Deng, Haodi --- "Fragmentation of International Digital Trade Rules: Current State, Reasons and Responses" [2024] JCULawRw 4; (2024) 30 James Cook University Law Review 47

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Fragmentation of International Digital Trade Rules: Current State, Reasons and Responses

Haodi Deng^[1]*

Abstract

While digital trade has become increasingly significant to international trade, the legal framework of the World Trade Organization (‘WTO’) is not yet properly equipped to govern it. Against this backdrop, digital trade rules have rapidly increased in various frameworks, particularly regional ones. Nevertheless, the rules are fragmented because different groups headed by the US, the EU and China have established different digital trade regimes. The main causes for this fragmentation are differences in domestic digital economies and regulatory frameworks across jurisdictions. Disparities in digital economies exist not only between developed and developing countries in general, but also among advanced players, causing their divergent attitudes towards digital trade liberalisation. Furthermore, a country or region will internationalise its domestic digital trade rules by transplanting them into trade agreements, while existing rules can affect governments’ willingness to commit to digital trade liberalisation. As a result, digital trade rules often reflect domestic regulatory frameworks. To mitigate the fragmentation, a multilateral digital trade agreement should be established within the WTO legal framework. Negotiators should focus on the cross-border flow of data and consider the boundaries of international digital trade rules. Moreover, rules under regional trade agreements (‘RTAs’) can complement those in the WTO and should be multilateralised in the long run.

Ⅰ Introduction

Digital trade can be described as all cross-border transactions that are digitally ordered and/or delivered,^[1] although there is currently no consensus on its meaning. Compared to ‘electronic commerce’ (‘e-commerce’), which the World Trade Organization (‘WTO’) defined as ‘the production, distribution, marketing, sale or delivery of goods and services by electronic means’,^[2] ‘digital trade’ is a narrower concept.^[3] However, the two terms are often used interchangeably. Most WTO members involved in multilateral discussions on digital trade have adopted both the expressions ‘digital trade’ and ‘e-commerce’ without explicitly distinguishing between them.^[4]

Digital trade is becoming increasingly significant in international trade while applications of digital technologies such as artificial intelligence and blockchain have revolutionised the global economy.^[5] In 2018, digital trade accounted for approximately 24% of global trade.^[6] In the same year, exports of digital deliverable services amounted to $2.9 trillion, accounting for over 50% of global services exports.^[7] This share surged to 63% in 2021 following the far-reaching impact of the COVID-19 pandemic on the composition and nature of international trade services.^[8] Although the share decreased to around 55% in 2023, the total value of exports of digitally deliverable services increased by approximately 1.2% compared to 2021.^[9]

Meanwhile, domestic policies related to digital trade are increasing. More data restriction policies have been implemented, such as data localisation requirements and privacy protection regulations, which can cause disruptions and unintended externalities on digital trade.^[10] Likewise, an increasing number of jurisdictions have adopted domestic measures towards trade-related aspects of digital trade, which may directly or indirectly impede data flows across borders and form barriers to digital trade. These domestic policies and measures can cause digital fragmentation, leading to negative economic consequences, reduced competition and business opportunities, hindered technological progress and barriers to inter-jurisdictional cooperation.^[11] As such, international cooperation is necessary to mitigate digital fragmentation and prevent undesirable externalities.^[12] Consequently, many international digital trade rules regulating domestic measures have been developed to reconcile digital trade liberalisation with national sovereignty.

This paper analyses the current state of international digital trade rules and observes that these rules are fragmented. It further discusses the reasons for the fragmentation and proposes solutions to mitigate it.

Part II demonstrates the fragmentation of international digital trade rules. It argues that the WTO has failed to address digital trade-related issues in a comprehensive manner, despite providing some rules for the governance of digital trade. It also contends that different groups headed by the US, the EU and China have established different digital trade regimes through their regional trade agreements (‘RTAs’), resulting in fragmentation at the bilateral and regional levels.

Part Ⅲ identifies differences in domestic digital economies and legal frameworks as the main causes for the fragmentation. It contends that disparities in digital economies exist not only between developed and developing countries in general, but also among advanced players, leading to their divergent attitudes towards digital trade liberalisation. It also argues that a country or region will internationalise its domestic digital trade rules by transplanting them into trade agreements, while established international digital trade rules can in turn affect governments’ willingness to commit to digital trade liberalisation.

Part Ⅳ advocates situating a multilateral digital trade agreement under the WTO legal framework, complemented by RTAs, to mitigate the fragmentation. Considering the challenges of multilateral negotiations on digital trade rules, this paper suggests that negotiations focus on cross-border data flows and that negotiating parties carefully consider what should be covered by digital trade agreements.

Ⅱ The State of International Digital Trade Rules: The Fragmentation

A Limited Rules under the WTO Legal Framework

The digital trade rules under the WTO framework are largely found in the General Agreement on Trade in Services (‘GATS’).^[13] The GATS defines ‘trade in services’ as the supply of services through four modes: cross-border supply (Mode 1), consumption aboard (Mode 2), commercial presence (Mode 3) and presence of natural persons (Mode 4).^[14] Digital trade is related to all four modes, especially Mode 1. Meanwhile, WTO members’ obligations under the GATS are reflected in their schedules of specific commitments. Most schedules cover sectors related to digital trade, such as computer and related services as well as telecommunication services.^[15] Moreover, the GATS rules and commitments are technologically neutral. According to WTO jurisprudence, the GATS does not distinguish between technical means of service delivery.^[16] Therefore, WTO members’ specific commitments extend to services provided through electronic means, unless they have made explicit limitations.^[17]

Other WTO Agreements also include digital trade-related rules. For example, the Information Technology Agreement has liberalised digital trade by eliminating tariff barriers on certain information and communications products.^[18] Likewise, the General Agreement on Tariffs^[19] and Trade and the Agreement on Trade Facilitation^[20] have facilitated digitally enabled trade.

Overall, the WTO Agreements provide some rules governing digital trade-related issues. However, most of these rules were negotiated during the late 1980s to early 1990s, when digital trade was at an early stage of development. Moreover, they have remained unchanged despite rapid and profound technological changes. Consequently, the multilateral rules are not comprehensive and may not address a number of issues, especially cross-border data transfer.^[21] Therefore, there is a need for WTO members to negotiate new digital trade rules.^[22]

On the other hand, multilateral discussions on digital trade have produced few results so far. The negotiations started in 1998, with the WTO launching its E-Commerce Work Programme.^[23] At that time, WTO members agreed a temporary moratorium on customs duties on electronic transmissions,^[24] which has been repeatedly renewed at each Ministerial Conference.^[25] However, the Work Programme progressed slowly over the following two decades due to severe divergences among members.

