Digital trade deal advances but US still not on board

GENEVA: Efforts to draw up global digital trade rules advanced Friday when dozens of nations wrapped up negotiations with a draft text, but more talks will likely be necessary as the United States and several other countries are still not on board.

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.

European trade chief Valdis Dombrovskis hailed the text as ‘historic’, writing on social network X that countries had “negotiated the first global rules on digital trade”.“This will facilitate e-transactions, boost innovation, and integrate developing countries into the digital economy,” he said.

Once in place, the deal “will make trade faster, cheaper, fairer and more secure”, Britain said in a statement.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”, said British Trade Secretary Jonathan Reynolds.Finalising the negotiations “is a huge step forward in correcting that and ensuring British businesses feel the benefit”.

‘Falls short’

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

Australia, Japan and Singapore, which have jointly been leading the Initiative on Electronic Commerce talks, presented a joint statement during a closed-door meeting at the WTO confirming that “after five years of negotiations, participants had achieved a stabilised text”.But actual implementation of a deal could still be years off.

A small number of negotiating countries have yet to sign on, including the United States, Brazil, Indonesia and Turkey, the declaration said.“The text released today ... represents an important step forward for the WTO in a sector of growing importance to the global economy,” US ambassador and Deputy US Trade Representative Maria Pagan said in a statement.

But the United States considers that “the current text falls short and more work is needed”, she said, pointing in particular to an “essential security exception”.The co-conveners of the talks have in recent months stressed the importance of landing a deal, stressing it could 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 Tan Hung Seng 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.

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 1998, and has been extended at each WTO ministerial meeting since. It is currently set to expire in 2026.