Digital Trade and the Rules-based System: Scoping the Reform Agenda

19 Pages Posted: 28 Dec 2019

See all articles by Dan Ciuriak

Dan Ciuriak

Ciuriak Consulting Inc.; Centre for International Governance Innovation (CIGI); C.D. Howe Institute; Asia Pacific Foundation of Canada; BKP Development Research & Consulting GmbH

Date Written: December 16, 2019

Abstract

The rules-based trading system is rightly celebrated for having provided order and indeed a civilizing legality to the greater part of international commerce over the past 70-odd years. Its survival for this length of time can be attributed in good measure to two things – that it provides an important public good, taming the mercantilist contest for rents and terms of trade gains implicit in the imperfect markets of international trade; and that the trading system evolved within a geopolitically stable order under an undisputed hegemon. By the same token, the rupture of the system today reflects the emergence of new fact situations on both accounts. The digital transformation has created conditions for rent generation in ways that are not governed by the existing rules. It has also shifted the competition for these rents into a new and contestable technological dimension in which the established geopolitical assets of the industrial age are of limited value, giving rise, for the first time, to new fault lines within the rules-based system. Institutions are creatures of their age. The WTO in its current form was not designed to mediate the issues at play in this emerging economy. This note sketches out the issues for international economic governance raised by the digital transformation and suggests a number of areas for reform.

Keywords: Digital Transformation, Data-Driven Economy, Digital Trade, Digitally-Enabled Trade, WTO, Geoeconomics, Rents, China, United States, Trade War, Technology War

JEL Classification: F13, F52, F55, F63, L40, L52, O30, K21, K24

Suggested Citation

Ciuriak, Dan, Digital Trade and the Rules-based System: Scoping the Reform Agenda (December 16, 2019). Available at SSRN: https://ssrn.com/abstract=3499912 or http://dx.doi.org/10.2139/ssrn.3499912

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

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Centre for International Governance Innovation (CIGI) ( email )

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C.D. Howe Institute ( email )

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