In 2017, 71 WTO Members issued a Joint Statement on E-Commerce at the 11^th Ministerial Conference, initiating exploratory work towards future WTO negotiations on trade-related aspects of e-commerce.^[26] Relevant negotiations commenced two years later with the issue of another Joint Statement by 76 WTO members accounting for 90% of global trade (including China, the US and the EU). As of October 2023, the number of members engaged in the negotiations has increased to 90. Meanwhile, the negotiations cover a wide range of topics, including data flows, privacy and consumer protection and cybersecurity. Since the negotiations started, WTO members have submitted dozens of proposals, some containing specific digital trade rules. Nevertheless, different members propose rules addressing distinct areas, despite some consensus. For example, the US proposal emphasises free cross-border data movement.^[27] In contrast, the rules proposed by the EU prioritise personal data and privacy protection instead of free cross-border data transfers.^[28] They may conflict with those highlighted by the US. Overall, it is doubtful that the negotiations will ultimately achieve substantial results, since the members involved have significant digital divides, as well as divergences on numerous issues including the meaning of trade-related aspects of e-commerce and the scope of future rules.

Meanwhile, the dispute settlement mechanism, assuming the WTO’s judicial function, plays a small role in digital trade governance. Similar to negotiating new rules, interpreting and amending existing WTO rules is difficult due to the lack of consensus among members. Consequently, the dispute settlement mechanism has to handle some ‘impossible cases’^[29] by clarifying existing rules. Due to potential disproportionate tasks to its function, the dispute settlement mechanism has difficulty satisfying every member, regardless of how it handles its cases. In 2019, the WTO Appellate Body stopped functioning due to the US blocking re-appointments.^[30] As such, it would be unreasonable to expect the WTO dispute settlement mechanism to respond to digital trade challenges by performing its function. Perhaps more worryingly, since no provision can now be clarified at the highest level, flexible exceptions in the WTO Agreements could become excuses for digital protectionism. For example, WTO members could invoke the privacy exception under Article ⅩⅣ(c)(ⅱ) of the GATS^[31] to excuse disguised restrictions on international digital trade, as the scope of the exception has not been scrutinised in dispute settlement proceedings.^[32]

B Fragmented Rules in Bilateral and Regional Framework

International digital trade rules have flourished at the bilateral and regional levels, despite failing legal adaptation under the auspices of the WTO.^[33] Over the past 20 years, many countries and regions have incorporated digital trade provisions into their trade agreements. As of 2022, 364 RTAs were in force and notified to the WTO.^[34] Among these RTAs, 116 include at least one digital trade (or e-commerce) provision, representing over 32% of the total. Some RTAs with digital provision(s) are well-known. For example, the Regional Comprehensive Economic Partnership Agreement (‘RCEP Agreement’)^[35] and the US-Mexico-Canada Agreement (‘USMCA’).^[36] Notably, several jurisdictions have concluded ‘digital economy agreements’, including the Australia-Singapore Digital Economy Agreement.^[37] These agreements delve into broader areas, such as AI,^[38] but cover largely the same digital trade-related issues as existing trade agreements.^[39]

On the other hand, international digital trade rules in RTAs are fragmented.^[40] Currently, the US, the EU and its members as well as other advanced players are leading the development of international digital trade regimes.^[41] Meanwhile, some emerging digital economies, notably China, are playing an increasingly significant role in rule-making. However, each of them tries to steer international digital trade rules in its desired direction and infuse the rules with its own interests. Consequently, the systems they establish differ from each other, with diverse digital trade rules. Specifically, the rules diverge significantly in terms of coverage scope and digital trade barrier definition.

Firstly, digital trade rules in the US-led RTAs mainly deal with digital content or services with less attention to trade in goods.^[42] One example is the USMCA,^[43] signed by the Trump Administration in 2018, which the US intends to use as a template for trade agreements with the EU, Japan and others.^[44] Chapter 19 of the agreement, entitled ‘Digital Trade’, closely resembles the ‘Electronic Commerce’ chapter of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (‘CPTPP’).^[45] Article 19.1 under the ‘Digital Trade’ chapter defines digital products as products that have been ‘digitally encoded, produced for commercial sale or distribution’ and capable of being transmitted by electronic means.^[46] The definition does not employ the terminology of ‘goods’ or ‘services’. Meanwhile, according to the annotation of Article 19.1, it does not suggest the parties’ views as to whether digital products are goods or services. Nevertheless, the defined ‘digital product’ has significant characteristics that distinguish it from goods. It is argued that defining ‘digital good’ in this manner avoids the frequent ‘hard battle’ on service liberalisation.^[47]

In contrast, digital trade rules in China’s RTAs focus more on goods trade. Although some rules mention services, most are concerned with ancillary services, with the ultimate purpose of facilitating trade in goods.^[48] For example, in the RCEP Agreement, to which China is a party, rules for trade facilitation are primarily concerned with paperless trading, electronic authentication and electronic signatures.^[49] This feature is also reflected in the bilateral free trade agreements concluded by China prior to the RCEP Agreement, including the China-Australia Free Trade Agreement.^[50] The RCEP Agreement distinguishes itself from previous RTAs by providing additional rules on computer facilities location and electronic cross-border information transmission. However, the rules have flexible exceptions. For example, if one party requires locating computer facilities in its territory for market access, and considers such a requirement necessary for protecting its ‘essential security interests’, the others are not able to dispute the measure.^[51] The stance on security interests remains consistent regarding cross-border information transfer by electronic means.^[52] Furthermore, in addition to providing a ‘legitimate public policy objective’ exception to localisation requirements and restrictions on cross-border information transfers, the RCEP Agreement also enables the implementing party to decide the legitimacy of these public policies.^[53] As a result, the RCEP Agreement allows any party to decide when the exception should apply and operate beyond their obligations whenever desired.^[54] Moreover, Chapter 12 of the RCEP Agreement is entitled ‘Electronic Commerce’ and its scope of application is limited to measures affecting electronic commerce adopted or maintained by contracting parties.^[55] Measures affecting the supply of a service delivered electronically are subject to the rules in Chapter 8 ‘Trade in services’ and Chapter 10 ‘Investment’ as well as any relevant exceptions.^[56]

Furthermore, the EU is somewhere between China and the US in terms of what matters should be governed by digital trade rules. This is reflected in the Economic Partnership Agreement between the European Union and Japan (‘EPA’),^[57] which entered into force on 1 February 2019. On the one hand, Chapter 8 of the EPA is headed ‘Trade in Services, Investment Liberalisation and Electronic Commerce’.^[58] The parties use the expression ‘electronic commerce’ not ‘digital trade’ and place it in parallel with services trade and investment liberalisation. Meanwhile, Chapter 2 is entitled ‘Trade in Goods’. These title arrangements may reflect the parties’ preferences.

