Digitrade Digest #25
US ASEAN trade talks?, Trade and Tech Council to meet soon, India and UK working on FTA, Digital currency and trade.
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US
Business chief sees good chance for U.S.-ASEAN digital trade talks
Politico: In an interview with Morning Trade, Osius said he was optimistic, based on conversations with officials on both sides, that the Biden administration would soon launch talks with members of ASEAN on a digital trade agreement.
“There are some really amazing opportunities in the digital space,” Osius said. “ASEAN is young. It's tech-savvy. It's online. There are over 380 million people in ASEAN that are younger than 35 years old. That's more than the entire U.S. population. And it’s the fastest-growing internet economy in the world.”
Fourth-largest U.S. export market: The 10 nations in ASEAN have a combined population of 662 million people and a gross domestic product of $3.2 trillion. Last year, the U.S. exported $122 billion worth of goods to the region, making it the fourth-largest U.S. export market.
All 10 ASEAN countries are members of a trade pact with China called the Regional Comprehensive Economic Partnership, and several — Vietnam, Singapore, Malaysia and Brunei — are members of the Trans-Pacific Partnership that the U.S. negotiated and then abandoned after Donald Trump became president.
The Biden administration has no interest right now in rejoining the TPP, to the frustration of many in the business community and in the region.
Still, “I think the administration recognizes that in Asia, trade is strategy,” Osius said “And I think there's a general awareness that ASEAN wants a trade deal and that having a forward-looking trade policy will be very important to revitalizing U.S. influence in Asia.”
Osius also said he believed negotiating a digital trade deal “would not be as heavy a lift as a much broader agreement because much of the content is already there” in other digital agreements in the region.
However, the Biden administration’s “strategic-level understanding of how important this is doesn't wipe away the politics. So I wouldn't raise expectations too high,” he said.
USTR-ASEAN meeting next week: Brunei is hosting the annual ASEAN Economic Ministers meeting beginning today, and the group’s consultations with various trading partners will continue for 10 days. U.S. Trade Representative Katherine Tai and her ASEAN counterparts are expected to discuss prospects for a digital trade agreement and how to strengthen supply chains and sustainability efforts when they meet next week, Osius said.
Dombrovskis: Trade and Tech Council to hold first meeting in Pittsburgh
InsideTrade: U.S. and European Union officials will hold the first meeting of the Trade and Technology Council in Pittsburgh later in September, European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis said on Tuesday.
U.S. and EU officials last month announced that they would hold the first council meeting at the end of September. The council -- launched in June and chaired on the U.S. side by U.S. Trade Representative Katherine Tai, Commerce Secretary Gina Raimondo and Secretary of State Antony Blinken -- will serve as a forum “to coordinate approaches to key global trade, economic, and technology issues and to deepen transatlantic trade and economic relations based on shared democratic values,” according to a joint announcement.
The council will provide an opportunity for the EU to work with “like-minded partners” to develop international standards, “preserve equal competition” and incentivize private investment, Dombrovskis said during a speech at the Tallinn Digital Summit in Estonia this week.
“Together with Secretary Raimondo and other colleagues, we will be inaugurating the Trade and Technology Council later this month in Pittsburgh,” he said. “Our idea is make the digital transformation a success story in terms of transatlantic cooperation.”
Raimondo also spoke during the summit and met with Dombrovskis to discuss the council as well as “the progress of certain working groups under the direction of U.S. and European TTC lead agencies,” according to a readout from Commerce. Raimondo and Dombrovskis committed to work with Tai, Blinken and European Commissioner for Competition Margrethe Vestager to “ensure further progress by working groups towards commercially meaningful outcomes,” the readout said.
U.S. and EU officials have said they will use the first council meeting to focus on one of the most pressing technology issues: semiconductor supply chain vulnerabilities.
The U.S. and the EU face a host of similar technological challenges, Dombrovskis said, pointing to cybersecurity and “the dominant market power of some digital service providers.”
“We share an interest in regulating technologies to protect our consumers and businesses -- as well as upholding our common values,” he said.
The council will focus on an array of “sensitive areas,” Dombrovskis said, pointing to council working groups on information and communications technology security and competitiveness, data governance and secure supply chains. The forum has 10 working groups in total, including groups on technology standards cooperation; climate and green tech; the misuse of technology threatening security and human rights; export controls; investment screening; promoting SME access to and use of digital technologies; and global trade challenges. All working groups have been instructed to meet separately before the September ministerial-level meeting, an EU official recently told Inside U.S. Trade.
