Reality Check: The lack of consensus on new trade rules to govern the digital economy

Abstract

This article makes three arguments. First, that beyond a very narrow set of largely uncontroversial disciplines on domestic legislative reforms to facilitate or promote e-commerce and cooperate in this area, it has proven and will likely continue to prove extremely difficult to establish anything but the most superficial consensus with respect to meaningful new trade rules to govern the digital economy. Second, it argues that with respect to a second set of rules that seek to establish genuine and enforceable constraints to governments’ ability to effect harmful regulatory interventions in the digital economy, the textual outcomes that have emerged so far in trade agreements such as the CPTPP are so riddled with broadly formulated exceptions and carve-outs, that there is little prospect for business to obtain the predictability and certainty that these new rules should ideally promise. Finally, this article argues that a set of exogenous factors has conspired to make the need to establish consensus on new trade rules to govern the digital economy more urgent but also infinitely more difficult, including but not limited to a backlash against technology the rise in income inequality in advanced industrialized countries, a resurgence in protectionism, and an America no longer willing to show constructive leadership that threatens to permanently cripple the rules based multilateral trading system. Digital trade, e-commerce, consensus, WTO, CPTPP, protectionism, backlash, big-tech, US-China, trade war