On the other hand, the rules relating to e-commerce in Chapter 8 apply to measures taken by the parties that affect trade conducted through electronic means. Thus, the rules in the e-commerce (or digital trade) chapter will apply to most measures affecting the supply of a service delivered electronically, although they will yield to other rules in the agreement, such as those relating to goods trade, services trade or investment, if in conflict.^[59]

Overall, the EU’s concept of electronic commerce (or digital trade) may be narrower than the US’s, but broader than China’s.

Secondly, digital trade rules in RTAs led by the US, China and the EU, respectively, address different trade barriers. The US proposed rules target not only border measures, but also extensive behind-the-border measures. The behind-the-border measures include discriminatory treatment among digital products in general, privacy or data protection regulations, data localisation requirements, cross-border data flow restrictions and forced technology transfer and source code disclosure.^[60]

In contrast, digital trade rules in China’s RTAs identify trade barriers primarily as several traditional domestic measures, especially at the border, such as high tariffs and cumbersome customs procedures. For example, the China-Australia Free Trade Agreement includes many provisions designed to reduce or eliminate the impact of traditional trade barriers on e-commerce.^[61]

Furthermore, the EU emphasises explicitly the importance of adopting or maintaining measures to protect e-commerce users’ personal data according to domestic laws and regulations.^[62] Consequently, the EU is less likely to regard regulations like the General Data Protection Regulation (‘GDPR’)^[63] as trade barriers.

Finally, numerous digital trade rules in the US-led RTAs reach far beyond the existing WTO legal framework. For example, the ‘Digital Trade’ chapter of the USMCA not only covers areas like electronic authentication and signatures, but also provides detailed rules and imposes clear obligations on issues such as personal information protection, internet openness, cross-border data flows, location of computer facilities and source code.^[64] Therefore, if the WTO wishes to incorporate US-led rules, it must realign its ‘regulatory philosophy’ and redesign its regulatory framework.^[65]

In contrast, China’s proposed digital trade rules do not add much new to existing WTO rules. Instead, China aims to ‘clarify and improve’ the trading rules under the multilateral system and apply them to the emerging field of digital trade.^[66] China’s proposal at the WTO’s negotiations on trade-related aspects of e-commerce aligns with the digital trade provisions found in several FTAs it has previously signed, which is hortatory in nature and does not address data flows.^[67] Therefore, the Chinese proposals are highly compatible with WTO rules.

Moreover, EU-led digital trade rules are less ambitious than the US’s, but not as conservative as China’s. For example, Article 8.73 of the EPA provides that a party ‘may not’ require persons of the other party to transfer their source code of software.^[68] In contrast, according to Article 19.16 of the US-led USMCA, ‘no party shall’ require a person of another party to transfer the source code of software.^[69] Likewise, Article 19.12 of the USMCA imposes obligations with respect to electronic cross-border transfer of information.^[70] By comparison, the EPA does not include commitments to cross-border data flows. The EU agreed to incorporate rules concerning cross-border data movement in 2023, following renegotiations with Japan under Article 8.81 of the EPA.^[71] However, the EU’s commitment came after the European Commission granted Japan an ‘adequacy decision’,^[72] when Japan had reformed its domestic law to meet GDPR standards.^[73] Arguably, the EU is cautious about committing to cross-border data flows.

Overall, the US, EU and China have established different digital trade regimes through their leading RTAs. Consequently, international digital trade rules have fragmented into ‘discrete legal islands’^[74] with only a few bridges connecting them.

Ⅲ The Reasons for the Fragmentation

No trade rule exists in a vacuum. Instead, trade rules often delineate the unique domestic economies of the states or regions proposing such rules and their own regulatory frameworks.^[75] Therefore, differences in domestic digital economies and regulatory frameworks can be sources of fragmented digital trade rules.

A Different Domestic Digital Economies

The level of digital economy development between most developed and developing countries differs considerably, although they all consider embracing the digital economy as a strategic response to the ongoing technological and industrial revolution. The digital economy in developed countries reached $24.4 trillion in 2020, accounting for 74.7% of the global digital economy, 49.4% higher than that in developing countries.^[76] Meanwhile, the digital economy accounted for 54.3% of developed countries’ GDP, approximately twice as much as that of developing countries.^[77] In 2021, the digital economy in developed countries grew to around $27.6 trillion, but its share of the total global digital economy fell to 72.5%, compared to 27.5% in developing countries.^[78] According to a 2023 report, in 2022, the digital economy represented 55.9% of GDP in developed countries and 38.5% in developing countries, based on a sample of 15 countries on six continents.^[79] These shares are expected to increase to 58.3% and 46%, respectively, by 2026.^[80] The gap between developed and developing countries in terms of digital economy development remains significant, despite a narrowing tendency. Given developed countries’ unrivalled advantages over developing countries in infrastructure, digital technology, market size, etc., there is no reason to think the gap will close soon.

A relatively underdeveloped digital economy may lead to greater hesitation by most developing countries in accepting digital trade liberalisation commitments. First, commitments to digital trade rules can affect the achievement of domestic regulatory objectives.^[81] By taking a conservative approach to commitments, developing countries may preserve more policy space. As such, their governments will be able to take multiple measures to promote their domestic digital industry and reduce disadvantages in the global digital marketplace. Second, simply increasing the openness of the digital economy may not change the situation where digital technology and data resources are controlled by a small group of advanced players. Rather, it risks exacerbating asymmetries in wealth and resource distribution.^[82] Third, developing countries must consider not only how the digital economy can benefit them, but also its potential impact on traditional economies, which contribute a substantial portion of their GDP.

On the other hand, even the advanced players differ in the composition and nature of domestic digital economies. This may explain why they propose different digital trade rules. The following illustrates this point using the US, China and the EU as examples.

Half of the world’s 10 largest internet companies by revenue are US companies.^[83] These companies are Google, Netflix, Meta, PayPal and Amazon.^[84] Most of these companies are digital content or service providers whose businesses focus on online search, content and social networking services. Therefore, it is not surprising that the US proposed digital trade rules are centred on digital content or services. Meanwhile, these US companies are global players. Their global operations require them to locate their computing facilities and data centres in strategic locations around the world.^[85] Thus, their normal operations depend upon the autonomy of facility locations and the free flow of information.^[86] Consequently, they will lobby their government to negotiate digital trade rules that oppose data localisation requirements and promote the free flow of data. Moreover, most of these US companies are exporters of digital products. This may explain why the US strongly opposes foreign digital services taxes.^[87]

The rest of the world’s top 10 internet companies are all Chinese, including JD.com, Alibaba, Meituan, Tencent and ByteDance. Three of these companies, namely JD.com, Alibaba and Meituan, primarily supply physical goods via the internet. This is possibly the reason China advocates digital trade rules focusing on digitally enabled goods trade. On the other hand, some of the Chinese companies’ businesses may overlap with the US companies’. One example is Tencent, which provides social networking services and is often referred to as China’s Meta. Similarly, Alibaba sells physical goods, as does Amazon. However, the Chinese companies are not exactly competing with their US counterparts. Instead, they enjoy a much lower global presence than their US counterparts and their operations are almost entirely focused on the Chinese market. For example, in 2019, Tencent’s overseas revenues only accounted for 4.43% of its total revenues.^[88] While the share rose to 7.03% in 2020^[89] and 9.38% in 2022, it remained below 10% in 2023, at 9.56%.^[90] Similarly, Alibaba generated more than 90% of its revenue from the Chinese market in 2023.^[91] Moreover, ByteDance, the privately held company behind the immensely popular video-sharing app TikTok, generated over 80% of its revenue in China in 2022.^[92] China’s market is large enough to support these homegrown firms’ development, whilst the growing openness of digital trade will result in more intense competition. Therefore, the Chinese companies are less likely to lobby their government to make additional commitments to digital trade beyond the WTO framework. Furthermore, they conduct their business and establish their facilities mainly in China. Therefore, they may be less interested in free cross-border data movement.

By comparison, none of the top 10 global internet companies come from the EU. This is possibly a result of the relatively open European market. EU internet firms compete directly with US internet firms and cannot thrive in a shielded environment as Chinese firms can. Theoretically, indiscriminately imposing high data processing duties by the EU on both local and foreign firms may help the former gain competitive advantages, because the former have business models more familiar with the local regulatory environment and do not have to pay high compliance costs for measures like data localisation requirements. This can be an economic factor contributing to the EU’s hesitancy in committing to cross-border data flows. Meanwhile, the EU has a large digital market with massive internet users. The EU is more likely to be a consumer of digital content or services than an exporter.^[93] This explains why some EU members, such as France, have conflicting views with the US on foreign digital services taxes.^[94]

B Diverse Domestic Regulatory Frameworks

Firstly, it is so common for a country or region transplanting rules from its domestic regulatory or legal framework into trade agreements. The same applies to digital trade rules. For example, the US introduced the Fair Information Practices Principles to the USMCA,^[95] which originated in the US and underpins its privacy regime.^[96] Domestic regulatory and legal regimes are often well developed before relevant international rules occur.^[97] Once a regime has been established, continuous consolidation makes it stable and conducive to policy objectives. In contrast, departing from the previous path could incur expensive reversal costs.^[98]

Secondly, the impact of international rules on domestic regulatory and legal systems can affect a country or region’s willingness to commit to the rules.^[99] The US, EU and China have been compared to the ‘liberaliser’, ‘regulator’ and ‘mercantilist’ in the digital economy, respectively.^[100]

The liberaliser’s governance of domestic digital trade depends largely on industry self-governance rather than government regulation.^[101] Even if international digital trade rules cover a wide range of matters, the US regulatory framework would not be significantly affected. Therefore, the US supports more ambitious international digital trade rules.

By comparison, both the ‘regulator’ EU and the ‘mercantilist’ China emphasise government intervention in regulating domestic digital trade, although to different degrees.^[102] Even if digital trade rules at the international level cover only a limited number of issues, they may have a drastic impact on the regulatory frameworks of the EU and China. Consequently, China and the EU appear more conservative regarding digital trade liberalisation.

Overall, different domestic regulatory frameworks may result in disagreements between the US, China and the EU on various topics, such as the scope of international digital trade rules.

Specifically, the US offers a lax legal environment for the development of its domestic digital economy. There are numerous examples of the ‘permissive legal framework’.^[103] For example, the US has extended First Amendment freedom of speech to cyberspace.^[104] Likewise, the Telecommunications Act of 1996 codifies the US policy of preserving a vibrant and competitive free market for the ‘internet and other interactive computer services’.^[105] It also exempts internet companies from liability arising from content posted by a third party on their platforms.^[106] Furthermore, the Digital Millennium Copyright Act provides internet companies with safe harbours against copyright infringement liability.^[107] Unsurprisingly, the US internet companies growing up in such a permissive legal environment will expect to extend their domestic ‘legal privileges’ to the global marketplace. This may explain why the US calls for a free and open internet and deregulation internationally.

In contrast, heavy government regulation has long been a feature of the Chinese digital economy. Depending on the regulated object, the regulation can be divided into two categories: facility regulation and content regulation.

An example of the facility regulation is the Interim Regulation on the Management of International Networking of Computer Information (‘Interim Regulation’).^[108] The Interim Regulation was enacted in 1996 and has been in force since, albeit with minor amendments in 1997 and 2024. Considering that the internet was introduced in China in 1994, it has been in place for quite some time. Article 6 of the Interim Regulation provides that all international network access should travel through an entrance provided by a specific government agency.^[109] It also prohibits the erection or use of other gateways by any institution or individual.^[110] Moreover, it declares the State Council’s monopoly on approving new internet networks and punishes non-compliance with hefty fines.^[111]

On the other hand, content regulation is represented by the Administrative Measure for Internet Information Services (‘Administrative Measure’).^[112] Unlike the US legislation, the Administrative Measure requires internet information service provider to ensure the legitimacy of all contents, including those generated by users.^[113] Liability arises from the generation, replication and dissemination of various contents, such as information that jeopardises national security, breaches state secrets or undermines state interests.^[114] The illegal information listed is not only vaguely phrased but also non-exhaustive.^[115] This leaves ample room for government intervention.

The regulations mentioned above are just the tip of the iceberg. In short, the development of Chinese digital economy is under tight restrictions. However, the restrictions, in a sense, benefit local companies, some of which have grown into the world-leading companies.^[116] They reserve the large home market for domestic companies, shielding them from global competitors who hardly adapt to the constrictive legal framework. Moreover, most existing restrictions may be justified by exceptions under the WTO legal framework.^[117] Therefore, there is no reason to expect China to venture far beyond the WTO legal framework any time soon and depart from the track it has followed in the past.

Furthermore, EU regulations pursue multiple objectives. Ideally, digital trade regulation should maximise benefits and adequately safeguard digital trade liberalisation. However, due to the instability and vulnerability of cyberspace, regulatory objectives need to encompass various matters, such as privacy protection and national security, in addition to maximising benefits. Some form of international data-transfer restrictions can be necessary in the interest of public policy, particularly to ensure cybersecurity.^[118] On the other hand, the regulatory objectives of the EU are likely to be more diverse due to its complex membership. Conciliating EU members’ different political aspirations and reaching a regulation like the GDPR are challenging, let alone harmonising EU members’ interests with others’ and concluding trade agreements. Consequently, despite embracing internal free movement of data, the EU is still far from completely free data flow. Moreover, the GDPR bearing EU values can generate the ‘Brussels Effect’^[119] and is applicable extraterritorially.^[120] The EU may be reluctant to include matters within its control in international digital trade rules.

Ⅳ The Responses to the Fragmentation

As discussed above, international digital trade rules are fragmented. Meanwhile, it is unrealistic to eliminate the fragmentation, which symbolises pluralism. Nevertheless, measures can be taken to mitigate the fragmentation, such as integrating the rules into WTO legal frameworks with complements by RTAs.

A Situating a Multilateral Digital Trade Agreement under the WTO Framework

In the digital economy era, the WTO multilateral trading system remains the optimal venue to govern digital trade-related issues. As the world’s largest intergovernmental trade organization and the most significant multilateral trading mechanism, the WTO has numerous advantages, some of which are mentioned below.

To begin with, the WTO is capable of undertaking a wide range of measures to promote the digital economy in developing countries and to address their concerns about development. For example, the WTO can provide trade finance and technical assistance to developing countries to support medium, small, and micro-sized companies in the digital economy of developing countries. Similarly, it could initiate more dialogue in the Trade and Development Commission to facilitate information sharing. Such measures could generate political goodwill. More importantly, they could improve developing countries’ capacity and expertise to undertake reforms, such as expanding trade liberalisation commitments or creating legal frameworks that are more in line with developed countries’ standards on issues such as data protection.^[121]

Next, the multilateral forum is more sensible, from the perspective of the digital economy’s demands for seamlessness and interoperability alone, even without a thorough consideration of the pros and cons of preferentialism and multilateralism.^[122]

Moreover, the WTO enjoys unrivalled prestige with regard to dispute settlement and rule-making in traditional trade, so does it in the fields of digital trade and e-commerce. In the pre-digital economy era, the WTO had an undisputed voice in the governance of traditional trade. According to path dependency theory, the multilateral trading system deserves to be prioritised if it is possible to address issues related to digital trade.^[123] In fact, policy makers are not capable of starting a fresh from the bottom and make new digital trade rules on a clean slate due to high reversal costs. Instead, they can only fix the existing global trading regime, especially the WTO legal framework.

In short, the WTO remains a vital starting point for the development of a digital trade regime, despite its current difficulty in providing digital trade rules. Accordingly, this paper proposes that a multilateral digital trade agreement be situated within the WTO legal framework to mitigate the fragmentation of international digital trade rules.

On the other hand, situating a multilateral digital trade agreement under the WTO umbrella can be difficult, despite the possibilities.^[124] The multilateral negotiation of digital trade rules must discuss not only trade liberalisation issues, such as the free flow of data, but also a wide range of matters, such as rights protection (e.g. privacy protection), national security, and the public interest. Furthermore, it has to harmonise rules under different jurisdictions’ legal frameworks and numerous trade treaties.

Given the difficulties of multilateral negotiations, this paper suggests discarding excessively ambitious negotiating objectives. Instead, the negotiations should focus on the cross-border data flows that underpin digital trade and seriously consider what matters should be governed by international digital trade rules.

Firstly, the future multilateral digital trade agreement should not apply to every digital trade-related matter. According to John H Jackson, regulating cross-border economic behaviour is the fundamental subject of international economic law.^[125] Therefore, some digital trade-related matters should be reserved for domestic regulation. Furthermore, only domestic measures directly affecting cross-border data flows will be regulated by the international rules.

Secondly, even if a digital trade-related matter can be regulated by international law, setting rules in trade agreements on the matter is not necessarily optimal. Compared to domestic regulation, international regulation can be auxiliary or secondary due to its limited power and objectives. Countries tend to prioritise domestic regulation when correcting market failures in cross-border data flows, either for sovereignty safeguards or specific policy objectives. In contrast, international rules are often used as a backup to address bits and pieces left by inadequate domestic regulation.

Thirdly, this paper suggests the negotiating parties to realise that laying down rules for digital trade in trade agreements is not the only measure to reconcile different domestic measures. While different jurisdictions may be able to reach an agreement on the regulation of cross-border data, they may find it difficult to agree on the minimum standards for (personal) data protection. Consequently, as a more common practice, many jurisdictions harmonise their domestic measures with others’ by reaching and maintaining ‘reciprocal and mutually advantageous arrangements’.^[126] For example, the European Commission granted Japan an adequacy decision allowing EU-Japan free data movement, while the Japanese Personal Information Protection Commission issued an equivalent decision to the EU.^[127] Such a reciprocal arrangement created the world’s largest area for free flow of data across borders even before the EU and Japan agreed to include commitments to cross-border data transfer in their EPA.

Finally, this paper recommends that future multilateral digital trade agreements adopt a restrained globalisation strategy rather than a hyper-globalisation strategy. The restrained globalisation strategy places international digital trade rules in a complementary and ancillary position to domestic regulations and does not attempt to govern every aspect of digital trade. In fact, this strategy has been adopted by multilateral trade regulation represented by the WTO Agreements. It takes into account the heterogeneity of digital economies across countries and regions and respects national sovereignty. On the other hand, adopting this strategy implies that jurisdictions will still be able to incorporate new digital trade-related matters into established multilateral, regional or bilateral trade regimes in the future. Moreover, since jurisdictions could use their familiar regimes, coordination and cooperation costs could be reduced and conflicts arising from divergent political objectives could be mitigated.

Contrary to the hyper-globalisation envisioned by trade liberalism, the strategy of restrained globalisation cannot eliminate digital trade barriers. However, the real question is whether free cross-border data flows are justified per se?^[128] If the answer is no, the fluidity of data may not be a sufficient reason to exempt cross-border data flows from domestic regulations. Consequently, cross-border data movement will likely be subject to domestic regulations in different jurisdictions, as with other economic activities.

B Testing New Rules in Bilateral and Regional Venues

Increasing rules-making at regional or bilateral venues does not mitigate digital trade rules fragmentation. Instead, multiple and overlapping RTAs can increase rule fragmentation, as each RTA is signed by a handful of nations rather than 164 WTO members. They also exacerbate the asymmetries in technology and wealth.^[129] Consequently, the digital economy will be more disparate between developing and developed countries, resulting in increased divergences concerning digital trade rules. Furthermore, massive amounts of rules at the regional or bilateral level complicate the international digital trading system. This may result in greater difficulty in harmonising different regional trading systems in the future and a higher cost of digital trade due to disparities in market access conditions.

Nevertheless, RTAs can complement the WTO legal framework and serve as a ‘metaphorical sandpit’ for testing new digital trade rules and arrangements.^[130] As a matter of fact, RTAs partners have made significant progress in addressing digital trade-related issues when the WTO is yet to do so comprehensively. RTAs partners have created and utilised rules and arrangements to overcome deficiencies in WTO rules and to address specific issues raised by the WTO Work Programme on Electronic Commerce.^[131] They have also discussed WTO-extra issues that have never been explored in the WTO context.^[132] As an example, the CPTPP has achieved significant improvements over the WTO in matters relating to data and privacy protection, data flows and data localisation.^[133] Furthermore, RTAs have not only facilitated digital transactions, but also online business in general, which will promote digital trade.^[134] Overall, RTAs provide more explicit and detailed rules, developing a tailor-made regime for digital trade. In the future, the growing network of RTAs could provide new material for multilateral negotiations on digital trade rules. Each jurisdiction should contemplate ways of testing discrete digital trade rules and arrangements in RTAs and then attempt to multilateralise their progress.^[135]

Ⅴ Conclusion

While the WTO is not yet well equipped to govern digital trade, digital trade rules have rapidly increased in various frameworks, particularly regional ones. However, different groups of jurisdictions have established different digital trade regimes through RTAs. Specifically, the US, the EU and China, as well as their respective allies, uphold various digital trade rules that differ in terms of the scope of coverage, the definition of trade barriers and the relationship with WTO rules. As a result, international digital trade law is split into discrete legal islands.

Different domestic digital economies and regulatory frameworks across jurisdictions explain why they favour varying digital trade rules. The relatively underdeveloped digital economies of developing countries have led to more conservative approaches to digital trade liberalisation. Moreover, even advanced players, including the US, China and the EU, have distinct digital economies, prompting them to advocate different digital trade rules. On the other hand, the impact of existing international rules on domestic regulatory frameworks often affects a country’s or region’s willingness to accept commitments to liberalise digital trade. Meanwhile, transplanting domestic rules into trade agreements is common. Therefore, digital trade rules usually reflect domestic regulatory frameworks.

To mitigate the fragmentation, a multilateral digital trade agreement should be established within the WTO legal framework. Multilateral negotiations on digital trade rules, however, are challenging, albeit possible. Negotiators should focus on the cross-border flow of data and consider the boundaries of international digital trade rules. Moreover, RTAs can serve as a venue for experimenting with new digital trade rules. Rules under RTAs can complement those in the WTO and should be multilateralised in the long run.

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^* LLM, Melbourne Law School, the University of Melbourne. The author wishes to thank Dr José-Miguel Bello y Villarino and Emeritus Professor Stephen Graw for their valuable comments.

^[1] OECD, WTO and IMF, Handbook on Measuring Digital Trade: Version 1 (Report, 2019) 20 <https://www.oecd.org/sdd/its/Handbook-on-Measuring-Digital-Trade-Version-1.pdf>.

^[2] Work Programme on Electronic Commerce, WTO Doc WT/L/274 (25 September 1998, adopted 30 September 1998) para 1.3.

^[3] OECD et al, Handbook on Measuring Digital Trade: Second Edition (Report, 2023) 13 <https://www.oecd.org/sdd/its/Handbook-on-Measuring-Digital-Trade.htm>.

^[4] See, eg, Joint Statement on Electronic Commerce — Communication from Canada, WTO Doc INF/ECOM/29 (9 May 2019).

^[5] See, eg, Emmanuelle Ganne, Can Blockchain Revolutionize International Trade? (World Trade Organization, 2018).

^[6] Javier López González, Silvia Sorescu and Pinar Kaynak, ‘Of Bytes and Trade: Quantifying the Impact of Digitalization on Trade’, OECD iLibrary (OECD Trade Policy Papers No 273, 5 May 2023) 7 <https://www.oecd-ilibrary.org/trade/oecd-trade-policy-working-papers_18166873>.

^[7] UNCTAD, Digital Economy Report 2019 (Report, 2019) 65 <https://unctad.org/system/files/official-document/der2019_en.pdf>.

^[8] OECD et al (n 3) 14.

^[9] UNCTAD, ‘International Trade in Digitally-deliverable Services, Value, Shares and Growth, Annual’ (Web Page, 2023) <https://unctadstat.unctad.org/datacentre/>.

^[10] Patrick Leblond, ‘Uploading CPTPP and USMCA Provisions to the WTO’s Digital Trade Negotiations Poses Challenges for National Data Regulation: Example from Canada’, in Mira Burri (ed), Big Data and Global Trade Law (Cambridge University Press, 2021) 301, 303.

^[11] Simon J Evenett and Johannes Fritz, Emergent Digital Fragmentation: The Perils of Unilateralism (CEPR Press, 2022) 17. Digital fragmentation implies the digital environment is splintering or breaking up into loosely coupled islands of connectivity: at 16.

^[12] Felicity Deane et al, ‘Trade in the Digital Age: Agreements to Mitigate Fragmentation’ (2024) 14(1) Asian Journal of International Law 154, 155.

^[13] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) annex 1B (‘General Agreement on Trade in Services’) (‘GATS’).

^[14] Ibid art Ⅰ.

^[15] See, eg, Australia — Schedule of Specific Commitments, WTO Doc GATS/SC/6 (15 April 1994).

^[16] See, eg, Panel Report, United States — Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WTO Doc WT/DS285/R (10 November 2004); Panel Report, China— Measures Affecting Trading Rights and Distribution of Audiovisual Entertainment Products, WTO Doc WT/DS363/R (12 August 2009).

^[17] Ibid.

^[18] OECD et al (n 3) 13.

^[19] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) annex 1A (‘General Agreement on Tariffs and Trade 1994’).

^[20] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) annex 1A (‘Agreement on Trade Facilitation’).

^[21] Susan Ariel Aaronson and Patrick Leblond, ‘Another Digital Divide: The Rise of Data Realms and its Implications for the WTO’ (2018) 21(2) Journal of International Economic Law 245, 251.

^[22] Mira Burri, ‘The International Economic Law Framework for Digital Trade’ (2015) 135(2) Zeitschrift für Schweizerisches Recht 10.

^[23] Work Programme on Electronic Commerce, WTO Doc WT/L/274 (25 September 1998, adopted 30 September 1998).

^[24] Declaration on Global Electronic Commerce, WTO Doc WT/MIN(98)/DEC/2 (25 May 1998) (Ministerial Declaration).

^[25] The moratorium was recently extended at the 13^th Ministerial Conference. However, this extension faced strong opposition from several developing countries including Indonesia, India and South Africa. See Work Programme on Electronic Commerce — Communication from India and Indonesia, WTO Doc WT/MIN(24)/W/7/Rev.1 (23 February 2024); Work Programme on Electronic Commerce — Communication from South Africa, WTO Doc WT/GC/W/911 (1 December 2023). Unless extended further, the current moratorium will end at the next WTO Ministerial Conference scheduled for 2026. See Work Programme on Electronic Commerce, WTO Docs WT/MIN(24)/38 and WT/L/1193 (4 March 2024, adopted 2 March 2024).

^[26] Joint Statement on Electronic Commerce, WTO Doc WT/MIN(17)/60 (13 December 2017).

^[27] See, eg, Joint Statement on Electronic Commerce — Communication from the United States, WTO Doc INF/ECOM/23 (26 April 2019).

^[28] Joint Statement on Electronic Commerce — Communication from the European Union, WTO Doc INF/ECOM/22 (26 April 2019).

^[29] ‘Impossible cases’ are cases that start, proceed and/or end by being excessively contentious, difficult or complex. See Cherie O’Neal Taylor, ‘Impossible Cases: Lessons from the First Decade of WTO Dispute Settlement’ (2007) 28 University of Pennsylvania Journal of International Economic 309, 316-17.

^[30] Jean Galbraith, ‘United States Continues to Block New Appellate Body Members for the World Trade Organization, Risking the Collapse of the Appellate Process’ (2019) 113(4) American Journal of International Law 822, 822.

^[31] Under the privacy exception, trade restrictions necessary to protect ‘the privacy of individuals in relation to the processing and dissemination of personal data’ are permissible: GATS (n 13) art XIV(c)(ii).

^[32] Deane et al (n 12) 177.

^[33] Mira Burri, ‘The Regulation of Data Flows Through Trade Agreements’ (2017) 48(1) Georgetown Journal of International Law 407, 443.

^[34] WTO, ‘RTAs currently in force’, Regional Trade Agreements Database (Web Page) <https://rtais.wto.org/UI/charts.aspx>.

^[35] Regional Comprehensive Economic Partnership Agreement, signed 15 November 2020, [2022] ATS 1 (entered into force 1 January 2022) (‘RCEP Agreement’).

^[36] Agreement between the United States of America, the United Mexican States and Canada, [2020] CTS 2020/5 (entered into force 1 July 2020) (‘USMCA’).

^[37] Australia-Singapore Digital Economy Agreement, signed 6 August 2020, [2020] ATS 13 (entered into force 8 December 2020).

^[38] Ibid art 31.

^[39] OECD et al (n 3) 14.

^[40] Merit Janow and Petros Mavroidis, ‘Digital Trade, E-commerce, the WTO and Regional Frameworks’ (2019) 18(Supplement) World Trade Review S1, S1.

^[41] Manfred Elsig and Sebastian Klotz, ‘Data Flow-Related Provisions in Preferential Trade Agreements: Trends and Patterns of Diffusion’, in Mira Burri (ed), Big Data and Global Trade Law (Cambridge University Press, 2021) 42, 53.

^[42] Henry Gao, ‘Digital or Trade? The Contrasting Approaches of China and US to Digital Trade’ (2018) 21(2) Journal of International Economic Law 297, 316.

^[43] USMCA (n 36).

^[44] Jens Hillebrand Pohl, ‘International Data Transfers and Cybersecurity: Three Regulatory Approaches and Their Implications’, in Tomoko Ishikawa and Yarik Kryvoi (eds), Public and Private Governance of Cybersecurity: Challenges and Potential (Cambridge University Press, 2023) 134, 151.

^[45] Comprehensive and Progressive Agreement for Trans-Pacific Partnership, signed 8 March 2018, [2018] ATS 23 (entered into force 30 December 2018) (‘CPTPP’). For a discussion of the differences between the ‘Digital Trade’ chapter of the USMCA and the ‘Electronic Commerce’ chapter of the CPTPP, see Leblond, ‘Uploading CPTPP and USMCA Provisions to the WTO’s Digital Trade Negotiations Poses Challenges for National Data Regulation’ (n 10) 309-11.

^[46] USMCA (n 36) art 19.1.

^[47] Gao (n 42) 316.

^[48] Ibid.

^[49] RCEP Agreement (n 35) arts 12.5, 12.6.

^[50] See, eg, Free Trade Agreement between the Government of Australia and the Government of the People’s Republic of China, signed 17 June 2015, [2015] ATS 15 (entered into force 20 December 2015) ch 12 (‘ChAFTA’).

^[51] RCEP Agreement (n 35) art 12.14.3(b).

^[52] Ibid art 12.15.3(b).

^[53] Ibid arts 12.14.3(a), 12.15.3(a).

^[54] Patrick Leblond, ‘Digital Trade: Is RCEP the WTO’s Future?’, Centre for International Governance Innovation (Web Page, 23 November 2020) <https://www.cigionline.org/articles/digital-trade-rcep-wtos-future/>.

^[55] RCEP Agreement (n 35) art 12.3.

^[56] Ibid.

^[57] Agreement between the European Union and Japan for an Economic Partnership, signed 17 July 2018, [2018] OJ L 330 (entered into force 1 February 2019) (‘EPA’).

^[58] Ibid ch 8.

^[59] Ibid art 8.70.

^[60] Leblond, ‘Uploading CPTPP and USMCA Provisions to the WTO’s Digital Trade Negotiations Poses Challenges for National Data Regulation’ (n 10) 304-13.

^[61] ChAFTA (n 50) arts 12.1, 12.5.

^[62] EPA (n 57) art 8.78.

^[63] Regulation (EU) 2016/679 of The European Parliament and of The Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46/EC [2016] OJ L 119/1 (‘GDPR’).

^[64] USMCA (n 36) arts 19.6, 19.8, 19.10, 19.12, 19.16.

^[65] Gao (n 42) 317.

^[66] Work Programme on Electronic Commerce: Communication from the People’s Republic of China and Pakistan, WTO Doc JOB/GC/110/Rev.1 (16 November 2016).

^[67] Leblond, ‘Uploading CPTPP and USMCA Provisions to the WTO’s Digital Trade Negotiations Poses Challenges for National Data Regulation’ (n 10) 313.

^[68] EPA (n 57) art 8.73.

^[69] USMCA (n 36) art 19.16.

^[70] Ibid art 19.12.

^[71] ‘EU and Japan conclude landmark deal on cross-border data flows at High-Level Economic Dialogue’, European Commission (Press Release, 28 October 2023) <https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5378>.

^[72] ‘European Commission Adopts Adequacy Decision on Japan, Creating the World’s Largest Area of Safe Data Flows’, European Commission (Press Release, January 2019).

^[73] Svetlana Yakovleva, ‘Personal Data Transfers in International Trade and EU Law: A Tale of Two “Necessities”’ (2020) 21(6) Journal of World Investment and Trade 881, 889.

^[74] Some scholars use ‘discrete legal islands’ as a metaphor for the fragmentation of international law. See, eg, Tamar Megiddo, ‘Beyond Fragmentation: on International Law’s Integrationist Forces’ (2019) 44(1) Yale Journal of International Law 115, 119.

