New Zealand Foreign Trade and Affairs - 7 September 2019

Digital Economy Partnership Agreement (DEPA) negotiations

Announcement of negotiations
The start of negotiations towards a Digital Economy Partnership Agreement was announced (external link) by the Minister for Trade and Export Growth David Parker, together with Chile’s Minister of Foreign Affairs Roberto Ampuero and Singapore’s Minister of Trade and Industry Chan Chun Sing on 16 May 2019. This was announced on the side lines of the Asia-Pacific Economic Cooperation (APEC) meeting of Ministers Responsible for Trade in Viña del Mar, Chile.

More information about why New Zealand is participating in this negotiation is set out in this Briefing to the Minister for Trade and Export Growth [PDF, 1.5 MB].

Since the launch of negotiations, negotiators have met once in July 2019.

There are two further meetings planned for 2019 in September and October (alongside meetings of the WTO-based e-commerce negotiations (external link)).

What is the ‘digital economy’ and ‘digital trade’?
Digital economy
The digital economy is made up of economic activities conducted or facilitated through digital technologies. With digital being part of our everyday life, the New Zealand Productivity Commission (external link) recently stated, “there is little to differentiate the digital economy from the broader economy; in other words, the digital economy is the economy”.

Digital trade
While there is no single accepted definition of digital trade, the Organization for Economic Cooperation and Development (OECD) reports that (external link) there is a growing consensus that it encompasses digitally-enabled transactions of trade in goods and services that can either be digitally or physically delivered, and that involve consumers, firms, and governments.

In other words, digital trade is anything that is enabled by digital technologies whether or not it is digitally or physically delivered. For example, digital trade would include the purchase and physical delivery of a paper book through an on-line marketplace as well as the purchase and digital delivery of an e-book.

’Digital trade’ and ‘e-commerce’ are often used interchangeably.

Why do we need an agreement in the digital area?
Digital trade benefits New Zealand – businesses and consumers
Digital trade is growing exponentially and this creates opportunities for New Zealanders. Digital trade is especially important for the New Zealand economy, which is largely made up of small and medium sized businesses. Digital technologies help these businesses overcome the challenges of scale and distance to enter global markets that were previously only accessible to larger businesses, accelerating their growth.

The many benefits for consumers from digital technologies include more convenience, lower prices, more choice and better information.

Digital technologies can also potentially support the increased participation in trade by women, Māori and rural communities, helping spread the benefits of trade across our communities and regions – a key aim of our Trade for All policy.

Barriers to digital trade are arising
The changing nature of trade in the digital era is leading to new barriers to trade arising.

We need new rules
New international rules are required to deal with these issues, but the growth of digital trade has resulted in a lag in the development of relevant rules. Because of the borderless nature of the internet, consistent and coordinated global rules and norms would help ensure a level and fair ’playing field’ for international trade flow in the global digital economy.

These negotiations are an opportunity for New Zealand to lead in this area and create rules and best practice that reflect the needs and concerns of New Zealanders. New rules to support digital trade can help provide greater transparency and certainty for New Zealand businesses and consumers when buying and selling online, and increase trust in the digital online environment. This will make it easier for businesses and consumers to take advantage of the opportunities digital trade presents.

At the same time, the Government will not agree to new rules unless they include adequate safeguards which allows it to continue to protect New Zealanders’ interests and fulfil its obligations to Māori (including under Te Tiriti o Waitangi). We will ensure that interests of importance to New Zealanders such as personal privacy, consumer protection, data management, transparency and openness are appropriately protected.

Who is involved?
New Zealand, Chile and Singapore - as small trade-dependent countries, we traditionally have much in common in terms of strategic alignment on trade policy issues. New Zealand, Chile and Singapore were three of the four countries to initiate and create the P4 agreement, which set the scene for the TPP and then the CPTPP agreements.

New Zealand, together with Chile and Singapore, is keen to explore what our three countries might be able to agree to in terms of principles, rules, cooperation or other approaches for digital trade and the digital economy. With these likeminded partners, our work towards an international agreement on digital trade and the digital economy will contribute to and help shape an emerging area of international trade policy.

