By Esther Tetruashvily, J.D. Candidate at Georgetown Law, Tech Law Scholar

The fourth and final panel of Rethinking World Trade, co-hosted by the Georgetown Institute for Technology, Law and Policy’s Global TechNet Working Group and the Georgetown Center on Inclusive Trade and Development, focused on the topic of “Inclusive Digital Development” and was moderated by Global TechNet Working Group’s Director, Professor Anupam Chander.

Digital trade, comprising trade rules and agreements that encompass digitally-enabled transactions in goods and services, is increasingly gaining prominence. Since 2015, approximately 70% of signed trade agreements have addressed digital trade-related issues. A variety of multilateral and regional agreements, such as the Australia-Singapore Digital Economy Agreement and the EU’s Single Digital Market, are proliferating as nations and corporations race to safeguard their interests. The consensus suggests that digital trade could potentially unlock enormous growth opportunities in emerging economies if implemented correctly. However, the right course of action and the ways to ensure that digital trade empowers citizens and reduces poverty, rather than invade privacy and exploit emerging economies and vulnerable populations, remains debatable. Mindful of this tension, Professor Chander facilitated a dialogue with Ambassador Catherine Novelli of Listening for America, Jacquelene Mwangi of Harvard University, Professor Mira Burri of the University of Lucerne, and Dr. Barbara Kotschwar from VISA, in which the panelists collectively urged regulators and experts to design a digital future with inclusivity at its core.

Digital Access and Skills Development Are the Cornerstones of Inclusion

Access to digital infrastructure and bridging the digital divide are critical to making digital trade work for emerging economies. Ambassador Novelli underscored the importance of broadband access and competition in the telecoms sector for the growth of such economies. Citing a World Bank study, she explained that a 10% increase in broadband access could potentially boost gross domestic product in developing countries by 1-2% (00:7:30). To achieve this growth, she recommended that trade agreements promote market access in the telecoms sector, thereby reducing obstacles to infrastructure expansion. Concurrently, country-specific action like obligating service extension to underserved communities when awarding a digital infrastructure project, could foster effective public-private partnerships and potentially reduce access costs (00:9:30). Additionally, access to digital platforms is vital for financial inclusion and skills development. Dr. Kotschwar echoed Ambassador Novelli’s statements, emphasizing that enhancing women’s access to digital services could stimulate community-wide economic growth. Referencing an IMF study, she suggested that augmenting digital financial inclusion in payments could boost growth by 2-2.5%. She acknowledged that, despite 74% of adult women gaining access to digital payment systems, more needs to be done to equip women with the digital skills necessary to maintain businesses (00:57:00). Professor Burri concurred, highlighting how marginalized communities innovatively use digital platforms to unlock new opportunities. Therefore, improvements in access and in the development of digital skills can have profound benefits for these communities (00:19:00).

Access and Skills Alone Are Insufficient

Addressing digital inclusion in trade agreements requires more than focusing on access and skills. As Jacquelene Mwangi argued, regulators must address infrastructure and skill gaps in developing countries, but a more nuanced perspective of digital inclusion is necessary (00:13:33). She asserted that experts must consider the broader social implications of digital trade on social cohesion, labor rights, and inequality. As a solution, she proposed conducting sector-specific impact assessments to ensure that the benefits of digital trade outweigh the potential harms. Dr. Kotschwar agreed with Ms. Mwangi, contending that although digital services access has improved women’s financial inclusion, it is insufficient by itself. She advocated for more efforts to convert this access into opportunities for payments, exports, and to remove barriers for small businesses (00:25:00). Moreover, Ms. Mwangi highlighted specific challenges faced by small- and medium-sized enterprises (SMEs) and informal workers in African countries, such as technological interoperability issues and biases against African founders. These complications hinder women, minorities, and small business owners from overcoming shipping cost barriers for online products and attracting capital without a Western partner. Therefore, interventions should not only facilitate access to core infrastructure and platforms but also support sustainable business practices and address social implications like debt, labor inequity, and the market concentration of large tech platforms (00:36:00).

