The global economy has experienced a rapid growth in digitally facilitated and delivered trade in goods and services. The Government has adopted a “consciously broad” definition of digital trade to reflect this trend. While we understand that trade is increasingly digital, such breadth may be an obstacle to identifying areas for improvement. We suggest that the Government’s forthcoming trade strategy is an opportunity further to develop a targeted approach to the subject.
We recognise that many of the policy areas relating to digital trade are new and rapidly developing at both a domestic and international level. We therefore welcome government efforts to establish international cooperation and agreements that may be multilateral, plurilateral, and bilateral in nature, provided these demonstrate a consistency of approach. We particularly welcome efforts on the Joint Statement Initiative on E-Commerce at the WTO, and encourage the Government to pursue further such plurilateral initiatives to develop common rules and approaches to digital trade, while noting the challenges facing the implementation of this agreement.
Central to the digital economy are data flows. We note, however, the lack of international consensus on how best to approach the regulation of personal data, without unduly restricting data flows. We suggest that the UK works to support digital trade to the greatest extent possible. Currently, we see this as best achieved via alignment with our largest partner on data regulation, the European Union, provided this does not unduly restrict data flows elsewhere. We draw attention to the pending European Commission decision in respect of the UK’s data adequacy, due in June 2025, and strongly recommend the Government work closely with the Commission to secure a positive outcome. Furthermore, as recently advocated by the European Affairs Committee in this House, the Government should ensure that the UK’s approach to data regulation remains consistent with CJEU case law, in order to minimise the risks of challenge to such an adequacy decision.
Relying on a wide network of unilateral, bilateral and plurilateral arrangements governing data flows and other forms of digital trade is clearly a risk to the goal of achieving a stable and certain business environment. We consider it important that the UK continue to work with international partners on data and digital trade to avoid regulatory fragmentation on a range of issues from digitising trade documents, to regulating personal data or new emerging technologies.
There is a domestic challenge in balancing the UK’s public policy space with commitments in existing trade agreements. One issue that has been raised in particular is the ban on government mandated source code disclosure, which we believe needs to be discussed with stakeholders to ensure the right balance is struck. We received reports of inadequate Government consultation with non-industry stakeholders on digital trade matters. We stress, particularly in view of the public interest in emerging technologies and data privacy, that there is a clear case for ensuring broad stakeholder engagement to support a social consensus around the Government’s approach to digital trade in all its forms, particularly if this is to bound by treaty.
Our report also considers the merits of harnessing digital tools to support trade facilitation and notes recent advancements in this area, for example via DATA AnD DIGITAL TRADE 3 trade corridors and the Electronic Trade Documents Act. We encourage the Government to continue to support efforts to ease trade processes, though note the associated costs—as evidenced in the recent pause of the Single Trade Window scheme.
The UK broadly has a good story to tell with regard to digital trade and we believe that, through addressing the challenges outlined in our report, this can be a basis for further growth. We look forward to further progress.
Source: UK House of Lords, International Agreements Committee