Digital Trade Rules in Preferential Trade Agreements: Is There a WTO Impact?

Abstract

For a long time, the World Trade Organization (WTO) has been seen as the privileged multilateral regime to regulate trade. However, given its slow progress in negotiating new trade rules, countries have increasingly shifted their focus to preferential trade agreements (PTAs) since the early 2000s. Focusing on a timely and increasingly important topic (digital trade), we explore how countries’ interactions in the WTO impact on their approaches in designing rules in PTAs. Using newly collected data on digital trade‐related provisions in almost 350 PTAs signed since 2000, we find that countries’ participation in digital trade‐related initiatives at the WTO spill over to the design of their PTAs. More precisely, we show that countries which actively participate in the discussions of the WTO Work Programme on Electronic Commerce are more likely to negotiate ambitious commitments on digital trade in their PTAs. Furthermore, our analysis indicates that countries which participate in the WTO‐based plurilateral Information Technology Agreement (ITA) are more likely to commit to deeper cooperation in the area of digital trade. More broadly, this article contributes to our understanding of the dynamics of regime complexity and how interaction in the multilateral system spills over to regional and bilateral trade regimes.

Who drives the international standardisation of telecommunication and digitalisation? Introducing a new data set

“…Alternatively, future research may rely on this data set to create explanatory variables that potentially help explain the growing policy divide in areas such as data and digital trade governance. Elsig and Klotz (2021), for instance explore how countries' participation in digital trade-related discussions in the WTO influences the way in which they design the digital trade chapters of their trade agreements. Another factor that affects the design of digital trade and telecommunication chapters in trade agreements may be related to countries' participation in the international standardisation processes that telecommunication and other digital technologies rely on.…”

How do digital trade rules affect global value chain trade in services?—Analysis of preferential trade agreements

“…The WTO has long been seen as the privileged multilateral system that regulates trade. However, due to its slow progress in furthering negotiations on new trade rules, countries have increasingly turned to PTAs, such as bilateral or multilateral trade agreements, to promote regional service liberalisation (Elsig & Klotz, 2021b). These agreements help to effectively promote the trade of services (Guillin, 2013; Lee, 2019; Marchetti, 2011).…”

“…the range of the rules) of digital trade rules under all PTAs. This approach adds to the research on the heterogeneity of trade agreements (Elsig & Klotz, 2021a, 2021b; Hofmann et al, 2019; Sun et al, 2022) and enriches our understanding of the impact of deep trade agreements on GVC trade in services.…”

Status-quo enhancing versus status-quo challenging change in global economic governance: the case of China in finance and trade

“…In trade while there is consensus on the existence of regime complexity, there remains a debate over the degree of hierarchy present. 23 In particular, the overlap between the WTO and preferential trade agreements (PTAs) is sometimes used as evidence of the centrality of the WTO in the regime. 24 This is because PTAs often build upon GATT/ WTO rules, adding a new layer of rules which gives states dissatisfied with slow progress at the multilateral level another option.…”