IGF 2021 Launch / Award Event #62 Mapping and measuring digital trade integration

The new trade issues arising from digital trade are being addressed today either unilaterally or in trade agreements, but very little has been done at the multilateral level with the WTO. Since the internet is one, more effort should be put to address new issues in the multilateral context.  A major barrier to analyse digital trade policies is the lack of comprehensive and updated analysis and indicators of policies and practices that restrict trade. In the absence of quality analysis and indicators, governments and stakeholders tend to misconstrue their national capabilities in trade and also face great uncertainty as to how to solve the issues, thus impeding the collective governance aspects. New ideas and information are crucial to clarify the thinking of the actors and map paths forward in digital trade. The expertise, credibility and independence of the digital trade actors advancing these efforts are key to the reception of the novel messages.

There are several initiatives that are aiming at bringing transparency to digital trade. Here the most relevant:

• The Digital Policy Alert (https://www.globaltradealert.org/digital_policy) was formulated to address the risk of fragmentation on the Internet by tracking policies restricting digital trade. Consumers in the small markets may also lose out on the benefits that the internet promises as a borderless area for exchanging ideas and commerce. The Digital Policy Alert created a timely public inventory for policy and regulation and is made available through two tools: Activity Tracker and Detailed Policy Mapping. The DPA has tracked more than 700+ policy and regulatory activities in 2021 alone in the G20 countries. The EU and USA contribute with a significant amount of activities. Data Governance, Competition, Content moderation, Operating Conditions and Taxation are the current areas of policy and regulatory activity showing the most activity.
• The Digital and sustainable Regional Integration Index (DigiSRII) by UN-ESCAP (https://www.unescap.org/resources/DigiSRII): UN-ESCAP has collaborated with the European University Institute and OECD to collect data for building tools to support policy makers. One of these tools is the Digital and sustainable Regional Integration Index (DigiSRII), which looks into many parameters which includes Trade and investment, Finance, and also the critical pointers like the Digital Economy through Conventional Integration part (Trade and regulation, Infrastructure) and Sustainable integration part (Inclusive, Cyber security). Openness and Harmonization in Regional Digital-trade Regulation allow interoperability and pave the way for more integration at the regional level. The result of the analysis shows that most countries have modest performance in terms of the component which takes into account sustainability, especially when it comes to least developed countries, which are not only behind in infrastructure but also in terms of regulations. These countries also find it difficult to attract FDI which could bring them capital or technology they lack to close the gap. Evidence from these initiatives can be used to build capacity for policy makers and to support their reforms of the policy.
• Digital Trade Restrictive Index for Africa by UN-ECA: The main objective of the new project by UN-ECA is to assess the readiness of African countries to effectively engage in digital trade and e-commerce. The initiative started during the first part of negotiation of the African Continental Free Trade Area (AFCFTA) and allowed to give some indications and policy recommendations to negotiators. Data is collected at national level in two separate datasets. Firstly, UN-ECA is assisting member states to expand the coverage of African countries in OECD Digital Trade Restrictive Index, secondly UN-ECA is supporting the collection of data for the Regional Digital Trade Integration Index. The data collected is used to calculate the restrictiveness index of 28 African countries. Preliminary results show that African countries are relatively integrated in terms of digital trade, but the countries that were covered lacked legislative frameworks in core digital areas that could affect digital trade. It is important to have harmonized rules and regulations across Africa, especially on cross-border transfer of data. Consumer protection regulation also helps to increase the confidence in the digital trade environment in Africa.
• The Digital Trade Integration (DTI) project by the European University Institute (https://globalgovernanceprogramme.eui.eu/digital-trade-integration/): The project has just started, but it is building on the work done by ECIPE with the Digital Trade Restrictiveness Index, which now has been discontinued. It was the first initiative to map the measures affecting digital trade across 64 countries. The results showed that China, Russia, and India were the main countries imposing top restrictions while Norway, Iceland, and New Zealand were imposing the least restrictions. The new project, which brings together the EUI, LSE, Hertie School, Bocconi, UN-ECA, UN-ESCAP, UN-ECLAC, TIISA and ECIPE, is justified by the fact that there is a need to provide more transparency and understanding on the type of measures which affect digital trade. By collecting high quality data, it is possible to conduct empirical research and identify best practices. The project covers 90 countries and the datasets and index will be released in 2022.

Among the concluding remarks, it was highlighted that there is a need for aggregated data to be able to create indices. These will help to spot issues of particular interest and that require most action. Having a multi-stakeholder discussion on this topic is very important.  ESCAP has used the data collected in its research to prepare recommendations for the Philippines government, which proved to be a great pilot country for similar initiatives.