Dozens of nations tie up 'groundbreaking' digital trade deal talks: Britain

The talks were launched in 2019, with the negotiating countries representing 90 percent of the WTO membership. Britain says once in place, the deal "will make trade faster, cheaper, fairer and more secure".

The ratio of e-commerce volume to general trade volume posted a significant hike in recent years, from 10.1 percent in 2019 to 20.3 percent in 2023. / Photo: AA Archive
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The ratio of e-commerce volume to general trade volume posted a significant hike in recent years, from 10.1 percent in 2019 to 20.3 percent in 2023. / Photo: AA Archive

Dozens of countries have finalised years of negotiations towards a "groundbreaking" agreement drawing up global digital trade rules, Britain said.

Protections for online consumers, digitalisation of customs procedures and recognition of electronic signatures figure among the measures laid out in the text aimed at promoting and facilitating digital transactions.

Once in place, the deal "will make trade faster, cheaper, fairer and more secure", Britain said in a statement on Friday.

Digital commerce is growing far faster than its traditional counterpart.

The OECD group of economically developed nations says it estimated that in 2020, e-commerce already made up a quarter of global trade, making it worth just under $5 trillion.

Despite its growing importance, "no common set of global rules exist", British Trade Secretary Jonathan Reynolds said in the statement.

Finalising the negotiations "is a huge step forward in correcting that and ensuring British businesses feel the benefit", he said.

The talks were launched in 2019, with the negotiating countries representing 90 percent of the WTO membership, including heavy-hitters like the United States, the European Union and China.

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'Work in progress'

The final text is to be presented Friday during a closed-door meeting at the WTO headquarters in Geneva.

It remained unclear if all the negotiating countries had signed onto the final agreement and how long it would take to implement.

"From our perspective, the text is still a work in progress," US Ambassador and Deputy US Trade Representative Maria Pagan told reporters Thursday.

"We have a variety of issues that from our perspective are still outstanding," she said, pointing for instance to exceptions around privacy and security.

Australia, Japan and Singapore, which have been leading the talks, have said the aim is to facilitate electronic transactions, promote digital trade and foster an open and trusted digital economy.

"This would be the first-ever set of baseline digital trade rules," Singapore's ambassador to the WTO Hung Seng Tan said in April.

"It would contribute to the growing e-commerce in our countries by providing greater legal predictability and certainty, against the backdrop of increasing regulatory fragmentation," he said.

In Friday's statement, UK Science Secretary Peter Kyle said the agreement aimed "to help people use technology safely by protecting them from fraud, while driving economic growth through the digitalisation of trade so it's faster and more secure".

WTO consensus needed

The agreement also includes a component providing preferential treatment to developing countries.

The British statement said the deal could swell the UK's gross domestic product by up to 24.2 billion pounds ($31.2 billion), compared to its 2023 GDP.

"Even partial adoption could represent a significant boost to UK GDP," it said.

In addition to paving the way for digitalising customs documents and processes, the text also seeks to make permanent a long-held moratorium exempting electronic transactions from customs duties.

The moratorium has been in place since 1988, and has been extended at each WTO ministerial meeting since. It is currently set to expire in 2026.

"Once in force the agreement will permanently ban customs duties on digital content," the British statement said.

The aim is to incorporate the agreement into the WTO legal framework, but that would require consensus backing from all members, including those not part of the deal.

That could be tricky at a time when countries like India and South Africa are balking at what they see as a proliferation of plurilateral agreements within the WTO rather than the all-but-impossible multilateral deals backed by all members.

One solution, observers say, could be for the signatories to move the agreement to another international body. But if they do that, they would not be able to rely on the WTO's mechanism for resolving trade disputes.

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