For years, the World Trade Organisation (WTO) resembled a giant with its legs tied, where one dissenting voice could freeze global digital ambitions. Saturday’s agreement by 66 countries in Cameroon is a step towards a major change. Instead of waiting for a full, impossible consensus, the group representing 70% of global trade decided to implement the first-ever baseline for digital trade rules on its own.
The decision to activate the agreement in a plurilateral model sends a clear signal to blockading countries such as India: the veto mechanism is no longer an effective tool for holding back the economy. For the technology sector and corporations operating in the cloud, it promises the end of the digital ‘Wild West’.
The new agreement aims to harmonise regulations that have so far been a barrier to entry into new markets. We are talking about digital authentication, electronic signatures and online consumer protection. The UK’s business and trade secretary, Peter Kyle, rightly points out that standardising these processes will realistically reduce companies’ operating costs. When customs procedures and trade documentation become fully digital and mutually recognised, delivery times for products and services reduce dramatically.
However, the success of this initiative has a weak point – the lack of US signature. Although the administration in Washington is examining the content of the agreement, its distance casts a shadow over transatlantic calm on the issue of data governance. The US is currently balancing between supporting open trade and protecting its own tech giants from foreign regulation.
India’s attitude of consistently blocking multilateral agreements for fear of losing negotiating power has led to a paradox. In trying to protect its internal market, Delhi risks finding itself outside the bracket of the digital ecosystem that is just forming. Senior EU diplomats make no secret of the fact that the ‘bypass’ applied to Cameroon is a form of political pressure.
Global digital trade is no longer waiting for the marauders. Companies operating in signatory countries will gain an advantage with a more secure and cheaper legal framework, while markets remaining with the traditional consensus model may become operationally too expensive.
