"Digital central to future trade deals," says City

Agreements to facilitate digital trade between nations should be made central to any future trade deals the UK enters in to, according to a new report from the City of London Corporation.

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David Sapsted

17 June 2021

As the governments of UK and Australia published details of the Agreement in Principle of the trade deal agreed earlier this week, the City authority published a report, 'Past Precedent and Future Opportunities', which "aims to support trade negotiators by providing a financial and professional services' (FPS) view on best practice for digital trade provisions in trade agreements".The report calls on the government to ensure the free movement of financial data is a feature of all future free trade agreements, suggesting the recently agreed UK-Japan Comprehensive Economic Partnership Agreement was a good model to build on.Digital services, says the report, represent a core part of the UK economy, with over 67% of service exports - worth £190.3 billion before the pandemic hit - being digitally delivered.

Read more of David Sapstead's coverage of the UK/Australia trade deal:

"This increase in digitalisation has made it easier for FPS firms to engage in digital trade, raising a whole set of new challenges, not least how this trade is regulated, and whether the current trade rules adequately address trade in the digital age," said the Corporation.Recommendations in the report include a call for the UK to lead cooperation between jurisdictions to enhance regulatory coherence and standards; and for the UK to press the case for greater global cooperation on cybersecurity issues.Catherine McGuinness, the corporation's policy chair, said, “The UK has a unique opportunity to forge a forward-looking and modern digital trade agenda.“With the pandemic accelerating the use of digital services in the financial and professional services sector, the cross border flow of data and information has never been more important.“It is therefore crucial that the UK and its partners across the world ensure that digital trade and the free movement of financial data is a core part of all ongoing trade negotiations.”Following a G7 trade conference last month, ministers issued a communique saying they recognised the multilateral trading system needed to be modernised to reflect changes in the global economy."We agree to advance key issues including trade and the environment, trade and health, and digital trade and to ensure that global trade serves as an engine for inclusive economic growth," the statement said.In the Agreement in Principle on the UK-Australia trade deal published on Thursday, the two governments said they would "commit to ambitious commitments that will increase opportunities for digital trade across all sectors of the economy, while also ensuring world-leading standards for personal data protection and for legitimate public policy objectives".The measures, the UK government said in a statement, would include strong rules on data flows and the prohibition of unjustifiable data localisation requirements, to create a more certain and secure online environment and support increased growth in digital trade between Australia and the United Kingdom.Additionally, said the statement, there would be provisions to ensure the recognition of electronic contracts and signatures and legal frameworks on electronic transactions that facilitate e-commerce.