Capacity Building Is Equally Important

Capacity-building provisions in trade agreements can address issues beyond access and skills. The panelists emphasized the importance of capacity building for governments and individual stakeholders for truly inclusive digital trade. For instance, Professor Burri argued that constructing domestic regulatory regimes is vital for developing countries to assert their interests in international forums (01:04:00). In the evolving landscape of digital commerce, developing nations must approach the challenge from both a defensive and an offensive perspective. An example is Malawi, a country that recently enacted its own privacy law, not only strengthening its regulatory capacity but also empowering its officials to formulate and defend its interests on the international stage (00:21:00). Capacity-building is also necessary for individual stakeholders, particularly marginalized communities, such that these groups can have, from the beginning, a more significant influence on the development of policies and laws. SMEs should be provided with more information and skills to leverage exceptions or carve-outs for them in trade agreements, the panelists urged (00:38:00). Governments and international institutions should be thoughtful and proactive in diversifying stakeholders in negotiations, including representatives from minority groups, vulnerable populations, and various commercial sectors.

Security, Privacy, and Sovereignty Loom Large in the Background

The panelists identified national security, privacy, and sovereignty—typically considered non-trade issues—as potential barriers to digital trade. Citing the EU’s General Data Protection Regulation, Ambassador Novelli offered evidence that privacy and business data flows could harmoniously coexist (00:30:00). While the U.S. lacks comprehensive federal privacy protections, existing agreements with the EU suggest the potential for similar arrangements globally. Various participants, including Dr. Kotschwar, highlighted that restricting cross-border data flows might escalate cybersecurity risks and impede fraud prevention efforts. Furthermore, imposing compliance rules on small businesses might inadvertently counteract efforts toward inclusive digital trade (00:42:30). The issue of data localization, essential to both digital sovereignty and trade inclusivity, brings the tension between privacy and security into sharp relief. For developing countries, such as those in Africa, the pursuit of digital sovereignty through data localization presents a paradox. As Ms. Mwangi noted, these nations often lack the requisite capacity for data localization and tend to depend on tech giants like Google and Facebook or institutions like the World Bank (00:50:30). Additionally, data localization necessitates the construction of costly data centers which consume significant energy, a resource often scarce in developing countries. This could potentially divert government resources from more urgent social needs. Professor Chander and Dr. Kotschwar argued that the projected benefits, such as job creation and enhanced privacy and control, often fail to materialize (00:50:00). Instead, these benefits are overshadowed by the high costs, the environmental impact of constructing and maintaining data centers, and increased security concerns due to a lack of expertise.

An Agenda Going Forward

Despite the obstacles, the panel concluded with a call for fostering domestic industry in developing countries, ensuring a wider distribution of benefits, and increasing transparency in service requirements as a pathway towards enhanced inclusivity in digital trade. Throughout the panel the speakers presented a potential roadmap for a future digital inclusion trade agenda, emphasizing the importance of broadband access, skills development, capacity building, privacy protection, and support for small businesses and marginalized and vulnerable groups. Such an agenda calls for the development of inclusive policies that prioritize affordable and reliable access to digital infrastructure, promote digital literacy and skills development, and encourage creative policy thinking that accounts for training, information campaigns, and supporting regulatory creativity domestically and internationally.

To implement the panelist’s agenda and to make good on the promises of an inclusive digital future, digital trade policies must be flexible enough to adapt to rapidly changing technological landscapes and promote competition while preventing the concentration of power in the hands of a few tech giants of a small number of countries. Such flexibility must give agency to developing nations but in a way that does not further marginalize vulnerable populations. It should not prevent the sort of cross-border flow of information that underpins an open internet that can safeguard freedoms and keep communities safe online, while protecting privacy. It should not be done at the expense of the environment and in contravention of global sustainability goals.

The challenge now lies with policymakers, experts, governments, and civil society to incorporate these considerations into future and existing trade agreements. These frameworks should be developed through transparent and consultative processes that allow for input from a wide range of stakeholders, including civil society, academia, and the private sector. Only through a thoughtful, multi-stakeholder, and bottom-up approach can the benefits of the digital revolution be shared equitably. The digital revolution presents an unprecedented opportunity for economic growth and development, but it also poses significant challenges and risks. If managed carefully and inclusively, digital trade can become a powerful tool for reducing inequality, promoting sustainable development, and fostering a more equitable and inclusive global economy. The task ahead is substantial, but with a concerted effort from all stakeholders, we can ensure that the digital future is a future that benefits all.