Digital trade is a fundamental driver of economic growth and presents significant opportunities as well as challenges for Australian businesses. Expenditure on digital goods and services, skills, equipment and the development and analysis of data are significant sources of economic activity. In turn, these activities are catalysts of the next wave of innovation and entrepreneurship in critical technologies.
Digital trade is not just about buying and selling goods and services online. It also encompasses the sale of products and services through digital technology; the import and export of digital hardware, software and services; and the flow of data across borders.
Australia relies on the use of digital technologies to facilitate trade and improve productivity. This includes through simplified digital customs procedures, e-signatures, e-payments and e-invoicing. Digital trade is an increasingly important way for Australia to trade with the rest of the world. Approximately half of Australian businesses are already engaged in the digital economy in some way, and this number is anticipated to grow.
Shaping an environment that enables digital trade
Australia seeks to shape an international environment that enables digital trade and reinforces the international rules-based trading system. Essential to this is the reduction of digital trade barriers, such as data localisation requirements and data flow restrictions. Australia pursues rules that facilitate trade by electronic means and build trust in the online environment through trade negotiations, including in the World Trade Organization (WTO), bilaterally and with regional groups. Australia advocates for such rules in a range of other international forums including the G20, the Asia-Pacific Economic Cooperation (APEC) and the Organisation for Economic Co-operation and Development (OECD).
Australia is committed to the development of multilateral rules on digital trade, the inclusion of digital trade rules within free trade agreements (FTAs), and is pioneering standalone digital trade agreements. We are chairing the WTO E-commerce Initiative to develop the first set of global digital trade rules, supported by Singapore and Japan as co-convenors. A majority of WTO members, representing well over 90 per cent of world trade, are now engaged in this process.
We advocate for the inclusion of e-commerce and digital trade rules within FTAs. Featuring in 14 of the 16 FTAs concluded by Australia, these rules facilitate trade by electronic means while preserving appropriate regulatory and policy space for Australia on important public policy issues. Subject to exceptions, including for national security, privacy protections, health, environment and prudential reasons, we advocate for rules that:
- support trade by prohibiting data localisation and allowing cross-border data flows
- promote secure and compatible electronic signature and authentication technology
- apply at least equivalent consumer protections online as offline, including in relation to personal information protection and discouraging spam
- create a safe online environment
- prohibit customs duties on electronic transmissions
- prohibit requirements to reveal source code.
Digital trade provisions will continue to be an important part of the FTAs that Australia negotiates. There remains enormous potential for further global digital trade growth. Australia will continue to pursue multilateral, regional and bilateral digital trade discussions.
Data and governance
The data economy, which includes the collection, organisation and exchange of information, is an increasingly valuable area of global trade. Current and emerging critical technologies, such as the Internet of Things and machine learning are increasing the production and consumption of data, and rely on growing datasets to create value through applications such as targeted advertising. As such, data has become a commercial asset and a commodity for trade. This makes it more important than ever to balance the privacy, security and economic implications of the collection, use and transfer of data.
Australia advocates for the importance of data and personal information protection in cross-border data flows, especially where countries may take differing legal approaches to data protection. We will promote interoperability and compatibility between privacy regimes and endeavour to exchange information and best practice between jurisdictions, such as APEC's Cross-Border Privacy Rules system.
Australia recognises that government and industry have mutual responsibilities and interests in maximising the opportunities and mitigating the risks of cross-border data flows. We will continue to work with international partners to work towards compatible online data privacy laws, standards and governance mechanisms to protect data and personal information.