Digital trade and data Contents


What is digital trade?

1.There is no single recognised and accepted definition of digital trade. Dr Emily Jones, Associate Professor at the University of Oxford, told us that it is “helpful for us to think [of digital trade as] the digitally enabled transactions of goods and services.”1

2.The Government has stated that:

The strongest effort to develop a coherent and comprehensive definition that captures the key features of the different components of cross-border digital trade is found in work led by the OECD, WTO and the IMF.2

3.The Organisation for Economic Co-operation and Development (OECD) states that:

there is a growing consensus that [digital trade] encompasses digitally enabled transactions of trade in goods and services that can either be digitally or physically delivered, and that involve consumers, firms and governments.3

4.In the World Trade Organization’s (WTO’s) Work Programme on Electronic Commerce, adopted in 1998, electronic commerce is described as: “the production, distribution, marketing, sale or delivery of goods and services by electronic means.”4 The International Monetary Fund (IMF) has defined digital trade as “all cross-border transactions that are delivered remotely over ICT networks–i.e. over voice or data networks, including the internet, in an electronically downloadable format.”5

5.Hosuk Lee-Makiyama, Director of the European Centre for International Political Economy, captured the challenges of seeking to define and measure digital trade. He told us:

Digital trade defies legal and statistical definitions, as we have heard, and it is very important that we think of it as a general purpose technology. Therefore, trying to define it or trying to measure it can be as meaningful as trying to figure which portion of trade is enabled by electricity or good weather.6

Role of digital trade provisions in free trade agreements

6.Rather than removing barriers to digital trade, e-commerce provisions in free trade agreements (FTAs) have been more about locking in existing regulatory practices and preventing future barriers to trade. Hosuk Lee-Makiyama, said:

All trade agreements, especially in the area of services and technology analysis, are mostly about collecting commitments in negative terms. That is preventing the contracting parties from undertaking restrictions and prohibitions that might impede negatively on trade. Of course, there is a clear set of exceptions to that.7

Our inquiry

7.We focused our scrutiny on the digital trade and data provisions in the UK-Japan Comprehensive Economic Partnership Agreement (CEPA), as well as the Government’s negotiating objectives for its ongoing digital trade negotiations. We also considered the role of the Department for Digital, Culture, Media, and Sport (DCMS) in developing the UK’s domestic data protection law. Our predecessor Committee held a short inquiry in November 2020 which considered CEPA, including its digital and data provisions.8 We launched our inquiry in December 2020. Over the course of three evidence sessions, we heard from 17 witnesses, including academics, business representatives, civil society organisations, the Minister of State for Media and Data, and the Minister of State for Trade Policy. We also received 29 pieces of written evidence. We are grateful to all those who provided oral and written evidence to our inquiry.

8.We acknowledge that the UK’s sole management of its trade policy is in its infancy, and that its policy in relation to digital trade and data may still be in development.

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2 Department for International Trade, Understanding and measuring cross-border digital trade, 14 May 2020, p 5

4 World Trade Organization, Work Programme on Electronic Commerce, 30 September 1998

5 IMF Committee on Balance of Payment Statistics, Towards a Handbook on Measuring Digital Trade: Status Update, October 2018

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8 House of Commons International Trade Committee, Second Report of Session 2019–21, UK-Japan Comprehensive Economic Partnership Agreement, HC 914

Published: 28 June 2021 Site information    Accessibility statement