Future-proofing world trade in technology: Turning theWTO IT Agreement (ITA) into the International Digital Economy Agreement (IDEA)

Abstract

Although the InformationTechnologyAgreement (ITA) in theWorldTrade Organization (WTO) is a sector agreement tailored for the fast-moving ICT industry, the signatories have failed to re-negotiate its scope since 1996. In the meantime, the digital economy has reshaped the industry with emergence of Internet and a range of new products, where many of themare dependent on network services. Supply chain fragmentation has integrated the developing economies in the ICT trade, and they stand to enjoy most of its trade, welfare and efficiency gains. Despite proliferation of bilateral free trade agreements (FTAs) in recent years, they cannot replace a plurilateral 'critical mass' agreement under the auspices of the WTO. This article proposes the creation of an International Digital Economy Agreement (IDEA) by augmenting the ITA through full coverage on trade in goods; including non-tariff barriers (NTBs) and trade in telecommunication and computer and related services in all modes of delivery (including Mode 4); and six priority economies that are currently not signatories of the ITA - Argentina, Brazil, Chile, Mexico, South Africa and the pending WTO accession of the Russian Federation. Under its new and full scope, IDEA would achieve a trade coverage that exceeds 40% of the current trade under the ITA,making both developed and developing economies as key beneficiaries.