AUSTRALIA'S GOAL:

Maximise the opportunity for economic growth and prosperity through digital trade

TO ACHIEVE THIS GOAL, AUSTRALIA WILL:

  • Shape an enabling environment for digital trade, including through trade agreements, harmonisation of standards, and implementation of trade facilitation measures
  • Promote trade and investment opportunities for Australian digital goods and services
Digital Trade icon

Digital technologies and the Internet are key drivers of economic growth and innovation. The digital economy has shifted from a niche sector to an essential part of the economy. The line between traditional goods and digital goods is blurring. The Internet makes it easier for consumers and businesses to trade goods, services and information around the world.

Digital trade is not just about buying and selling goods and services online, it is also the transmission of information and data across borders. It relies on the use of digital technologies to facilitate trade and improve productivity, for example through simplified customs procedures. While flows of information and data may not always be for profit, they are essential enablers of digital trade.

Nowhere is the potential for digital trade greater than in our region. For the first time, in 2017 more than 50 per cent of global Internet users were located in the Indo-Pacific. Yet, only 46.4 per cent of households in the Indo-Pacific were connected to the Internet in 2016, so there are vast untapped opportunities for digital trade. Successfully harnessing this opportunity promises economic growth for countries in the region as well as new market opportunities for Australian businesses.

However, this potential can only be realised if countries cooperate to establish an enabling environment for digital trade. Governments must work with the private sector and consumer groups to ensure digital trade policies and norms and rules foster economic growth and security. This work must be practical, evidence-based and consensus driven. It should be coupled with international efforts to expand participation in digital trade across the Indo-Pacific, which will grow markets for Australian businesses and broaden economic development opportunities for all.

Shape an enabling environment for digital trade

Australia is committed to actively shaping global rule-making on digital trade. Australia will advocate for global rules that support digitisation of trade-related practices, build trust and confidence in the online environment, and reduce barriers to digital trade.

Global trade rules should support existing global and regional norms, principles and guidelines. This includes those developed through the United Nations (UN), the World Trade Organization (WTO), the Organisation for Economic Cooperation and Development (OECD), the G20, APEC, and international standards-setting bodies such as the International Organisation for Standardisation. Australia engages in these multilateral forums to cooperate on practical steps that promote digital trade, sharing best practice, and addressing emerging policy issues.

Enable greater access to global markets and a more certain regulatory environment

In addition to influencing trade rules through key international forums, Australia has included 'electronic commerce' chapters in 10 of its 11 concluded free trade agreements. Australia is currently pursuing commitments on digital trade in our bilateral negotiations with Indonesia, Hong Kong and Peru, and with countries participating in the negotiations for a Regional Comprehensive Economic Partnership and the Trade in Services Agreement.

International rules that facilitate the free flow of information and data across borders are also important for promoting digital trade. Data flows now have generated a greater impact on global gross domestic product growth than the global trade in goods. As customs duties on electronic transmissions may restrict the growth of online trade, Australia is committed to a permanent moratorium on customs duties on electronic transmissions.

Digital trade in the World Trade Organization

The World Trade Organization (WTO) is the key multilateral organisation governing international trade. Through its membership, Australia pursues commitments that improve market access for businesses and increase consumer choice, including in digital trade. Australia supports crucial WTO agreements on goods, services and intellectual property, including the Agreement on Trade Facilitation (TFA). Australia also supports the adoption of agreements that encourage WTO members to take on further digital trade and trade facilitation commitments. These include the WTO Information Technology Agreement (ITA) and the Telecommunications Reference Paper.

Australia promotes trade enabling rules and the free flow of information. But we recognise the importance of allowing governments to respond to legitimate public policy concerns, including consumer and privacy protections. Australia encourages international partners to do so transparently and with appropriate consultation (see Support Transparency and Evidence-based Policy Positions).

TABLE 1: This table outlines some of the key provisions Australia pursues in its trade agreements to enable digital trade. These objectives are general, may change in specific negotiations and are negotiated in the context that we are able to accommodate our policy sensitivities, including in regard to health, environment, consumer and privacy protections, and security.
Provision Description
Paperless trading Countries should provide for online availability of import and export documentation and electronic submission of those documents
Electronic authentication Countries should not deny a signature on the basis it is in electronic form, and should adopt a flexible approach to authentication technologies
Online consumer protection Countries should provide the same protections for online consumers as they do for any other consumer
Online protection of personal information Countries should adopt or maintain a legal framework to protect the personal information of electronic commerce users from unauthorised disclosure
Unsolicited commercial electronic messages (spam) Countries should adopt or maintain measures to allow consumers to opt out of receiving unwanted commercial messages (for example email and SMS) from various sources and to provide that businesses only send such messages with the expressed or inferred consent of the consumer with the source of the messages identified
Customs duties on electronic transmissions Countries should continue the practice of not applying customs duties to electronic transmissions
Domestic regulatory frameworks / domestic electronic transaction frameworks Countries should adopt or maintain legal frameworks consistent with the principles of the UN Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce (1996) and the UN Convention on the Use of Electronic Communications in International Contracts (2005)
Localisation of computing facilities Countries should not require businesses operating in their territory to locate computing facilities (including computer servers and storage devices for processing or storing information for commercial use) within the country's borders
Cross-border transfer of information by electronic means Countries should allow cross-border transfers of information by electronic means
Disclosure of source code Countries should not require the transfer of or access to mass-market software source code as a condition for the import, distribution, sale or use of software
Cooperation Governments should cooperate on areas of mutual interest in digital trade including on cyber security matters
Elimination of customs duties on technological products Countries should eliminate customs duties on technological business and consumer products through participation in the Information Technology Agreement, or products covered by that agreement
Trade facilitation commitments Countries should continue to implement commitments made in the Trade Facilitation Agreement and endeavour to build on those commitments to ensure the efficient movement of goods across borders
Commitments on performance requirements Countries should not require technological transfers as a condition of investing in another country

AUSTRALIA WILL:

1.01 - Advocate for further digital trade liberalisation and facilitation through free trade agreements and participation in the WTO, OECD, APEC and G20

Harmonise standards

An enabling environment for digital trade requires clear standards. Australia's interests in the development of standards is discussed in the Cyber Security chapter. However, developing these standards in isolation will not achieve the desired outcome. Standards need to be harmonised between countries to improve the conditions for global digital trade by making it easier to do business across borders.

