A new report released today by the City of London Corporation calls on the UK Government to secure strong commitments on digital trade in future free trade agreements (FTAs).
Past Precedent and Future Opportunities: Assessing Digital Trade Provisions for the UK FPS sector aims to support trade negotiators by providing a financial and professional services (FPS) view on best practice for digital trade provisions in trade agreements. It says that the UK should ensure the free movement of financial data is a feature of all FTAs going forward, highlighting the recently agreed UK Japan Comprehensive Economic Partnership Agreement (CEPA) as a good model to build upon.
The publication of the report comes after the UK Government announced an FTA with Australia. Work is also underway to strengthen ties with other partners, including New Zealand and the US. Moreover, discussions are soon expected to begin on the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and a potential digital economy agreement with Singapore.
Digital services are a core part of the UK economy, with over 67% of service exports worth £190.3 billion pre-pandemic being digitally delivered. This increase in digitalisation has made it easier for FPS firms to engage in digital trade, raising a whole set of new challenges, not least how this trade is regulated, and whether the current trade rules adequately address trade in the digital age.
The report makes a number of other recommendations, including:
- The UK should ensure the free movement of financial data is a feature of all FTAs going forward.
- The UK should seek to break ground on cooperation between jurisdictions to enhance regulatory coherence and standards in this area.
- The UK should use its seat at the World Trade Organisation to put forward the case for making the moratorium on e-commerce permanent.
- The UK should seek to use all mechanisms at its disposal to ensure that its digital trade policy is coherent and holistic.
- In order to minimise the issues created by the patchwork of bilateral and agreements, the UK should align itself with likeminded jurisdictions and aim to position itself at the heart of an integrated global digital economy.
- The UK should establish greater cooperation on cybersecurity issues.
- Once trade agreements have been signed and ratified, the Government should assist firms with implementation.
City of London Corporation Policy Chair Catherine McGuinness added, “The UK has a unique opportunity to forge a forward-looking and modern digital trade agenda.
“With the pandemic accelerating the use of digital services in the financial and professional services sector, the cross border flow of data and information has never been more important.
“It is therefore crucial that the UK and its partners across the world ensure that digital trade and the free movement of financial data is a core part of all ongoing trade negotiations.”