Regulating the digital economy: Are we moving towards a 'win-win' or a 'lose-lose'?
Padmashree Gehl Sampath
#2018-005
The digital economy has been growing by leaps and bounds in recent
years, mostly as a result of new digital technologies that are promoting
a global transformation to industry 4.0. The resulting expansion of
digital trade has sparked off a political and policy controversy on
digital economy and e-commerce, where its boundaries stand and how best
to regulate it. Policy discussions on the topic however do not take into
account the true expanse of digital trade, which encompasses hardware,
software, networks, platforms, applications and data as its core
elements, and stretches the boundaries of e-commerce policy to trade in
goods, services and intellectual property protection. This article
focuses on the challenges in regulating the digital economy, with a
particular focus on development, and offers a discussion of the
interdependency between the economic, social, personal and developmental
aspects of digital trade for developing countries. Section II opens with
a detailed discussion on key digital technologies and their plausible
impacts on employment globally and industrial catch-up of particular
importance to developing countries, to highlight the divisive nature of
digital technologies. Section III then analyses the unfulfilled promise
of a pro-development perspective at the WTO looking at how
multilateralism has currently failed e-commerce. In this section, the
incoherence between digital realities and the policy debates at the WTO
are presented to show how the institution might have become a means to
legitimise national policies of industrialised countries on a universal
level in this important area of policymaking. Norm-setting through FTAs
is also analysed at length in section III of the article, which provides
a comprehensive review of the plurilateral and bilateral policy
developments in e-commerce. The ramifications for developing countries
are discussed in the form of a couple of examples. Section IV presents
some options for developing countries for the future at the national and
international level.
Keywords: digital economy, e-commerce, industry 4.0, digital trade,
robotics and process automation, artificial intelligence, 3D printing,
manufacturing, development, trade, free trade agreements, digital
industrial policy.
JEL Classification: L11, L23, L25, L41, L51, L81, L86, O19, O31, O33, O34, O38