What is the scope?
The parties intend to consider all aspects of the digital economy that might support trade in the digital era.

Existing agreements
This is likely to involve building on existing trade agreement commitments that New Zealand, Chile and Singapore have in e-commerce chapters of free trade agreements such as the CPTPP. Existing commitments include rules about customs duties on electronic transactions, electronic signatures, electronic ’spam’, and online consumer protection and protection of personal information. Further information about the CPTPP commitments in this area are available here.

Emerging issues
Parties will also look at a range of emerging digital economy issues and subject areas. These could include issues like cross border data flows, digital identity, artificial intelligence, electronic invoicing, and open data.

DEPA Modules

Parties are discussing potential ‘modules’ to include in DEPA. The full draft of the DEPA framework is available here [PDF, 282 KB]. This is subject to change throughout the discussions.

Some of the key focus areas under discussion are:

Enabling digital trade

• Business and trade facilitation – issues like digital trade facilitation (paperless trading and electronic invoicing for example), logistics;

Openness and digital trade

• Market openness – customs duties, procurement and ‘access and non-discrimination’;
• Data issues – issues like cross border transfers of information, location of computer facilities;

Trust and digital trade, including privacy

• Business trust – issues like unsolicited commercial electronic messages
• Consumer trust – issues like consumer protection
• Intellectual property and innovation – issues like access to source code and open data;

Wider trust environment – issues like cybersecurity and digital identities;

Emerging trends and technologies – issues like artificial intelligence and financial technology;

Cross cutting issues

• General provisions and legal framework - issues like definitions, scope, relationship with other agreements, transparency, general exceptions (including New Zealand’s Treaty of Waitangi exception), accession procedures;
• Cooperation – issues like digital inclusion, ensuring DEPA operates as a ‘living agreement’

How does this fit in with other digital work?
The intention is that this agreement will complement the WTO negotiations on e-commerce and build on the digital economy work underway within APEC (external link), the OECD (external link) and other international forums.

The parties agreed that this new agreement will generate new ideas and approaches that can be used by members in the WTO negotiations, and by other countries negotiating free trade agreements or engaging in international digital economy or digital trade work.

What does New Zealand want?
We want to create robust, transparent and interoperable international rules and best practice to provide greater certainty for New Zealand businesses and consumers, while supporting and promoting digital trade.

At the same time, we know it is important that we ensure a safe, secure and open online environment for everyone, and protect and preserve our ability to regulate to address legitimate public policy interests.

The CPTPP was the first agreement to seek to establish a broad set of rules for regional digital trade. The WTO e-commerce negotiations are similarly attempting to establish a set of rules for digital trade internationally. The negotiations with Singapore and Chile are designed to see what may be possible by way of a ’pathfinder agreement’ in this area, and to attempt to set the agenda for disciplines and commitments in digital trade.

Any agreement reached between Chile, New Zealand and Singapore will be ’open’ for accession by other WTO members who can meet the high quality standards established in the agreement.

Have your say
It’s important to us to hear from New Zealanders. The Government will only agree to rules which it believes are in New Zealand’s interests. Your views will inform our approach to the negotiations, and there will be further opportunities to engage as negotiations get underway.

Email us any time at e-commerce@mfat.govt.nz to share your views and register your interest in future engagement opportunities.

Let us know
We are interested in hearing about your experiences of digitally-enabled international transactions involving goods or services (whether digitally or physically delivered).

Let us know:

• What are the things that slow you down, cause you cost, or otherwise concern you?
• Do you have any thoughts on what might solve or help with those issues?
• What are the things you don’t trust about the internet or digital technologies when using them to trade?
• What do you think would help turn the internet into an environment that businesses and consumers trust to use for buying and selling and related activities?
• Any other issues?
• Public submissions

A public submission process was held between May and July 2019. 6 submissions were received related to DEPA and 1 submission related to e-commerce and digital more boradly. Read the submission here [PDF, 2.4 MB].