Digital Trade Technologies, Services and Sustainable

Development

World Trade Forum (EUI & Global Governance Programme)

29-29 September 2018, Florence

Erik van der Marel

Senior Economist at ECIPE

Univesité Libre de Bruxelles (ULB) - Solvay Brussels School

Concept

• Restrictions to digital technologies in trade

• Who and why important to tackle?

What “trade” policies are problematic?

Internet com

services

Cloud-based

data

processing

Digital

contentE-commerce IoT

Data measures

Data protection and privacy x x x x x

Data localization x x x x

Cybersecurity measures

Disclosing source codes x x x x

Restrictions on cryptography x x x x x

Censorship x

IPR measures

Intermediate l iabil ity x x x

Anciliary copyrights x x x

USITC (2017)

All “data” policies 0

.2.4

.6.8

CHNRUSTU

RFR

AID

NVN

MDEU

KORBR

NM

YSDNKLT

UFINIT

AIN

DG

BRPAK

HUNESP

THARO

UPO

LSW

EM

EXSG

PCHECAN

AUSEU

RNG

AG

RCCO

LPR

TPER

NZL

MLT

AUTZAF

LVALU

XIR

LEST

ECUSVK

ISLBEL

SVNIS

RAR

GPR

YHKG

CZE

USA

BRACYP

BGRNO

RNLDTW

NPH

LHRVJP

NCRICHLPAN

“Global” trend in data policies

.1.2

.3.4

2006 2008 2010 2012 2014 2016

Data policies Cross-border Domestic

Digital services (future)

• Digital services or digital-enabled services

• The role of “data”

Services over the internet

0

1

2

3

4

5

6

7

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ind

ex

gro

wth

ra

te

Growth of goods, services and ICT services flows

Goods Total services Digital services

Data-intense services (Mode 3 / Mode 1; gross terms)

Source: Andrenelli et al (2018); using analytical AMNE database.

The role of data in globalization

• Contribution of data to GDP > goods (McKinsey)

• Particularly great role in Artificial Intelligence (Goldfarb and Trefler, 2018)

Data-intensity (US Census)

4.3

1.91.7

1.5

1.1 1.0 1.0 1.00.8 0.8 0.8

0.7 0.7 0.6 0.6 0.60.5 0.5 0.4 0.4

01

23

4

Ret

ail

Info

rmat

ion

Food

Pub

lishing

Pro

gram

ming

Pet

roleum

Aux

. finan

ce

Com

pute

r

Mot

or veh

icles

othe

r man

uf.

Che

micals

Utilities

Insu

ranc

e

Met

al

Pha

rmac

eutic

als

Electric

al e

q.

Telec

oms

R&D

Mac

hine

ry

Com

pute

r electr.

Data-intensity (over Labour)

Are data policies harmful?

• Yes, they lower productivity and lower trade in services

• Productivity losses are high – role of ideas in technology

Data policies and imports

ARG

AUS

AUT

BEL

BGR

BRA CAN

CHE

CHL

CHN

COL

CRI

CYP

CZE

DEU

DNK

ECU

ESP

EST

FIN

FRAGBR

GRCHKG

HRV

HUN

IDN

IND

IRL

ISL

ISR

ITA

JPN

KOR

LTU

LVA

LUX

MEX

MLT

MYS

NGA

NLD

NORNZLPAK

PAN

PERPHL

POL

PRT

PRY

ROU

RUS

SGP

SVK

SVN

SWE

THA

TUR

USA

VNM

ZAF

-20

24

6

0 .2 .4 .6 .8 1Data policy index (2015)

Conclusions

• Trend in digital / data policies rising

• Data essential ingredient in services & advanced GVCs

• Some big emerging economies most restricted

• However, negotiating sides looks complicated