Reality Check: The Limits of Digital Trade Rules

As digital trade chapters became a standard feature of new trade agreements, there was considerable enthusiasm about their potential to bring greater certainty to the digital economy. In this article, published in the Journal of World Trade in 2020, I questioned how much of that enthusiasm the treaty language actually justified.

My argument was that governments could agree fairly easily on measures such as electronic signatures, online consumer protection and cooperation. Agreement became much harder when the rules sought to impose meaningful constraints on regulation, particularly over cross-border data flows, data localisation and access to source code. Even apparently ambitious commitments came with exceptions and exclusions that weakened the predictability they were supposed to provide.

I also examined the political forces making consensus more difficult, from growing distrust of large technology companies to protectionism and US–China tensions. I argued for clearer disciplines, drawing on established principles of non-discrimination, technological neutrality and avoiding unnecessary restrictions on trade. The question was whether governments were prepared to accept meaningful limits on their own interventions—and back those limits with effective dispute settlement.

Read the paper

Reality Check: The Lack of Consensus on New Trade Rules to Govern the Digital Economy, Simon Lacey. Journal of World Trade, volume 54, issue 2, 2020.

Download the paper (PDF) · Journal publication

Listing photograph: Getty Images / Unsplash+; world map courtesy of NASA.