The Trade and Technology Council is not the first attempt made by the U.S. and the EU to come together on trade and regulatory outcomes. The two sides launched the Transatlantic Economic Council in 2007 as well as Transatlantic Trade and Investment Partnership negotiations in 2013, which some have criticized for a lack of meaningful deliverables. Some analysts have contended it will take sustained commitment from political leaders on both sides to avoid familiar pitfalls.
The Commerce Department did not announce the Pittsburgh meeting by press time, though its Twitter account retweeted a story on Dombrovskis’ comments.
India
UK, India in 'sweet spot' as trade negotiations begin, says Britain's trade minister
The Economics Time: The UK and India are in a "sweet spot" of global trade dynamics as negotiations for a free trade agreement (FTA) begin in the coming weeks, according to Britain's trade minister in charge of the bilateral talks.
Liz Truss, UK Secretary of State for International Trade, revealed that the public consultation process ahead of the trade negotiations attracted "huge interest" from businesses across the UK and its completion last month means that FTA negotiations can now begin.
Addressing a special reception hosted by the Lord Mayor of London to celebrate the UK-India Economic Partnership on Tuesday evening, the minister confirmed that both sides will "hammer out" the details during the upcoming visit of Commerce and Industry minister Piyush Goyal to the UK and Europe next week.
"We just completed our consultation on an Indian trade deal, which saw huge interest from businesses across the country. We are now going to begin negotiating a free trade agreement," said Truss."I see the UK and India in a sweet spot of the trade dynamics that are building up... We are looking at a comprehensive trade agreement that covers everything, from financial services to legal services to digital and data, as well as goods and agriculture. We think there is strong possibility
WTO
WTO members can attend ministerial conference in person
Reuters: GENEVA, Sept 7 (Reuters) - The World Trade Organization (WTO) has invited its members to send delegates to Geneva to attend a major ministerial conference in November-December, a letter seen by Reuters showed on Tuesday.
The invitation document is the first confirmation that the meeting, originally due to be held in Kazakhstan in 2020 but delayed due to the COVID-19 pandemic, will be held in person.
It stated that the delegation size would be “strictly limited” to four representatives to comply with local health measures. Meetings will be restricted to two delegates, it said.
Digital Currency and Trade
Digital Currency and Trade Systems Are Tearing up the Rules
IEEEspectrum: The next big thing in global commerce is "trust chain" digital platforms. Nations are now creating such platforms to allow businesses to execute transactions from anywhere on the planet securely and irrefutably. These platforms—which combine open alliance legal agreements (like Visa or Mastercard's legal agreements), distributed ledger technology (for example, blockchains like hyperledger), and end-to-end encryption—can handle not only payments but also finance, trade, tax, and audits in a uniform manner.
A well-documented example is Singapore's Project Ubin, sponsored by the country's monetary authority and its Temasek sovereign wealth fund, which is now being deployed after five years of testing and development. China has created similar systems that have already seen large-scale deployment, but which are less well documented. Another example is the Swiss Trust Chain (which MIT helped engineer); that platform is live but its commercial applications are still being developed.
Trust chains add a layer on top of existing internet protocols that transforms the internet from a loosely connected communication medium into a trusted transaction medium. They make it cheaper, easier, and safer to do business with anyone anywhere and anytime. Technologies such as AI, blockchain, and digital identity are aiding this transformation, helping to make software platforms better suited for a distributed world economy.
These platforms bring with them the enormous challenge of transforming diverse legacy systems—for payments, taxes, shipping, customs, and more—to make them suited for a new uniform digital platform. One serious concern in this new regime is the deterioration of personal data privacy and the rising power of data holders, both companies and government agencies. To make these trust chains work, data needs to be more accessible and standardized—but it must also be adequately protected. Technologies such as federated AI, distributed ledgers, open legal alliances, and business models such as data exchanges can make this possible. But we need standards for governance and architecture that ensure such technologies are used.
A big motivation for the deployment of trust chain platforms is many nations' rush to issue central bank digital currencies, which use these same trust chain technologies to facilitate payments and tax collection. These "digital dollars" can make trade and payment cheaper, and make it more difficult to launder money and easier to trace fraud. But unless very carefully constructed, they also allow the government to see everything you purchase and to constrain what you can and cannot do with your money.
The Digitrade Digest is a weekly publication of the Digital Rights Program at Public Citizen.