This column is written by Nick Ashton Hart, Geneva representative of the Digital Trade Network, which is supported by USCIB, the International Chamber of Commerce, and the World Information Technology and Services Alliance (WITSA) amongst others. Nick has helped forge new paths forward at the WTO on digital trade rules, and works directly with the 76 WTO Members who have just begun negotiation of a digital trade agreement at the World Trade Organization.
At the December 2017 WTO ministerial in Buenos Aires, 71 countries made a political declaration to begin discussing new global rules to facilitate the expansion of the digital economy beneficial to both developed and developing countries. Thanks to intensive work by those countries in 2018, on January 29, on the margins of the World Economic Forum Annual Meeting in Davos, 76 countries (notably including the US, EU, and China) announced the launch of formal negotiations.
All the major economies, most of the G20, and many smaller states are all taking part, including some of the world’s poorest countries. In total the vast majority of the world’s economy is at the table. Since it is estimated that the digital economy underpins approximately one-third of global GDP – and rising – this is a negotiation that will impact industry everywhere – and people everywhere.
You would think that so important a negotiation would have created a very large increase in the level of engagement by the private sector across the board – in capitals and in Geneva. If you think that, you would be wrong: many delegations are surprised that entire economic sectors are not engaged despite the potential ramifications on their businesses. The Ambassadors of some of the world’s largest economies tell me that their ministry is not hearing from the private sector in the capital, or they are hearing only generalities and not the specifics necessary to create negotiating positions. The intensity of activity by the private sector in Geneva is also not much different now than it was in 2017, or 2016 or 2015. To give you an example of how serious the problem is, almost half of the written submissions to the talks during 2018 reference financial services – yet many Ambassadors say they cannot remember the last time a representative from a bank came to see them.
The private sector’s limited engagement could be explained by the fact that their limited pool of experts are busy elsewhere trying to prevent a trade war or keep their companies out of escalating tariffs. The relative newness of the talks could also explain it. Whatever the reason, for me to hear increasingly frustrated ambassadors across countries at all levels of development asking me ‘where is business and when will they tell us in specific what they need and why’ when a negotiation has already started is, frankly, worrying, especially given that the participating 76 states have agreed to table proposals by mid-April of this year with the objective of having a draft agreement by the end of July. While in my view that timeline is likely to slip, clearly time is of the essence.
WTO delegations are looking at some of the world’s most important economic questions, such as:
- What can trade policy do to help narrow the “digital divide” (connecting the half of humanity not yet online)
- Will data flows be protected from trade distorting interference – interference which is presently growing globally – and how will the need to ensure other public policy priorities like the protection of personal information be factored in?
- Should the moratorium on applying customs duties to digital goods be made permanent?
- How can trade rules help the spread of mobile financial services to close the financial inclusion gap? (almost two billion people do not have access to financial services)
- What can trade policy do to foster consumer and business trust in purchasing goods and services across borders?
- How can trade rules promote use of digital contracts, adoption of digital signatures and customs and logistics processes, and make trade finance easier to get and use, all to help SMEs trade more?
The trade policy community needs and deserves the best advice both in Geneva and in national capitals as they work to answer these big questions. The answers could profoundly benefit not just commerce but everyone. But as I have so often heard from delegations – and I have often said it myself – if countries don’t understand what’s in it for their economies in adopting new rules to promote digital trade, they won’t. The private sector has a critical role to play in making that case. So far, frankly, it is failing to do that effectively enough.
Meanwhile non-governmental organisations that are skeptical, or opposed, to any new rules for the digital economy are both well-organised and very active in Geneva and international capitals. This statement will be released on April 1, signed by a very large number of NGOs, on the first day of the biggest digital-trade event of the year in Geneva, UNCTAD’s Ecommerce Week. You can find a large collection of NGOs have been active for many years on-the-ground and there are several people employed in Geneva just on trade policy advocacy generally opposed to any new trade rules related to the digital economy. Meanwhile, the only dedicated industry person in Geneva on digital trade is myself.
Opportunities like these negotiations don’t come by very often in international affairs: time is short. The private sector has been asking for new rules for online trade for years. Now is the time for it to make clear what it needs and why in enough detail and invest in helping countries at all levels of development understand why it matters to them … or watch the opportunity slip away.
Nick Ashton-Hart is the Geneva representative of the Digital Trade Network.
You can follow him at @nashtonhart.
An earlier version of this column appeared on the Council of Foreign Relations website at: