth
Digital trade holds huge promise, including for groups that have struggled to succeed in traditional trade – it gives instant, low-cost, global reach to small businesses (which make up the bulk of the New Zealand business community), women entrepreneurs, Maori and regional communities which are otherwise confronted with challenges of distance, scale and cost.
However, technology and disruptive business models are outstripping regulation. Existing global trade rules were agreed when the internet was in its infancy. Many of those rules are not a comfortable fit for the digital age, especially for frontier technologies such as artificial intelligence, cloud computing and blockchain; e-commerce is straining existing infrastructure; and new technologies raise questions around governance, including how to safeguard privacy, consumer protection and cybersecurity in a trade-friendly way. Countries are increasingly imposing restrictions on data flows, sometimes with legitimate objectives, but not always in a way that minimises negative impacts on trade – and sometimes for outright protectionist reasons.
“The new global economic reality is digital. We need to move beyond being merely a cork on the ocean, and instead try to shape the optimal trade environment for Kiwi businesses.”
Governments have turned to a patchwork of trade agreements to regulate aspects of digital trade. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which New Zealand is a founder, represents the high-water mark for trade-friendly rules, at least for the 11 participating countries. But there is also a strong case for coordinated global policymaking in this area – particularly in this modern world of global value chains Fragmented and overly-restrictive approaches risk creating a complex new regulatory “digital noodle bowl” for business.
Catching the wave: new negotiations towards international rules underway
It is accordingly very positive that New Zealand is taking part in two negotiations just getting underway to try to develop optimal cross-cutting digital trade rules.
First, New Zealand and 76 other WTO members, representing a sizeable majority of the world’s digital economy players, have launched negotiations this year on the trade-related aspects of e-commerce. A first round of talks took place in March and the second was held last week. There are some very big issues that need to be resolved – notably around cross-border data flows, where some of the largest actors in the digital space, including the US, the EU and China, have pretty divergent approaches, and another (India) has yet to join the negotiations. The process is likely to be a lengthy and challenging one.
More immediately, reflecting New Zealand’s long tradition of nimble, creative and visionary trade policy approaches, Minister of Trade and Economic Growth David Parker, along with his Singaporean and Chilean counterparts over the past weekend announced the launch of three-way negotiations on a new “Digital Economy Partnership Agreement”. The DEPA process will seek to deepen and strengthen cooperation in digital areas, establish new trade rules and identify best practices for the digital age. The outcome could eventually serve as a pathfinder to broader regional or global rules.
The new global economic reality is digital. We need to move beyond being merely a cork on the ocean, and instead try to shape the optimal trade environment for Kiwi businesses. Leveraging the full benefits of the digital age is fundamental to our sustained prosperity. These two new negotiations are accordingly to be warmly welcomed.
This post was prepared by NZIBF Associate Director Stephanie Honey.
REGISTER WITH TRADE WORKS
Register to stay up to date with latest news, as well as saving and discussing articles you’re interested in.
Latest News
“MEAGRE OUTCOME” FROM WTO IN ABU DHABI – BUSINESS FORUM
Media release, 2 March 2024 Despite its overwhelming importance at the heart of the international trade system, members of the World Trade Organisation (WTO) have concluded their Ministerial in Abu Dhabi (“MC13”) with only a meagre outcome. NZ International Business...
To go or woe with the WTO?
We’ve been here before with the World Trade Organisation (WTO). The global trade body’s 13th Ministerial meeting (“MC13”) opens in Abu Dhabi on Monday 26 February, with Trade Minister McClay serving as Vice-Chair. In recent weeks diplomats, trade...
DCANZ – Agricultural Subsidy Distortions Must Be Addressed
23 February 2024 - Media Release by the Dairy Companies Association of New Zealand (DCANZ) As the world’s Trade Ministers head to a WTO meeting in Abu Dhabi, the Dairy Companies Association of New Zealand (DCANZ) is calling for an immediate capping of agricultural...
Asia-Pacific business leaders call for greater economic dynamism with people at the center of the APEC agenda
16 February 2024 - APEC NEWS RELEASE Issued by The APEC Business Advisory Council (ABAC) The APEC Business Advisory Council (ABAC), meeting this week in Kuala Lumpur, Malaysia, expressed deep concerns about the growing pressures of economic fragmentation and the risks...
SUBMISSION TO THE PARLIAMENTARY FOREIGN AFFAIRS, DEFENCE AND TRADE COMMITTEE – FEBRUARY 2024
NEW ZEALAND EUROPEAN UNION FREE TRADE AGREEMENT LEGISLATION AMENDMENT BILL Introduction and Summary This submission is made on behalf of the New Zealand International Business Forum (NZIBF) and Export NZ. NZIBF is a forum of senior business leaders working...
ABAC Statement on WTO MC13 – February 2024
Now, more than ever, the world needs a credible, relevant, and effective multilateral trading system, with the World Trade Organization (WTO) at its core. In this era of global challenges, the APEC Business Advisory Council (ABAC) recognizes that the WTO is...
Global Industry Statement on the WTO Moratorium on Customs Duties on Electronic Transmissions
NZIBF has joined 170 international business associations in calling for an extension to the current moratorium on tariffs applying to digital services (like Netflix) at the forthcoming WTO Ministerial meeting. The undersigned associations urge WTO members to support...
Resilient supply chains: Yesterday, today and tomorrow
Published by the Hinrich Foundation, Singapore, 23 August 2024 By Stephen Jacobi History has much to teach us about the way trade contributes to prosperity through the movement of goods, services, people, and ideas. Today, data can be added to this web of...
SUBMISSION TO THE MINISTRY OF FOREIGN AFFAIRS AND TRADE
GENERAL REVIEW OF THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS- PACIFIC PARTNERSHIP (CPTPP) DECEMBER 2023 Summary This submission is made on behalf of the New Zealand International Business Forum (NZIBF). As individual NZIBF Members may make their own...
Todd McClay – your trade mission, should you choose to accept it …
As published by Newsroom 19 December 2023 By Stephen Jacobi “Twas the week before Christmas, When all through the house Not a creature was stirring, Except busy trade officials … ‘Tis the season to be “BiM-ing”* and the NZ International Business Forum has sent its...
2023 – Steps forward and back
Trade liberalisation moved forward and backward in 2023. Some notable gains have been achieved for New Zealand, but war, geo-political rivalry and global inflation continue to depress global markets. While the pandemic continued to lurk in the shadows, 2023 was the...
NZIBF releases Brief to the Incoming Minister of Trade
DECEMBER 2023...
NZIBF 2023 Chair Report
I am pleased to present my third report on the activities and achievements of the NZ International Business Forum (NZIBF) for 2023-24, our sixteenth year of operations. I am grateful to all Members and to our executive team for your continuing support. As I...
Of APEC, CPTPP and IPEF
While New Zealand was sorting out its new Government, the alphabet soup which is trade got a good stirring in San Francisco. This was APEC Leaders’ week, the annual gathering of Leaders, Ministers, business people and other stakeholders from the 21 economies of...
Remarks to Shanghai Forum: “China and CPTPP – New Zealand Expectations and Advice”
FUNDAN UNIVERSITY, SHANGHAI, 28 OCTOBER 2023 STEPHEN JACOBI, EXECUTIVE DIRECTOR, NEW ZEALAND INTERNATIONAL BUSINESS FORUM 杰珂陛 执行董事 新西兰国际商业论坛 CHINA AND CPTPP – NEW ZEALAND EXPECTATIONS AND ADVICE It is an honour for me to speak in such a distinguished forum. My thanks...