Special Issue: Vol. XIII, No. 1 (Summer ’21)

-

Digital technologies, taken as a broad category of technological inventions and applications, can be said to fall under the rare class of “disruptive technologies” that trigger profound societal transformations. This may demand changes in law and policy that go beyond incremental adjustment and necessitate a rethinking of existing approaches. It is the purpose of this article to explore the interfaces between digitally spurred transformations and how these have been reflected, or not, in global trade law frameworks. The article discusses the current regulatory framework for digital trade: first, by exploring the state of affairs under the auspices of the World Trade Organization (WTO) and second, by analysing the more deliberate regulatory responses to the digital challenge formulated in free trade agreements (FTAs). The article finally seeks to contextualise the existing legal framework and assess its adequacy for the contemporary data-driven economy.

The growth in today’s digital economy has presented numerous tax challenges. Corporate taxation is traditionally built on the notion of physical ‘permanent establishment’ or tangible locational nexus. In a digital economy, services can be rendered everywhere from anywhere. Who should get the first “bite at the apple”? While several countries have adopted a digital service tax to tax revenue or locational rent attributable to market country or the value-creating jurisdiction, these approaches have been fiercely resisted with countries such as the United States pursuing unilateral Section 301 actions. This article explores the complexities of this debate and examines in particular the risks in pursuing unilateral retaliations against legitimate attempts at taxing value creation in this digital economy. In examining this issue, the article discusses the various proposals debated at the Organisation for Economic Co-operation and Development (OECD).

The Internet’s potential to enable micro, small, and medium-sized enterprises (MSMEs) to conduct international commercial transactions has yet to be fully realised. Small enterprises, especially MSMEs based in developing countries, continue to face substantial obstacles to their participation in trade. While ‘International Economic Law’ has evolved amidst rapid globalisation and technological change, developing countries’ MSMEs are frequently unable to achieve the benefits associated with trade liberalisation. As ‘new generation’ agreements introduce further legal complexity in both the number and scope of trade rules, this article investigates Chile’s application of information and communications technology (ICT) to improve the accessibility and functionality of commercial policies. With an emphasis on computational approaches to trade policy design and delivery, the Undersecretary of International Economic Relations (SUBREI) of the Ministry of Foreign Affairs of Chile has launched a pilot programme to contribute to an open repository of rules in a digital form: ‘An Internet of Rules’ (IoR). Along with reference data, the computational expression and online publication of rules, that may be ‘in effect’ or ‘applicable’ to cross-border transactions, can improve access and use by people and machines alike. Against the backdrop of the country’s history of reform and membership in the World Trade Organization (WTO), the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), and the Digital Economy Partnership Agreement (DEPA), the investigation articulates Chile’s ongoing contribution to an IoR as well as the alignment of its policy digitalisation efforts with national development strategies.

The economic and societal impact of Artificial Intelligence (AI) and the consequent race for AI dominance undertaken by several countries around the globe has led to discussions and negotiations on its regulation at the international level. This article focuses on AI-related activities and initiatives at the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO). Given its characteristics and relevance for the economy and society as a whole, AI offers a vantage point to explore the governance models adopted by international organisations. As such, although several international organisations are currently addressing AI, the article will focus mainly on two of them, WIPO and the WTO, as these are the two organisations largely responsible for dealing with questions connected to AI-related innovation, creativity and appropriability (under intellectual property (IP) law and policy) as well as circulation and diffusion (under trade rules concerning AI and data). The article shows that despite historically different governance models, with WIPO featuring open discussions with Members, stakeholders, and civil society, and the WTO relying on a rather State-centred/inter-governmental approach, development at both organisations has led to some convergence. Indeed, comparable activities and initiatives have been launched at both WIPO and the WTO. In any case, given the relevance of, and the link between, IP and trade rules for the development of AI systems (as these systems rely on data that is often traded internationally and, concurrently, produce data when they carry out their tasks), the article argues that only a highly-integrated approach based on strict coordination between these organisations can result in an effective international regulatory framework tackling the most pressing challenges of AI.

Scholarly work on the most recent regulatory approach to digital trade by WTO members, the Digital Economy Partnership Agreement (DEPA), is still rather limited. Attempting to fill the gap in literature, this article seeks to assess the significance of this first stand-alone, monothematic trade agreement which is entirely and exclusively dedicated to measures affecting trade in the digital economy. It does so by comparing DEPA with five of the most recently concluded preferential trade agremeents in order to analyse areas of convergence between the agreements, identify new elements introduced by DEPA and pinpoint potential limits to its coverage of digital trade issues. The article also discusses the pros and cons of negotiating such a sui generis trade agreement.