Geneva Trade Week – 29 September 2020

On 29 September, 2020 The Jean Monnet Network – Trade & Investment in Services Associates (TIISA) organised Session 9 in the Digital Trade stream. Moderated by Jane Drake-Brockman, IIT, speakers were Hildegunn Kyvik-Nordas NUPI and Orebro University, Pascal Kerneis, European Services Forum, Bryan Mercurio, Chinese University of Hong Kong and Neha Mishra, National University of Singapore.

Clearly neither domestic policy settings nor the rules-based trading system have kept up with the global digital transformation underway. Presentations therefore highlighted critical issues on how policymakers and regulators can encourage both competition and innovation by facilitating trade in digitalised services and free flow of data.

Discussion focussed on exploring the opportunities from getting the regulatory regimes for digital trade right and the dangers in getting them wrong.

Focussing on telecommunications, Hildegunn Nordas observed that digital markets are susceptible to competition problems and may need help from regulators. But regulation sometimes interferes with innovation. Best practice regulation will depend on both technology and on market structure so a one size approach will not fit all. She concluded the WTO will need to work with other organisations such as the ITU and WIPO to establish a governance framework for e-commerce.

Focussing on the need for an outcome in the JSI on E Commerce in the WTO, Pascal Kerneis drew on recent FTA experience on the part of many of the major players in the JSI to suggest that compromises should be able to be found in order to deliver a set of WTO rules on E Commerce, covering the key issues around digital trust, regulatory disciplines on digitally-enabled services, customs duties on electronic transactions, handling of “digital products”, protection of Intellectual property and cross-border data flows.

Bryan Mercurio stressed the need for good regulatory governance to start at home and the implications for regional and international regulatory cooperation. Drawing on examples from Hong Kong, he explored the domestic imperatives of establishing regulatory regimes to facilitate digital transformation, enabling opportunities that come from the cross-border flow of data while minimising negative externalities. Given the reality that numerous WTO members are still developing their regulations and policies, and given the differing approaches already being codified in FTAs on the part of eg United States, European Union and China, doubts arise on the extent to which international efforts can lead in norm setting – or are more likely to be successful in codifying existing practices and common norms.

Neha Mishra covered the interface between trade law and cybersecurity. She argued that trade and cybersecurity can share a symbiotic relationship but when countries impose restrictive unilateral cybersecurity laws, regulations, policies, the economic costs to digital trade are very high. Trade Agreements do have an impact on cybersecurity regulatory frameworks, including to check protectionism. She called for more international regulatory cooperation in trade institutions, eg on interoperability of data regulations and encouraging transparent, open, globally competitive and market-driven cybersecurity standards and best practices.

Some concern was expressed during the discussion about the exceptions clauses being negotiated at bilateral level, for multiple public policy reasons, including national security, simultaneous with new disciplines to facilitate cross-border data flows. The panelists agreed on the urgent need for more intensive efforts in the WTO negotiations.

Watch Session 9 in the video below