What is the Digital Economy Partnership Agreement?

The Digital Economy Partnership Agreement (DEPA) was created due to the common interest between Chile, New Zealand and Singapore to take advantage of the potential of the digital economy to benefit small economies, while providing opportunities of inclusion to more people and SMEs into the global economy.

The main objective of this agreement is to establish certain basic rules to promote our countries as digital economy platforms, for instance by promoting enterprise-friendly regulations. As a result, businesses’ exports of digital products and services would be boosted, facilitating the exploration of new technological areas that can help society as a whole through inclusive economic development.

WHAT IS THE SCOPE?

The Parties have considered all the aspects of the digital economy and electronic commerce. The DEPA includes disciplines for open and interoperable technologies and standards, including best practices to provide a higher level of legal certainty for enterprises and consumers, while at the same time supporting and promoting inclusive and sustainable digital trade.

Simultaneously, DEPA promotes an open, global, and non-discriminatory Internet that acts as a catalyst for creativity and innovation. This agreement confirms the importance of a safe and secure open online environment to everyone and recognizes the right to regulate in order to protect legitimate public policy objectives.

The agreement includes the fundamental pillars of a modern digital trade policy: a) Free data flows; b) Non-discrimination of digital products; c) Non-forced location of computing facilities.

COVERED ISSUES

Barriers to digital trade. The changing nature of commerce in the digital era is generating new barriers to trade. DEPA is designed to address these challenges.

Some of the key issues that DEPA addresses are:

  • Keeping an open and non-discriminatory Internet, following its technical design. DEPA aims to avoid any fragmented markets or barriers to the free flow of data that could become distortions to the global digital economy.
  • The growth of the online platforms has led to the cross-border trade of small packages. The customs procedures were not created for this high-volume and low-value commerce, and could result in longer delivery times.
  • Regulations that could restrict the flow of data or introduce localization requirements for computing facilities.
  • Consumer protection law.
  • Verification of international transactions.

DIFFERENCES BETWEEN DEPA AND CPTPP

CPTPP is one of the first agreements that introduced a wide set of rules for digital trade. At the WTO level, negotiations on the Joint Statement Agreement on Electronic Commerce—that were initiated during May 2019—try to establish a similar framework of rules for digital trade.

The negotiations of DEPA were conducted sharing the vision of a “Pioneer agreement” in this area, with a high degree of ambition. By doing so, the topics and commitments covered by the agreement went beyond from what was achieved in CPTPP. Chile proposed new topics, like cooperation on artificial intelligence, digital identity and open data, among others. We consider the inclusion of these topics as key aspects for enterprises to choose Chile and its partners as the place to establish and develop their business. This will allow Chile to become a Digital Hub in Latin America connected with Asia-Pacific.

The agreement reached between Chile, New Zealand, and Singapore, once it enters into force, will be open to accession, if the interested accession candidate can fulfil the high-quality standards established by the agreement.

NEW TRADE RULES

New international rules are required to address the digital economy. Due to the borderless nature of the Internet, coordinated and consistent rules and global standards would help to ensure a level playing field which is competitive and fair for the flow of international trade.

These negotiations are an opportunity to lead this area, create rules and share better practices that reflect the needs and concerns of developing economies. New rules to support digital trade could help achieving greater transparency and certainty, as well as increasing trust in the online digital context. This will help businesses and consumers to seize the opportunities offered by digital trade.

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