White Paper Trade Rules and the Digital Economy Key Points and Findings

Chapter One | Defining the Digital Economy
Key Points Explained
01
When we think of the digital economy, most of us tend to think about e‐commerce, since
this is the most visible and certainly one of the most dynamic areas of the digital economy.
However the digital economy is much more than simply the act of providing or consuming
a service online or buying or selling something over the internet. In our White Paper we have defined the
digital economy as “The ecosystem comprising goods, products, services, platforms and solutions that are
either instrumental to or avail themselves of online connectivity”.
By the same token digital trade is a lot more than international e‐commerce, but comprises – for the sake
of this White Paper – the “cross‐border supply of goods, products, services and solutions that are
instrumental to or avail themselves of online connectivity”.
In light of these definitions, the digital economy and digital trade encompass a whole range of goods and
services, including the underlying backbone infrastructure, the services provided on top of this
infrastructure, the platforms and eco‐systems designed to provide a range of goods and services using the
connectivity this infrastructure provides, and finally the devices or terminals with which the user interfaces
with all of this functionality. Accordingly, international trade negotiations that seek to provide new rules
for how governments may regulate trade in the digital economy will go beyond the narrow issue of e‐
commerce. Instead, they will also embrace disciplines on technical barriers to trade, on the cross‐border
supply of services, on trade‐related intellectual property rights, on regulatory cooperation, privacy,
cybersecurity, online payments and a whole range of other related issues, including national security, which
are beyond the purview of a single national regulator or ministry.
The digital economy is becoming so ubiquitous and all‐encompassing that soon it will be
02 very hard to draw the line between the digital and the non‐digital or conventional economy.
The digital economy is quickly simply becoming “the economy” This is because digitization
as a trend is quickly taking hold across all sectors of the economy and permeating all areas of economic
activity. There is an increasing degree of complementarity between off‐line and online activities, which is
another factor driving this trend. This “convergence” as it is known, must also be reflected in the next
generation of international trade rules, so that disciplines are not crafted in silos but rather take into
account their potential impact on other areas of the digital and offline economies.
The digital economy and the technological breakthroughs that heralded it have proven to
03 be a watershed for productivity, innovation and economic growth, with hitherto
inconceivable new products and services being offered creating unparalleled welfare gains
for millions of internet users. These very positive effects from the growth of the online economy are things
that many policymakers can and should foster by carefully considered policy interventions. There are many
things regulators can do to ensure that their economies share in the substantial new growth opportunities
that the digital economy offers, many of which start in how they regulate and promote the availability of
offline factors such as skills, transport and connectivity infrastructure, logistics and the ease of doing
business.
Connectivity infrastructure is a basic precondition for participation in the digital economy
04 although it is not the only one. Nevertheless, without the backbone infrastructure to carry
the data produced from the interaction between providers and consumers, sellers and
buyers, suppliers and users in the digital economy, there would be no digital economy to start with. Here
also, there are different policy interventions governments and regulators can contemplate and enact in
order to boost the attractiveness of their own markets for those that invest in, build and operate the
network infrastructure required to power the digital economy, particularly operators.
5