Promotion of digital trade and responses of East Asian countries — Necessity of multi-pillar approaches with WTO and FTAs as the central pillars

Author Name NAKATOMI Michitaka (Consulting Fellow, RIETI)
Creation Date/NO. April 2022 22-P-006
Research Project Globalization and the Japanese Economy: Firm Adjustment and Global Trade Governance
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Under the current environment where legislative and judiciary functions of the WTO are paralyzed and protectionist movements are conspicuous including in major players such as the United States and China, it is getting clear that a trade regime dependent solely on the WTO does not function, which is that major reason for the requirement for WTO reform.

At the same time, networks of FTAs have realized substantial progress as in the case of CPTPP, the Japan-EU FTA, the Japan-U.S. Trade Agreement and RCEP. Without exaggeration, FTAs are becoming the main instruments for creating rules in international trade.

In this context, there is a growing need to discuss how countries can structure the regime for creating trade rules.

Multi-pillar approaches to dealing with issues are essential, while simultaneously utilizing such available tools as the WTO, FTAs, issue-based plurilateral agreements, regulatory collaboration and international standards.

This study focuses on digital trade issues where political and economic importance and urgency for rule making are present and where there are enormous discrepancies between the fast pace of technological development and its products, and a lack of rules governing them.

It analyzes the status quo of efforts for creating rules, including the challenges and problems currently faced, and try to show the way forward with emphasis on the need for taking multi-pillar approaches as the WTO and FTAs as the central pillars.