Digital trade games:

Digital trade games: (The Hindu, Editorial) (Global Digital Trade Paradigm at Proposed RCEP Treaty of ASEAN countries)

Background:

• In order to broaden and deepen the engagement among ASEAN countries, the leaders of 16 participating countries established the Regional Comprehensive Economic Partnership (RCEP) to enhance parties’ participation in economic development of the region.
• Recently, the negotiators of ASEAN countries are meeting at Hyderabad from July 21 to 26, to discuss the negative impact of the fresh round of free trade agreements on e-Commerce, intellectual property rights, and access to medicine, on marginalised communities, agriculture, labour and social security, public services, and fisheries and trade.

About RCEP:

• The RCEP was built upon the existing ASEAN+1 FTAs with the spirit to strengthen economic linkages and to enhance trade and investment related activities as well as to contribute to minimising development gap among the parties.
• In August 2012, the 16 Economic Ministers endorsed the Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership.
• The RCEP negotiations were launched by Leaders from 10 ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam) and six ASEAN FTA partners (Australia, People’s Republic of China, India, Japan, Republic of Korea, and New Zealand) during the 21st ASEAN Summit and Related Summits in Phnom Penh, Cambodia in November 2012. The RCEP negotiations commenced in early 2013.
• The objective of launching RCEP negotiations is to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement among the ASEAN Member States and ASEAN’s FTA partners.
• The Association of Southeast Asian Nations (ASEAN) has free trade agreements with six partners namely People’s Republic of China (ACFTA), Republic of Korea (AKFTA), Japan (AJCEP), India (AIFTA) as well as Australia and New Zealand (AANZFTA).

Area under RCEP Negotiation:

• The RCEP negotiation includes: trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, e-commerce, small and medium enterprises (SMEs) and other issues.

Issue of Digital Trade and e-commerce at RCEP negotiations:

• The focus of the negotiators will be on e-commerce and global data trade. The issue under discussion will placing limitations on digital policymaking by any country to protect / promote the e-commerce company of respective country.
• India has been opposing binding norms on opening up the e-commerce sector at the level of RCEP as well as the global level (WTO) talks on grounds including that it (India) is yet to have a comprehensive national policy on the topic.
• Many RCEP nations including Australia, Japan and China, are pushing for inclusion of ‘Terms Of Reference’ for RCEP negotiations concerning e-commerce. This is with a view to have some binding commitments from the RCEP members on liberalising e-commerce and ensure that the final pact has a separate chapter on e-commerce.

Concern over Digital Trade:

• No countries could agree to let the data flow freely across borders.
• The data that is increasingly basic to banking, retailing, the defence forces, public services, health and education services etc. are not the simple date but digital information or digital intelligence which can be meaningfully negotiated at global trade talks, because each of these services have different dynamics and implications and needs different treatment.
• It may be too early to understand the real nature of these emergent digitalised services
• Digital intelligence is going to be by far the single most important economic resource and it believes that whoever has it controls everything. Secondly, today the the digital intelligence tends to concentrate strongly around a few poles or centres for example Uber has worldwide intelligence about urban transport; Monsanto is working on a global agriculture networking and intelligence platform; for General Electric etc.
• The issues of e-commerce or digital trade are much larger because today every major economic and social activity will be underpinned by digital intelligence.
• The opening of digital trade will make the domestic e-commerce companies more vulnerable and less competitive.

India’s Strategy:

• India must not succumb to global digital trade paradigms and rules that back predatory business.
• India must consider a digital industrialisation strategy that ensures that the immense value arising from digitally-induced efficiencies in every sector is retained within India and not allowed to flow out uninhibitedly.
• If India allows such outflows of data intelligence then it will soon find itself on the wrong side of digital colonisation.
• India must put its digital house in order before thinking of getting a part of the global digital pie, as China did.
• Domestic digital strengths should first be developed on the back of its big domestic market.
• These is a requirement of an independent digital policy, including protections for India’s incipient digital industry. This will not only ensure that our economy and society are not controlled from outside but also protect existing jobs and create many more new ones.

Conclusion:

• India has just begun some good policy work for a data economy and society, with its “Digital India” policies, and development of “digital public goods” like the IndiaStack of basic digital platforms and infrastructural data systems that are open to all. These can be very helpful in developing a local digital industry. However, such efforts can get nullified if India succumbs to global digital trade paradigms and rules developed by countries that back predatory global digital business, by accepting the “free global flow of data” and sacrificing its digital policymaking powers and sovereignty.