Department for Digital, Culture, Media and Sport discuss digital commerce

The technology of commerce has outpaced laws and regulations. Global data flows now generate more value than goods flows. But the global legal framework underpinning international trade was written in the early 1990s – before Google, Amazon or Facebook were founded.

As the significance of digital commerce has grown, so too has the implications of outdated legal and regulatory frameworks. Opportunities for digital protectionism are not constrained in the same way as conventional goods trade barriers. There is growing international consensus that the concentration of market power in a handful of the largest digital companies is now crowding out competition. And companies digitising trade documents are finding that the law underpinning them dates back to the 19th century – before the blockchain was a twinkle in anyone’s eye.

Governments around the world are wrestling with these issues. Here in the UK, amongst other things, we are taking forward plans for new legislation addressing online safety, digital competition, and digitising trade documentation. We are consulting on reforms to our data protection regime. And we recently launched National Strategies on Artificial Intelligence and Data.

But when governments take different routes to solve the same problems, potential barriers to trade arise. And, given the inherently cross-border nature of digital commerce, many of these problems simply cannot be solved by governments working alone. Laws must be harmonised, regulations must be compatible, and systems must be interoperable.

The UK Government is using trade negotiations to break down cross border barriers to digital trade – bilaterally, as we did through our recent Free Trade Agreements with  the EU and Japan, and multilaterally as we are doing at the WTO. But the lessons of the past tell us that trade  law needs to be complemented by more dynamic forms of intergovernmental cooperation. That is why we used the UK’s Presidency of the G7 this year to agree a Framework for G7 Collaboration on Electronic Transferable Records. And why we are negotiating a Digital Economy Agreement with Singapore that will combine binding trade law provisions with deeper forms of digital commerce cooperation.

However, ultimately, governments don’t trade, companies do. We can remove legal and regulatory barriers  to digital commerce, but we can’t compel private sector adoption of new technologies. Industry has two key roles to play. First is coordination. Potential digital commerce solutions like Legal Entity Identifiers (LEIs), distributed ledgers, and electronic signatures, have been around for  years, but adoption is impeded by network effects: their widespread use depends on, well, their widespread use. The ICC is blazing a trail here. In corralling companies to collaborate on using new technologies, the ICC is making transactions faster, cheaper and easier for everyone.

The second role for industry is to help us to help you. As more companies adopt new technologies, it is inevitable that new domestic and/or cross-border legal and regulatory barriers will emerge. We need to hear from you so that we  can do something about them. That is why we are asking you to flag digital commerce barriers to us at the Department of Digital, Culture, Media and Sport via digitalcommerce@dcms.gov.uk. Please drop us a line as you encounter difficulties in using new digital commerce technologies and we will do what we can to help.

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