Beijing-Brussels digital and service FTA is a challenge

Driven by new technologies, the global trading landscape is undergoing a profound transformation, with digital and services trade becoming an important engine driving economic growth and innovation. Indeed, digital and services trade is reshaping how countries and businesses interact, creating new opportunities as well as unique challenges. They affect how enterprises coordinate supply chains, how they reach customers, and how innovations such as artificial intelligence are being integrated into the basic workings of global markets and economies.

Given the huge importance of digital and services trade, one would think that deep trade agreements in the field offer the potential for better growth opportunities and long-term, sustainable benefits for the countries involved. Yet while there are significant potential benefits, there are also significant challenges to reaching such an agreement. The technology of digital trade is changing rapidly, making regulators play catch-up, with different regions following different models of regulation and data protection. Also, there is an ongoing policy "re-calibration" as countries integrate their concerns for trade and security linkages into their policy frameworks.

In this context, the formulation of a "deep" China-European Union free trade agreement (FTA) in the domain of digital and services trade is both tempting and problematic. Such an agreement would need to involve comprehensive provisions aimed at lowering digital trade barriers and promoting international cooperation, addressing issues like data localization, data privacy and cross-border data flows, non-discriminatory treatment of digital products, establishing standards for electronic transactions and the protection of intellectual property rights.