^[75] See, eg, Henry Nau, ‘Domestic Trade Politics and the Uruguay Round: An Overview’ in Henry Nau (ed), Domestic trade politics and the Uruguay Round (Columbia University Press, 1989) 1.

^[76] 中国信息通信研究院 [China Academy of Information and Communications Technology], 《2021年全球数字经济白皮书》[White Paper on Global Digital Economy 2021] (Report, August 2021) <http://www.caict.ac.cn/kxyj/qwfb/bps/202108/P020210913403798893557.pdf> .

^[77] Ibid.

^[78] 中国信息通信研究院 [China Academy of Information and Communications Technology], 《2022年全球数字经济白皮书》[White Paper on Global Digital Economy 2022] (Report, December 2021) 10 <http://www.caict.ac.cn/english/research/whitepapers/202303/P020230316619916462600.pdf> .

^[79] The 15 sample countries are the United States, China, Japan, Germany, Singapore, the United Kingdom, France, India, Canada, South Korea, Ireland, Australia, Italy, Brazil and South Africa. See Tsinghua Institute for Global Industry, International Data Corporation and Inspur, The 2022-2023 Global Computing Index (Report, July 2023) 5 <https://www.ieisystem.com/global/file/2023-09-14/16946384123912c916ead8a3cb8ee62018a90521267362c.pdf>.

^[80] Ibid.

^[81] Janow and Mavroidis (n 40) s 4.

^[82] Burri, ‘The Regulation of Data Flows Through Trade Agreements’ (n 33) 444.

^[83] Anish Jangir, ‘List of Largest Internet Companies by Revenue’, Sacnilk (Web Page, 22 December 2022) <https://list.sacnilk.com/article/List_Of_Largest_Internet_Companies_By_Revenue>.

^[84] Ibid.

^[85] Gao (n 42) 317.

^[86] Ibid.

^[87] ‘USTR Announces Next Steps of Section 301 Digital Services Taxes Investigations’, Office of the United States Trade Representative (Press Release, 26 March 2021).

^[88] ‘2020 Annual Report’, Tencent (Report, 2020) 226 <https://www.tencent.net.cn/investors/financial-reports/>.

^[89] Ibid.

^[90] ‘2023 Annual Report’, Tencent (Report, 2023) 193 <https://www.tencent.net.cn/investors/financial-reports/>.

^[91] ‘Fiscal Year 2023 Annual Report’, Alibaba (Report, 2023) <https://www.alibabagroup.com/en-US/ir-financial-reports-financial-results>.

^[92] Eleanor Olcott and Ryan McMorrow, ‘ByteDance Posts Record Profit Despite TikTok Losses’, Financial Times (online, 9 April 2023) <https://www.ft.com/content/b990b325-5af1-4713-b8d0-580b823cad3c>.

^[93] Katherine Karnosh, ‘The Application of International Tax Treaties to Digital Services Taxes’ (2020) 21(2) Chicago Journal of International Law 513, 517.

^[94] Ibid 518.

^[95] USMCA (n 36) art 19.8.3.

^[96] Robert Gellman, ‘Fair Information Practices: A Basic History’, SSRN (Unpublished Manuscript, 6 April 2022) 3 <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2415020>.

^[97] Janow and Mavroidis (n 40) s 3.

^[98] Paul Pierson, ‘Increasing Returns, Path dependence and the Study of Politics’ (2000) 94(2) American Political Science Review 251, 252.

^[99] Janow and Mavroidis (n 40) s 4.

^[100] Jonathan Hillman, ‘The United States, European Union and China Back Competing Rules’, CSIS (Blog Post, 13 April 2018) <https://www.csis.org/blogs/future-digital-trade-policy-and-role-us-and-uk/global-battle-digital-trade>.

^[101] Ibid.

^[102] Ibid.

^[103] Anupam Chander, The Electronic Silk Road: How the Web Binds the World Together in Commerce (Yale University Press, 2013) 57.

^[104] Ibid.

^[105] 47 USC § 230(b)(2) (1996).

^[106] Ibid § 230(c).

^[107] 17 USC § 512 (1998).

^[108] 《中华人民共和国计算机信息网络国际联网管理暂行规定》[Interim Regulation of the People’s Republic of China on the Management of International Networking of Computer Information] (People’s Republic of China) State Council, 1 February 1996.

^[109] Ibid art 6.

^[110] Ibid.

^[111] Ibid arts 7, 14.

^[112] 《中华人民共和国互联网信息服务管理办法》 [Administrative Measures for Internet Information Services] (People’s Republic of China) State Council, 25 September 2000.

^[113] Ibid art 13.

^[114] Ibid art 15.

^[115] Ibid.

^[116] Gao (n 42) 320.

^[117] Susan Ariel Aaronson, ‘What Are We Talking about When We Talk about Digital Protectionism?’ (2019) 18(4) World Trade Review 541, 554.

^[118] Pohl (n 44) 154.

^[119] The ‘Brussels effect’ refers to the phenomenon that standards originating in Brussels regulate global markets: see Anu Bradford, ‘The Brussels Effect’ (2012) 107(1) Northwestern University Law Review 1, 3.

^[120] The GDPR applies not only to businesses established in the EU but also to those based outside the EU that offer goods and services to, or monitor, individuals in the EU: GDPR (n 63) art 3.

^[121] Andrew Mitchell and Neha Mishra, ‘Data at the Docks: Modernizing International Trade Law for the Digital Economy’ (2017) 20 Vanderbilt Journal of Entertainment and Technology Law 1073, 1125.

^[122] Burri, ‘The Regulation of Data Flows Through Trade Agreements’ (n 33) 444.

^[123] Pierson (n 98) 252.

^[124] See, eg, Neeraj Rajan Sabitha, ‘Trade Rules for the Digital Economy: Charting New Waters at the WTO’ (2019) 18 (Supplement) World Trade Review S121.

^[125] John H Jackson, ‘Global Economics and International Economic Law’ (1998) 1 Journal of International Economic Law 1, 12.

^[126] Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867 UNTS 3 (entered into force 1 January 1995) Preamble para 3.

^[127] Yakovleva (n 73) 889.

^[128] Sydney Wolofsky, ‘What’s Your Privacy Worth on the Global Tech Market?’ (2020) 44(4) Fordham International Law Journal 1149.

^[129] Burri, ‘The Regulation of Data Flows Through Trade Agreements’ (n 33) 444.

^[130] Deane et al (n 12) 178.

^[131] Mira Burri and Rodrigo Polanco, ‘Digital Trade Provisions in Preferential Trade Agreements: Introducing a New Dataset’ (2020) 23(1) Journal of International Economic Law 187, 197.

^[132] Ibid.

^[133] Deane et al (n 12) 170.

^[134] Burri and Polanco (n 131) 197.

^[135] Burri, ‘The Regulation of Data Flows Through Trade Agreements’ (n 33) 444.