"US Reviews Digital Trade Agreement with Asia-Pacific Allies" (Summary)

WSJ Report... South Korea Likely to Be Included

Katherine Tai, USTR Representative (Photo by AP)

[Asia Economy Reporters Haeyoung Kwon and Yujin Jo] The Wall Street Journal (WSJ) reported on the 20th (local time) that the United States is considering signing a digital trade agreement with its allies in the Asia-Pacific region, including South Korea.

WSJ cited officials involved in the talks, stating that the U.S. is discussing a multilateral digital trade agreement with Asia-Pacific countries and is currently coordinating opinions within the U.S. administration between the security and trade sectors.

The White House National Security Council (NSC) and the State Department are actively in favor of establishing digital trade norms covering cross-border data flows, personal information protection, and artificial intelligence (AI), but the U.S. Trade Representative (USTR) is taking a more cautious stance. Katherine Tai, USTR Representative, has expressed that she would not oppose the agreement as long as trade policy priorities and a worker-centered approach are maintained.

WSJ did not disclose the names of the countries under consideration for the agreement but mentioned that "allies in the Asia-Pacific region are the target participants." Earlier, Bloomberg News anticipated that Japan, Australia, Chile, and Singapore would participate, and South Korea is expected to be added to this list.

Previously, Singapore, New Zealand, and Chile signed the Digital Economy Partnership Agreement (DEPA), a digital trade agreement, last year, and South Korea and Canada are considering joining. WSJ forecasts that this first-ever DEPA will serve as a starting point for U.S.-led digital trade agreements.

The U.S. consideration of a digital trade agreement with Asia-Pacific allies largely aims to counter China, which is increasing its influence in Asia, following the U.S. withdrawal from the Trans-Pacific Partnership (TPP) in 2017.

Professor Ingyo Jung of Inha University’s Department of International Trade analyzed, "Digital trade agreements are the most effective tool for the U.S. to counter China in the current technological environment. A consensus on countering China has been formed with the European Union (EU) and Japan, and by coordinating opinions with Asia-Pacific countries such as South Korea, the U.S. plans to promote cooperation in the form of digital trade agreements to reduce China’s influence."

Digital trade agreements are multilateral agreements covering the entire digital economy, including e-commerce, digital goods, and cross-border data flows.

If this agreement is concluded, global IT giants like Google, Amazon, and Facebook could benefit, but significant differences in positions among major countries are expected regarding information sovereignty and national interests. In fact, the U.S. and China have recently clashed sharply over digital information sovereignty. China’s recent attempt to block the U.S. initial public offering (IPO) of its domestic company Didi Chuxing is an example of this.

Meanwhile, the Korea Institute for International Economic Policy estimated that South Korea’s real gross domestic product (GDP) would increase by $498 million annually if it joins DEPA. If the U.S. pursues Asia-Pacific digital cooperation in any form, the economic effects are expected to be even greater.

This content was produced with the assistance of AI translation services.