A recently launched joint report titled "Digital Trade for Development" delves into the potential opportunities and challenges those developing economies may encounter in the realm of digital trade. This collaborative publication involves five prominent international organizations: the International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD), the World Bank, and the World Trade Organization (WTO). The report takes a closer look at various policy issues surrounding digital trade, including the WTO's moratorium on customs duties for electronic transmissions, the regulation of cross-border data flows, competition policies, and consumer protection.
Speaking at a high-level ministerial roundtable on digital trade during UNCTAD's eWeek, Deputy Director-General Johanna Hill highlighted the importance of the report, stating that it leverages the expertise of all five international organizations to shed light on the current state of digital trade and how policymakers can harness its potential for growth and development.
One of the key findings of the report is that cross-border digitally delivered services represent the fastest-growing segment of international trade. These services have experienced nearly a fourfold increase in value since 2005, growing at an average rate of 8.1 percent per year between 2005 and 2022. This growth has surpassed that of goods exports (5.6 percent) and other services exports (4.2 percent) and now accounts for 54 percent of total services exports. The rise of digital trade offers new opportunities for global engagement, including for farmers and small businesses, as they find innovative ways to gain a competitive edge.
The report also highlights the potential benefits of digital trade for various groups, including Least Developed Countries (LDCs), women, Micro, Small, and Medium-sized Enterprises (MSMEs), and young people. However, it emphasizes the need to bridge the digital divide and enhance the readiness of developing economies to fully benefit from digital trade. To achieve this, the report calls for increased international financial and technical support to enhance connectivity and skills in developing economies, as well as greater international cooperation in regulating aspects related to digital trade.
Regarding the WTO's moratorium on customs duties for electronic transmissions, the report notes that it has a limited impact on government revenue. While there may be uncertainties about the scope of the moratorium and the definition of electronic transmissions, estimates suggest that potential revenue from tariffs on electronic transmissions ranges from 0.01 percent to 0.33 percent of overall government revenue on average for developing economies, with higher losses for a few economies.
The report underscores the importance of global cooperation in addressing regulatory issues such as cross-border data flows, competition, and consumer protection. It emphasizes that international organizations should collaborate with governments and stakeholders to ensure that small businesses, women entrepreneurs, young innovators, and consumers in all economies can fully enjoy the benefits of digital trade.
In conclusion, the joint report highlights the growing significance of digital trade and offers insights into how it can contribute to the development of economies, especially in the context of developing nations. It emphasizes the need for international cooperation and support to navigate the evolving landscape of digital trade successfully.