Just like global trade rules, international standards need to be industry-led and technology-neutral. In particular, Australia supports the development of globally interoperable Internet standards and associated reference architecture, as well as ISO 27000 Information Security Management Systems standards.

To reduce the need for burdensome regulation, Australia also supports increased cooperation between national standards bodies and regulatory agencies across the Indo-Pacific. Australia will further reduce barriers to trade by proactively harmonising standards and promoting international trade across the Indo-Pacific.

AUSTRALIA WILL:

1.02 - Support capacity building projects in the Indo-Pacific to encourage the harmonisation of international standards for digital goods, building trust and confidence in digital trade

Trade facilitation

Australia supports practices that improve the efficiency of trade conducted electronically, including through the use of digital technologies, such as paperless trading and electronic authentication (see Table 1). Australia will continue to support trade facilitation in key international forums. This includes exploring the trade-enabling and cost reduction potential of emerging technologies such as Blockchain. Australia also recognises that strong cyber security builds trust in cyberspace and facilitates digital trade.

AUSTRALIA WILL:

1.03 - Oppose barriers to digital trade and advocate for implementation of the WTO Trade Facilitation Agreement through bilateral representations and involvement with WTO committees and councils, APEC and the G20

1.04 - Design and trial an electronic Secure Trade Lane with New Zealand to provide benefits for trusted traders in both countries

Support regulatory cooperation

Regulators are responsible for ensuring fairness and transparency in markets and establishing an enabling environment for digital innovation. Cooperation between regulators is important for supporting digital trade. It can build trust and overcome uncertainty and other barriers to the growth of digital trade. Regulatory cooperation in the financial technology sector is already underway and has yielded early successes (see International Efforts of the Australian Securities and Investment Commission, below).

International efforts of the Australian Securities and Investments Commission (ASIC)

Within the Financial Technology (FinTech) sector, ASIC has formal innovator business referral arrangements with its counterparts in the United Kingdom, Singapore, Malaysia, Japan and Hong Kong. ASIC also has information sharing agreements with Kenya's Capital Markets Authority and ASIC's Indonesian counterpart, Otoritas Jasa Keuangan (OJK). These agreements enhance Australian capacity building programs in the region, specifically the Australia-Indonesia Partnership for Economic Governance, through direct regulator-to-regulator transfer of knowledge and experience. ASIC has also provided assistance via multilateral programs such as the Mekong Business Initiative and the APEC Financial Regulators Training Initiative, and through direct participation in the inaugural FinTech Regulation Bootcamp held in Singapore in October 2016.

AUSTRALIA WILL:

1.05 - Promote regulatory cooperation and coherence through Australia's bilateral exchanges, the Australian free trade agreement agenda, Aid for Trade activities, as well as engagement in APEC and G20

Support transparency and evidence-based policy positions

Australia is committed to leading by example on stakeholder consultation and transparency in policy-making. Appropriate multi-stakeholder consultations help ensure well-targeted policy responses to the challenges and opportunities of digitisation. Australia will continue to hold regular consultations with industry on digital trade and invite submissions from the private sector when developing new digital trade rules. Similarly, Australia encourages other countries to consult with businesses when developing new trade laws and policies.

More work needs to be done to accurately measure digital trade. Understanding the current uptake of digital technologies by micro, small and medium enterprises, and the barriers to their digital participation, will better inform policy. Australia is committed to working towards internationally consistent and robust measurement of digital trade.

AUSTRALIA WILL:

1.06 - Support public-private engagement on emerging digital trade issues in multilateral forums, including the Business 20 and the APEC Business Advisory Council

1.07 - Support the G20, OECD and other international research to improve digital trade measurement and develop policy responses

1.08 - Encourage transparency from bilateral partners on domestic legislation that could restrict trade, including through cyber policy dialogues

Promote trade and investment opportunities for Australian digital goods and services

Australia actively promotes its digital goods and services internationally to maximise opportunities for Australian businesses in the booming global digital economy. To attract foreign investment, Australia leverages its global reputation as a trusted and secure place to do business, with robust domestic safeguards, a well-developed services economy and a quality education system.

To maximise international digital trade opportunities for Australian businesses, Australia will develop a whole-of-Government digital economy strategy, led by the Department of Industry, Innovation and Science. Austrade will also create a practical guide for Australian companies exporting in the digital economy. These documents will be developed in close consultation with the private sector.

Private sector engagement on digital trade

The private sector is at the centre of Australia's digital trade efforts. To inform Australia's digital trade promotional activities, the Australian Government will consult closely with the private sector. In addition to consulting with large multi-nationals through APEC and the G20, the Ambassador for Cyber Affairs will establish industry consultations and workshops, including an Industry Advisory Group focused on Australia's international cyber engagement (see the Comprehensive and Coordinated Cyber Affairs chapter).

AUSTRALIA WILL:

1.09 - Develop a guide to exporting in the digital economy, providing practical advice for maximising international opportunities for Australian businesses

1.10 - Develop a national digital economy strategy, which will position Australia to embrace the opportunities presented by digital trade

Executive Summary
2. Cyber Security