Digitrade Digest #4

Indian Trade Secretary opposes USTR, UK Applies to join CPTPP, EU consults on digital tax

The Digitrade Digest delivers the latest developments in global digital trade right to your inbox every week. To get the news as it happens, follow us on Twitter @DigiTradeDaily.

If you’d like to get more involved in the discussion and collaborate with your fellow readers, head over the Digitrade Slack and introduce yourself!

Join us on Slack

Digitrade Headlines

Indian trade secretary stands by digital tax opposed by U.S.

Reuters: “India on Wednesday defended a new digital tax which faces opposition from big U.S. tech firms such as Alphabet’s Google and Facebook and the United States Trade Representative (USTR).

In its annual budget on Monday, India said a 2% equalization duty on foreign e-commerce companies imposed last year would apply even to companies that do not own the goods or provide the services on their platforms and if any part of the transaction is online, even if it this is only an online payment. “Basically if there is an economic benefit from a certain jurisdiction then there has to be some taxation in that jurisdiction,” Indian Trade Secretary Anup Wadhawan said during a news briefing in New Delhi.

The government’s clarification in the budget added that royalty and fees for technical services would be excluded, industry officials said.”

WTO Publication Examines Opportunities, Challenges of Digital Trade

IISD: “The World Trade Organization (WTO) has released a book that examines how WTO members can ensure that the changes brought by digital technologies benefit all and support inclusive growth. The publication combines academic perspectives on digital trade with policy recommendations.

The book titled, ‘Adapting to the Digital Trade Era: Challenges and Opportunities,’ analyzes the implications of the rapid adoption of digital technologies for trade and development. It finds more intensive use of information and communications technology (ICT) services by other sectors, greater reliance on big datasets and artificial intelligence, the reduction of trade costs because of new digital technologies, and the adoption of robots all offer opportunities for gains in trade.”

[Report] Transatlantic Data Transfers: The Slow-Motion Crisis

CFR: “The Digital and Cyberspace Policy program has launched a new Cyber Brief. In this brief, Atlantic Council Senior Fellow and Georgetown University Law Center Adjunct Professor Kenneth Propp argues that in the wake of the Shrems IIdecision, which threw the future of transatlantic data flows into doubt, the United States should develop a strategy to address the European Union (EU)’s concerns about U.S. privacy protections and promote cooperation with other democracies.”

UK applying to join Asia-Pacific free trade pact CPTPP

BBC: “The UK already has trade deals with seven of the 11 nations - and is pursuing two more. In total, CPTPP nations account for less than 10% of UK exports, a fraction of what goes to the EU.

This deal would however deepen some of those ties - and allow UK manufacturers who source components from multiple nations in the bloc some benefits under "rules of origins" allowances.

But the real boost could come in the future, if others join - in particular the US, as President Biden has hinted. That would give the UK that hoped-for trade deal with America - within a trading bloc wielding considerable power on the global stage.”

EU consults on digital levy

Pinsent Masons:“The European Commission is asking for views on an EU-wide digital levy to "help address the issue of fair taxation related to the digitalisation of the economy".

The new levy is not intended to interfere with the ongoing work at the G20 and Organisation for Economic-Cooperation and Development (OECD) level on a reform of the international corporate tax framework, according to the Commission.

The Commission does not set out precise proposals in its 'roadmap' for initial feedback or its more detailed public consultation. It states that the levy could take the form of a corporate income tax top-up to be applied to all companies conducting certain digital activities in the EU; a tax on revenues created by certain digital activities conducted in the EU; or a tax on digital transactions conducted business-to-business in the EU.”

The Digitrade Digest is a weekly publication of the Digital Rights group at Public Citizen.