Ease of movement of people, capital, services and data across borders
Action 1.1A
The Government will pursue high-quality digital trade liberalisation and facilitation rules through free trade agreements and participation in the WTO, OECD, APEC and G20.
recommendation/s
Encourage the development and harmonisation of high-quality digital standards with key trading partners, including through FTAs, in multilateral fora, and through regulator-to-regulator cooperation. This could include facilitating the development of international digital standards.
When negotiating trade agreements, the approach taken by Hong Kong and Australia in the recently negotiated Australia-Hong Kong FTA should serve as a model of how to lock in free cross-border data flows for the finance sector without mandatory local data storage requirements.
Progress to date
The Australia-Singapore Digital Economy Agreement sets new global benchmarks for trade rules and a range of cooperation initiatives. Key outcomes included commitments on data flows, data localisation, electronic authentication, electronic signature and treatment of source code. It also established a framework for collaboration between FinTech and RegTech (regulatory technology) enterprises and industry bodies to explore business opportunities and develop standards.
The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) represented a significant step forward in agreeing up-to-date commitments on digital trade with Indonesia. Key outcomes include commitments on data flows, data localisation, treatment of source code and transparency in the regulation of digital trade.
Australia has contributed $1 million to support Asia-Pacific Economic Cooperation (APEC) initiatives on digital trade. This includes an APEC project on improving the measurement, regulation and inclusion of the digital economy, the APEC Digital Symposium, and contributing to the APEC Digital Innovation Sub-Fund (Asia Pacific).
The Digital Economy Strategy announced during the 2021-22 Federal Budget sets out how Australia will secure its future as a modern and leading digital economy and society by 2030. It builds on the Government’s existing digital and data initiatives, sets out further actions the Government is taking through the 2021-22 Budget and defines future pathways to 2030.
- Digital infrastructure – to connect business and households
- Cyber security, safety and trust – to protect and build confidence
- Skills and inclusion – to build digital capabilities for the future workforce
- Systems and regulation – to implement smart, modern settings to drive digitalisation
- Trade and international engagement – to open markets and set global standards to ensure Australian businesses, workers and consumers benefit from digital trade.
The Digital Economy Strategy sets out the pathways to guide future actions, set ambitious targets and will be continually renewed to realise our vision of being a leading digital economy and society by 2030. These targets include that over the next five years, Australia will increase the number of digital agreements with like-mined partners.
Australia through its active participation in the OECD Trade Committee and working party has supported the publication of two new OECD reports, mapping commonalities in regulatory approaches to cross-border data transfers and Digital Trade Inventory: Rules, Policies and Principles. These reports contribute to ongoing debates by helping Australian policymakers better identify and respond to emerging challenges arising from digitalisation.
On 2 December 2021, negotiations at the World Trade Organization concluded on the Joint Initiative on Services Domestic Regulation (DR JSI). The initiative is aimed at reducing red tape and administrative costs, and creating a more transparent operating environment for services exporters looking to access overseas markets. After four years of hard work, this is the first new set of services trade rules in a quarter of a century.
The agreement, which comprises 67 WTO Members – including the 27 EU Member States – accounts for over 90% of global services trade. A joint OECD-WTO study calculated that implementation of these rules could generate annual trade cost savings in the range of USD 150 billion for members of the agreement, with important gains in a range of sectors including financial, business, communications and transport services.
For example, when an Australian professional applies for a licence to supply a service in a DR JSI member country; that country commits to providing complete, accurate and publicly available information regarding the application requirements. The country also commits to processing the application in a timely manner and the licence entering into effect without undue delay.
This is how these new rules will make the supply of a service in an overseas market clearer, more predictable and transparent, and ensure that processes are not unduly burdensome on businesses.
“This is a real win for Australian services exporters. We have agreed to cut red tape by reducing complex and costly regulatory burdens in overseas markets,” former Minister for Trade, Tourism and Investment Dan Tehan said in welcoming the agreement.
The Digital Trade Strategy was released on 1 April 2022 to provide a framework for Australia to maximise economic growth by shaping an enabling environment for digital trade. It guides Australia’s practical action as a leader in digital trade. Australia will pursue global digital trade rules that reduce barriers to digital trade and support the growth of an open and competitive economic environment.
The pandemic has underscored the importance of digital trade and technologies in supporting and enhancing business operations across every sector. Digital trade and the technologies that underpin it are fundamental to our economic growth.