Digital trade has soared to prominence and with it comes the need to negotiate new rules for this wildly different market.
It’s estimated the digital economy accounted for 22.5 percent of worldwide GDP last year, and with significant challenges facing international travel for both people and goods, this is set only to grow. Fortunately, it seems like the UK is likewise ramping up its digital policy. At the end of last year, we saw some significant moves being made to set 2022 up to be the year of the digital trade deal.
In December 2021, the UK signed its first “from scratch” post-Brexit trade agreement with Australia, containing extensive digital economy provisions, and secured an agreement in principle with Singapore focusing entirely on digital trade.
Beyond these deals, September saw the release of the UK’s five-point plan for the future of digital trade, and in November 2021 the UK published its board of trade report on digital trade. The G7 countries put forward their own digital trade principles in October.
As the UK continues to amend current deals and draft new ones it will be essential that digital elements remain cutting edge.
An entire chapter of the agreement with Australia is devoted to digital trade, and the commitments tend to fall into two broad categories.
The first is the liberalisation of digital trade, making it easier and quicker. This involves things like reducing localisation measures that make it difficult to roll out products and services across multiple locations, and removing barriers such as paper-based administration documents.
The second is improving and streamlining safety and privacy measures, so often a concern in digital transactions. This applies to both consumers and businesses alike, such as protecting personal data and reducing spam, but also measures to protect and foster innovation by preventing forced technology transfers.
Additionally, the deal promises to improve accessibility of public use data for research and to prioritise continued cooperation on emerging technologies and digital issues as they arise.
In what is being described as the “world’s most comprehensive digital trade deal”, the aim of the Singapore deal is to provide new rules for a new type of economy.
The deal seeks to reduce costs and bureaucracy for digital trade between the two countries, which should lead to significant benefits given a third of the UK’s exports to Singapore are delivered digitally.
As well as general streamlining of trade processes such as reducing the need for physical paperwork, and improving cybersecurity, data storage and industry development are the main targets. UK companies should no longer need to pay for expensive data storage in Singapore and the measures combined should promote and accelerate technological innovation in the rapidly expanding digital services sector.
Aside from these two landmark deals, digital also featured heavily in trade agreements with Japan and New Zealand over the past year.
Beyond their individual merits the UK government hopes that combined these deals will put the country in the strongest possible position to trade with technologically advanced and rapidly advancing markets in Asia, and to potentially join The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The government is currently in trade negotiations with the US, and is preparing for negotiations with Canada, Mexico, India and the Gulf states, all of which are likely going to see digital trade play a key role. Continuing to take a firm stance on the importance of removing barriers to digital trade, harmonising practises and promoting innovation will be essential in making the most of the UK’s comparative advantage in a booming technological sector.
The successes of the past few months are a great sign, but with technology moving at a breakneck pace, the importance of digital trade cannot be overestimated in 2022.