What is Digital Trade?

The phrase “digital trade” refers to the provision of goods and services using telecommunications or other information and communication technologies. Often, the term is used interchangeably with “e-commerce”.

Thus, digital trade can encompass a wide variety of online activities – from purchasing a physical or e-book online or signing up for a streaming subscription, to the cross border transfers of data required across multiple global industries.

“The digital transformation has reduced the costs of engaging in international trade, facilitated the co-ordination of global value chains (GVCs), helped diffuse ideas and technologies, and connected a greater number of businesses and consumers globally.

But even though it has never been easier to engage in international trade, the adoption of new business models has given rise to more complex international trade transactions and policy issues.”

– OECD, 2023

As more and more sectors of the economy go online, digital trade is emerging as a vital area of interest, with many governments implementing specific digital trade agendas that aim to promote growth of the ecommerce ecosystem, promote growth of local businesses, and enhance access to information.

As of 2020, digital trade represented 25% of all global trade, amounting to just under USD 5 trillion. Digital trade related issues are also increasingly a part of multilateral, regional and bilateral trade agreements between countries.

What’s on the international digital trade agenda?

Digital trade chapters in many recently signed trade agreements include provisions on issues such as:

Regulating cross-border data flows

Data protection and privacy

E-authentication and e-signatures

Recognition of digital/electronic identities

Regulation of AI and source code of software

Nondiscrimination between domestic and foreign digital goods and services

Platform regulation

Online consumer protection and grievance redress

Spam regulation and cybersecurity

Open government data

Cryptography

Trade rules take the form of binding international obligations entered into between countries. For instance, the General Agreement on Trade in Tariffs (GATT) is a multilateral agreement aimed at promoting international trade through the reduction of tariffs and other trade barriers.

Other more recent trade agreements include the US-Mexico-Canada Free Trade Agreement (USMCA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), etc. Each such agreement may have different methods of enforcement, including through arbitral tribunals.

As the digital economy increasingly becomes a subject of regulation across the world, trade agreements have become fertile ground for large technology companies to lobby for favorable provisions that limit the manner in which signatory countries can regulate them.

What’s the problem with the current digital trade ecosystem? Why do we do what we do?

As the internet has grown to encompass nearly all aspects of economic and social life around the world, a small number of companies (Big Tech) have emerged as the dominant entities in the global digital system, shaping how content is circulated, services are provided, and infrastructures are designed.

Limited domestic and global regulation has allowed Big Tech to enjoy broad and unfettered freedom to design, implement, and exploit e-commerce and digital technologies. While new digital products and systems have brought important benefits to people across the planet, the lack of oversight and regulation has enabled Big Tech to invade people’s privacy, design and deploy a system of mass corporate surveillance, leverage its economic might to diminish competitors, discriminate (often unintentionally) against vulnerable populations, and concentrate enormous political and economic power.

As public opinion continues to grow skeptical of the dominant position of the tech companies, regulators around the world are contemplating and starting to impose tighter rules and regulations on Big Tech. In response, Big Tech is seeking ways to neutralize this regulatory push, including via trade agreements that constrain individual jurisdictions from crafting and experimenting with policies and regulations that aim to curb Big Tech’s abuses, concentration of power and worsening of inequality.

The Digital Trade Alliance aims to shift the power balance in trade negotiations away from industry lobbyists, so that harmful rules on digital trade are removed from trade agreements. We aim to create a path for transformative change in international trade rulemaking to advance digital rights.

What are some of the critical issues in digital trade, and how do they affect your rights?

Some of the more controversial provisions included in certain new digital trade agreements (such as the US-Mexico-Canada Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) include:

Provisions restricting access to source code →
These provisions limit the ability of governments, regulators, and independent experts to audit algorithms used in software, before a software-based product is launched into the market. Given the growing importance of software in our lives, and the growth of the AI ecosystem in particular, this can significantly reduce the accountability and transparency of automated decision making. Learn more.

Provisions mandating unregulated and unrestricted cross-border flows of data →
These provisions can affect citizen’s rights to privacy and data protection by allowing corporations to transfer data to foreign countries where privacy standards may be lower or where individuals may find it difficult to exercise their privacy rights. Regulations on cross-border data flows can also be implemented to enhance administrative efficiency and improve domestic law enforcement by ensuring that foreign corporations comply with a variety of domestic regulations, including by making it easier for regulators and authorities to carry out their supervisory and enforcement functions. Some countries also use such measures to promote strategic and economic ends such as enhancing domestic digital infrastructure capacity or to enhance competition in the digital economy. Learn more.

Is there a positive agenda for international digital trade?

The digital ecosystem ought to be regulated in the interests of the general public - users and consumers of digital goods and services around the world - and not just the interests of big technology corporations.

While economic development and growth, frequently cited as reasons for deregulation, are certainly vital towards societal well-being, these objectives should not come at a cost to other equally critical values, importantly, the protection of fundamental human rights.

International trade negotiations can play a vital role in ensuring that fundamental rights such as that of privacy and data protection are better protected the world over. Countries around the world should be working towards developing and implementing public interest regulation to ensure the safety and security of AI systems, protect the rights of gig and other workers connected to the tech sector, foster competition in the digital economy and enable greater consumer protection.

Ensuring a fairer distribution of the benefits of the digital economy should also be a critical component of the global digital trade agenda. These, amongst other measures, can enhance trust in the digital economy and ensure that the benefits of digital technologies are accessible to all.

Why should you get involved?

Technology is changing the way virtually every part of our economies and societies function. This makes it important for civil society groups to actively participate in the technology policy space.

While many traditional rights protection and other civil society organizations are increasingly involved in this domain due to its cross-sectoral effects, the linkages of technology policy with trade policy are less well understood.

Trade policy has a significant effect on how domestic regulatory policy can be framed. For instance, provisions in many trade agreements restrict the ability of governments and regulators to implement public interest regulation. Pushing back on such provisions is necessary to preserve the space for domestic policy making, particularly in sectors where regulatory models are yet to be fully developed.

In addition, trade discussions and negotiations are often dominated by the interests of big corporations. Involvement of public interest and civil rights groups in trade policy discussions becomes essential to ensure that people’s rights can be adequately promoted and protected in the international and domestic arenas.

My organization does not have expertise in trade law, can we still be a part of the Digital Trade Alliance?

Yes, you can!

We welcome into the Alliance all groups that align with our aims and objectives (i.e., to promote consumer and people’s interest and rights in the digital ecosystem).

Pushing back against the dominance of big tech requires concerted and global action, so we welcome groups from all over the world to join, regardless of your current involvement in the international trade space.

The Digital Trade Alliance will:

Help you learn more about how the international trade agenda can influence domestic regulatory policy

Provide you compelling insights into negotiations and trade talks

Enable access to quality resources on digital rights and trade related issues

Enable access to experts on a host of issues ranging from anti-trust to data protection to labour rights

Allow you to learn from the policy interventions and expertise of other members in different regions of the world

Provide you exposure to, and help you organize events and learning sessions on critical digital economy and society related issues

We also want to learn from you!

We want to learn about pressing digital rights and social justice related issues that your organization deals with, and how different countries and regions are seeking to regulate the digital ecosystem. This helps us in advocating for fairer and more equitable digital related policies at an international level.

Big tech has a global footprint, massive resources and an internationally coherent lobbying agenda - we need all the help we can get in pushing back against the policies they promote in their own self-interest.

If you:
• Would like to learn more about the Digital Trade Alliance
• Want more information on international trade and digital rights related issues, or
• Would like to solicit our participation in an event, or
• Have a press inquiry

Please drop us a line at: digitradeally@citizen.org.