Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697633969569.pdf (Australia)
Inquiry into the trade system and the digital economySubmission 20 developing economies.

These problems are not yet very well understood as technology continues to evolve, thus compelling regulators to operate in an unfamiliar and uncertain territory.

To operationalise an inclusive and robust regulatory framework for the digital economy, these problems should be viewed and resolved through a collaborative, multistakeholder and interdisciplinary approach.
In this regard, trade and investment law and policy plays a vital role in facilitating an open global environment for digital trade, improving interoperability among differentiated domestic regulatory frameworks, enhancing trust of internet consumers, and increasing integration of developing countries into the global digital markets.
Develop Deeper Understanding of the Application of International Trade Agreements to Digital Trade Issues In applying international trade law to digital trade issues, governments need to be mindful of the specific architecture of international trade agreements such as General Agreement on Trade in Service (GATS), and other relevant Preferential Trade Agreements (PTAs), and the concurrent obligations and commitments under these agreements.
This understanding is particularly critical in case of GATS as it was implemented before the internet age.

First, the structure of GATS (whereby market access and national treatment obligations are contingent on WTO Members’ commitments in their respective GATS Schedules) coupled with the outdated classification system relied upon by majority of Members creates uncertainty regarding whether GATS obligations cover new-age digital services (eg cloud services).
Second, the application of GATS to measures restricting cross-border data flows is not entirely clear, particularly in relation to two issues: (a) accommodating the cross-cutting nature of data flows with the sector-specific commitments in Members’ schedules; and (b) examining the extent to which data-flow restrictive measures are necessary to achieve desired levels of internet security, consumer protection and trust.
Finally, the diverging rules on electronic commerce in various PTAs could potentially conflict with GATS rules, creating regional blocs that disrupt the international legal framework.

While PTAs can be building blocks for global trade, the current upswing in digital protectionism can be tackled most effectively by the development of multilateral disciplines on digital trade.
Develop Coherent and Inclusive Digital Trade Rules Several recent proposals from WTO Members provide a useful starting point for initiating a constructive dialogue on digital trade.
The key issues are: (a) (b) (c) Classification of digital services: achieving common understanding on classification of digital services to facilitate higher commitments in relevant sectors; Regulatory frameworks for digital trade: developing new rules to require/encourage countries to adopt globally interoperable regulatory frameworks on cross-border data flows, data protection, cybersecurity, consumer protection, etc; and Facilitating digital inclusion: complementing (a) and (b) with measures targeted to help achieve digital inclusion, including initiatives on trade finance, supporting SMEs, facilitating electronic payments etc.
These suggested reforms can be supported either through making incremental changes within the existing GATS (for example, adoption of domestic regulation disciplines under GATS, or developing reference paper on electronic commerce akin to that on telecommunications services) or by adopting a new WTO agreement on digital trade.

While the latter route is politically more challenging, it is perhaps more likely to be effective in overcoming gaps in the current structure.
Irrespective of the route for reform, the WTO should engage with the broader network of institutions dealing with different aspects of digital trade and internet governance to contribute more meaningfully to the digital economy.

In the current scenario, a plurilateral approach is likely to be more successful than a multilateral approach in undertaking new work at the WTO such a Reference paper on Electronic Commerce.
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