JETRO Topics
International symposium: “International Trade Rules in the Digital Age – Challenges and Prospects”
February 2017
METI and JETRO co-organized an international symposium titled “International Trade Rules in the Digital Age – Challenges and Prospects.” Experts on the front line of the concerned topic from both academia and think tanks, as well as private business practitioners, were invited to discuss topics such as the current status of various countries' regulatory policies and their impact on businesses, the relationship with existing trade rules such as those of the WTO and challenges in the rule-making of the flow of data.
Opening remarks by JETRO President Akahoshi
Scene of symposium
Scene of symposium
Topics and main hypotheses discussed during symposium
The nature and impact of data
- Data is similar to natural resources in the sense that it may generate value. However, it can be easily shared among different users across borders.
- 80% of all the information available is unstructured, compiled and systemized into databases. However, new technologies, such as cognitive computing, make it possible to utilize such unstructured information.
- Beneficiaries of free flow of data are not exclusively in developed countries but also developing countries for given their service exports, outsourcing business or the participation in global trade using digital platforms.
- There are various digital and infrastructure layers that are needed to maximize opportunities of the internet and cross-border data flows for digital trade. These include all layers of potential restrictions, such as investment, content, service provision, network and product manufacturing.
Trends on data localization and other restrictions of data flows
- The number of cross-border data flow and data storage restrictions is growing. Data flow restrictions are likely to have a greater impact on industries which rely heavily on exports or which are highly integrated in GVCs, and could have spill-over effects on neighbouring countries. Storage restrictions may benefit the data industry but will mean a loss in competitiveness of other sectors relying on data industry inputs. Net effect is likely to be negative.
- Restricting data usage has a direct negative impact on businesses by reducing competitiveness of domestic industries, disabling future business models and causing uncertainties for trade.
- Not just regulations and policies, but also the mindset of people affects usage of data utilization in new industries or emerging economies. Also the ideas from the sharing economy can be applied to all dimensions of existing business processes, such as supply chain management.
- Data localization requirements by raising the costs of digital services, such as cloud computing, have a bigger negative impact on SMEs, potentially more so than multinationals.
The balance between legitimate policy objectives and protectionism
- As every country has its own history, political priorities and context, there will be no one size fits all solution on rules to govern data. However, sharing best practice between governments and business and civil society participation in regulatory process can help avoid regulation that unnecessarily restricts cross-border data flows.
- Businesses will need to play a key role in advocating for and supporting a better digital trading environment.
- Raising awareness and educating policy makers are necessary for better policy making.
- New digital trade rules should build on and compliment, or not rollback from existing commitments, such as those under the GATS.
Appropriate fora for discussion
- Initiative for digital trade should be encouraged in multilateral, plurilateral, regional and bilateral trade fora.
- Existing like-minded trade groups (e.g. G7, G20, APEC, TiSA) may not be adequate starting points for advocating digital trade policy solutions
- Necessity of global rule-making on digital trade should be highlighted. Considering the global nature of the digital economy, a multilateral approach may be preferable.
- Private-Public dialogue and inter-ministry/agency communication are necessary at a domestic level for ambitious commitments on digital trade rules, and to minimize exceptions from those commitments.
- Dialogue within various institutes including OECD, APEC and UNCTAD is necessary.
Individual Governmental action
- It should be in the interest of every government, regardless of the development stage of their economy, to establish a digitalization strategy even if some countries may have expressed less interest on such issues.
- A holistic view and analysis on digital issues may work well. The ongoing initiative of the EU Digital Single Market Strategy may give us evidence in this regard.
- Horizontal regulatory issues, such as IP, competition, or privacy, are of great importance on digitalization.
Trade negotiations
- In WTO, the following elements/approaches should be pursued.
- Negotiation of “WTO plus” rules and commitments to cover data
- Expanding the WTO Reference paper on Basic Telecoms on free flow of data
- A digital version of WTO Trade Facilitation Agreement
- Transparency on data-related measures through TPRM
- However, the WTO is “offline” and its work is progressing slowly. FTAs/RTAs, such as TPP, Japan-EU, TiSA, TTIP, RCEP, might be better suited in the short term for pursuing consensus and plays an increased role for future rule-making.
- TPP provisions on digital trade provide the best regulatory model so far. But even here more can be done.
Other aspects on cooperation
- A comprehensive package of rules covering both developed and developing economies is necessary.
- All stakeholders should be engaged and consulted in the development of digital rules.
- Further studies within a multi-stakeholder setting are needed to prioritize amongst various issues to be addressed in the coming set of rules. The need for continuous dialogue was recognized.
- Common standard setting on cross-border data-sharing might be necessary.
Outline
| Date | February 27 (Mon), 2017 |
|---|---|
| Time | 13:00 – 16:50 |
| Venue | Toshi Center Hotel Tokyo (2-4-1 Hirakawa-cho, Chiyoda-ku, Tokyo) |
| Capacity | 200 people |
| Admission | Free |
| Language | Japanese/English (simultaneous translation) |
| Co-sponsors | METI, JETRO |
| Program |
12:30 – 13:00
13:00 – 13:05
13:05 – 14:50
14:50 – 15:05
15:05 – 16:50
|
