Digital Trade Agreement: WTO Joint Initiative on Electronic Commerce

Jonathan Reynolds Excerpts

Friday 26th July 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

The Government are ready to lead on the global stage and use every lever at our disposal to tear down unnecessary barriers and give British businesses the access to international markets to achieve economic growth. We are committed to establishing a global trading system fit for the modern era and underpinned by digital technologies to ensure trade is as seamless and efficient as possible.

Today, I am delighted to announce the UK has joined the first global digital trade agreement: the joint initiative on electronic commerce, negotiated with 90 other countries at the World Trade Organisation.

The economy-wide agreement, covering trade in goods, services and information, is set to deliver new growth opportunities for the UK, with global digital trade already worth £4 trillion and growing strongly. The JI will deliver new growth opportunities for the UK economy and our businesses, workers and consumers, and recognises the importance of supporting developing and least-developed countries to deliver growth and prosperity for all.

Global trade is becoming increasingly digital, and harnessing its potential is central to growing a strong and resilient economy in the UK. The UK is at the forefront of digital trade and has a comparative advantage in digitally-delivered services such as finance, professional business services, creative industries, engineering and much more. UK trade is driven by digitally-enabled businesses, with exports of digitally-delivered services amounting to £252 billion in 2021, or 77% of total UK services exports.

However, until now there has been no common set of global digital trade rules. The G7 digital trade principles brokered under the UK G7 presidency in 2021 set out shared commitments of G7 countries, but there was no rulebook covering binding commitments for the world. This has led to fragmented approaches to digital trade regulation, resulting in increased barriers for businesses, workers and consumers.

As a comprehensive, economy-wide agreement, the JI will boost global trade in goods, services and information and unlock a wide range of benefits for UK businesses, workers and consumers. Global adoption of digital customs systems, processes and documents, even with partial uptake, could represent a boost to UK GDP. Improvement in trade facilitation can increase the probability of a small business starting to export by up to 3% and increase the value of small business exports. Protection for workers and consumers online will increase their trust and confidence in digital trade.

Key benefits of this agreement include:

Cheaper, faster and more secure trade for businesses trading goods and services around the world through digitalising interoperable customs systems, processes and documents. This will in many cases end the need to print off forms and hand them over at customs, a slow, expensive and old-fashioned way of working.

Recognition of electronic contracts, invoices, signatures and authentication, and facilitation of secure, trustworthy electronic payments.

Permanent ban on customs duties on digital content among JI participants to provide the certainty businesses need to trade openly in the new global digital economy and avoid the price increases the introduction of such tariffs would cause.

Protection of personal data of workers and consumers in line with the UK’s high data protection standards.

Protection of consumers buying goods and services online from online fraudsters, misleading claims about products and deception.

Facilitating competition in the telecoms sector through financial independence of telecoms regulators and improved access to telecoms infrastructure.

I expect the process to incorporate the JI into the WTO legal framework to commence shortly. Once incorporated, the JI will be laid before Parliament, in line with usual practice, for domestic ratification.

The Government are committed to rebuilding and strengthening global partnerships and standing up for the rules-based international order. This agreement is an important step in modernising the global trade rule book and furthering co-operation in the WTO.

[HCWS23]