{"id":16846,"date":"2019-11-08T11:00:31","date_gmt":"2019-11-08T19:00:31","guid":{"rendered":"http:\/\/www.palada.net\/index.php\/2019\/11\/08\/news-10584\/"},"modified":"2019-11-08T11:00:31","modified_gmt":"2019-11-08T19:00:31","slug":"news-10584","status":"publish","type":"post","link":"http:\/\/www.palada.net\/index.php\/2019\/11\/08\/news-10584\/","title":{"rendered":"Digital Trade: Framing the Global Rule Book for Our Connected Future"},"content":{"rendered":"

Credit to Author: Jeannie Salo| Date: Fri, 08 Nov 2019 13:30:59 +0000<\/strong><\/p>\n

This week, Naples, Florida will play host to the 2019 NEMA Annual Meeting<\/a>, an event that brings together the U.S. electroindustry C-Suite and select industry suppliers to discuss the megatrends impacting electrical and medical imaging manufacturers.\u00a0 The theme of this year\u2019s meeting is \u201cSecuring Our Connected Future,\u201d and discussions will focus on the challenges and opportunities arising from data-rich products and systems. \u00a0One of the pivotal issues being highlighted is digital trade.<\/p>\n

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As the conference takes place, preparations are already underway at the World Trade Organization (WTO), and with dozens of WTO member representatives, to embark upon their next round of negotiations regarding the WTO Joint E-Commerce Initiative.\u00a0 The Initiative explores new rules to govern the \u201ctrade-related aspects of electronic commerce\u201d [i]<\/a> including data flows, privacy, cybersecurity, and customs duties.<\/p>\n

What is Digital Trade? <\/strong><\/p>\n

As a quick primer, \u201celectronic commerce\u201d or \u201ce-commerce\u201d and \u201cdigital trade\u201d are often used interchangeably.\u00a0 The Office of the United States Trade Representative (USTR) defines digital trade as \u201ccapturing not just the sale of consumer products on the Internet and the supply of online services, but also data flows that enable global value chains, services that enable smart manufacturing, and myriad other platforms and applications.\u00a0 Some portion of nearly every business is digitally enabled, and every industry leverages digital technology to compete internationally.\u201d[ii]<\/a><\/p>\n

Why is This Important? <\/strong><\/p>\n

Today, digital trade is contributing more to GDP than financial or merchandise flows and is growing on a global basis. \u00a0Digitalization is not only creating new trade opportunities for firms to sell more products to more markets but is also increasing trade in goods and services across all sectors and allowing countries to draw greater benefits from trade agreements. \u00a0In fact, the OECD estimates that ICT services trade increased 40% from 2010 to 2016.[iii]<\/a> \u00a0Further, global GDP growth is projected to increase by $450 billion each year due to digital flows.[iv]<\/a> \u00a0Analysts estimate that digital flows of goods, services, and finances will rise to $85 trillion by 2024.[v]<\/a><\/p>\n

Whether we realize it or not, all companies, governments, and consumers living and operating in the digital economy rely upon digital trade. \u00a0But, unlike trade in traditional hard goods and services, the rules governing digital trade in the global marketplace are not yet written.\u00a0 And until they are, we are all operating in an ungoverned space that limits our ability to realize the full potential of the digital era.<\/p>\n

What are the Rules? <\/strong><\/p>\n

In general, new multilateral rules to govern trade have not been updated significantly since the arrival of the Internet and the digital economy. \u00a0Indeed, a few bilateral and regional agreements have incorporated new rules in the form of digital trade chapters, but in global terms, the digital trade landscape continues to operate like the \u201cWild West\u201d.\u00a0 And because the adoption of new rules requires the debate and review of multiple challenging topics, digital trade may be one of the most important and complex policy issues of our day.\u00a0 In addition to covering the traditional areas of predictable, free and fair trade, digital trade policy addresses fundamental questions about data, trust, and sovereignty.<\/p>\n

Why is This Challenging? <\/strong><\/p>\n

The benefits of the digital era have not come without cost.\u00a0 While the economic benefits of digital trade cannot be questioned, the ubiquitous access to and exchange of data has given way to several legitimate debates and concerns about the access to and ownership of global citizens\u2019 personal data.\u00a0 This has led to legitimate questions of who owns personal and non-personal data, how that data should be shared with companies and across national borders, and how privacy and security concerns around this data can be addressed. \u00a0Furthermore, countries want to ensure that new rules governing global digital trade do not inadvertently prevent them from both protecting their citizens and realizing their own gains from the digital economy.<\/p>\n

What is Emerging? <\/strong><\/p>\n

As a result, governments are responding with a myriad of public policies and regulations.\u00a0 According to the Organisation for Economic Cooperation and Development (OECD), government data regulations have steadily increased from zero in the early 1970s to presently over 200 independent regulations globally[vi]<\/a>.\u00a0 What has emerged is essentially three approaches to data policy:\u00a0 1) an open approach that allows for the free flow and use of data; 2) an approach that supports openness but with an acknowledgement that personal data belongs to citizens and that data privacy is a fundamental human right; and 3) an approach that restricts the use and flow of data and allows the state unfettered access to data.\u00a0 These data philosophies are manifesting in various proposals that will play out in the WTO e-commerce negotiations.<\/p>\n

What Does Schneider Electric Support? <\/strong><\/p>\n

Over the past 15 years, we have undergone a transformation of our own, from pure electrical products \u2013 where we have a world leading franchise \u2013 to the world of connectivity enabled by digital transformation, the Internet of Things (IoT), and artificial intelligence (AI). \u00a0We develop connected technologies that harness data to manage energy and processes in ways that are safe, reliable, efficient, and sustainable for the benefit of society.<\/p>\n

International agreements on digital trade are important building blocks that inform how global businesses design solutions and conduct operations.\u00a0 They provide consistent rules and predictability that foster economic growth, establish guidelines for how companies can import and export digital products and services, and determine how these products and services can be architected to allow for the most efficient and effective delivery of services to consumers. \u00a0At Schneider Electric, we support a global trading system that is open and addresses government and citizen security and privacy concerns through a foundation of trust.\u00a0 Specifically, we support the:<\/p>\n