<대외경제정책硏> "South Korea Urgently Needs Digital Trade Strategy... Must Prepare for WTO E-commerce Negotiations"

[Sejong=Asia Economy Reporter Joo Sang-don] As discussions at the World Trade Organization (WTO) level are underway to regulate cross-border e-commerce, a national policy research institute has suggested that South Korea urgently needs to establish a mid- to long-term digital trade strategy roadmap.

On the 10th, the Korea Institute for International Economic Policy (KIEP) released a report titled "Prospects for WTO E-commerce Negotiations and Korea's Tasks," which contains these details.

The WTO plurilateral e-commerce negotiations are based on the Joint Declaration on E-commerce adopted by 71 WTO member countries on March 14, 2018, and have been ongoing since the negotiations began in March 2019. During this period, the number of participating countries increased from 76 to 86.

The report identified key core issues as ▲ provisions ensuring the free flow of cross-border data ▲ prohibition of requirements for localizing computing facilities ▲ duration of duty-free application on electronic transmissions. KIEP Research Fellow Lee Kyu-yeop explained, "There is a conflict of interests between the United States and the European Union (EU) regarding cross-border information transfer and privacy protection, while advanced countries are pressuring and developing countries resisting the prohibition on localizing computing facilities. There is also a sharp division of opinions between advanced and developing countries over the debate on permanent duty-free treatment of electronic transmissions."

Research Fellow Lee noted that since a draft of the consolidated text for WTO e-commerce negotiations has been prepared and negotiations are expected to continue this year, a mid-term review is necessary. He said, "Efforts are needed to identify the economic impacts including additional service market openings, regulatory, institutional, and legislative improvement tasks, as well as technical supplementation tasks. Systematically identifying, compiling statistics, and documenting digital trade barriers will be useful not only for WTO e-commerce negotiations but also for bilateral and regional trade agreement e-commerce negotiations, so this should be urgently pursued."

He added, "As WTO e-commerce negotiations continue and e-commerce norms spread through bilateral and regional trade agreements, it is necessary to set directions for mid- to long-term digital trade policies and prepare short- and medium-term digital trade strategies. Digital trade policies should be designed to enhance the effects of the Digital New Deal, and domestic regulatory, institutional, and legislative improvement directions should be considered in light of changes in e-commerce norms."

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