The Ambivalence of Digital Trade

The Ambivalence of Digital Trade

Digital trade encompasses a broad spectrum of enabled transactions of trade in goods and services that can either be digitally or physically delivered. Digital trade is growing exponentially and is opening up new opportunities to the global community in both low- and high-income settings – allowing companies to sell more products across diverse markets. The growth of digital trade however, is creating heightened uncertainty about the nature of international transactions and policymaking.


New multilateral trade rules have not yet been implemented to ensure that growth and freedom of trade is exercised on all levels. Because of the complexity of digital trade across settings, unified, bilateral policy has become something of a challenge – with the need to cover issues related to data, security and authority.

What we can be sure of, is that technology is changing the face of global commerce. Transferring data across barriers enables businesses to improve operations and connect customers across the globe. This, questions the relevance of conventional, at-the-border barriers to trade-like tariffs, which is still implemented to promote and restrict trade.

Essentially, digitalization is driving commerce but increasing trade activity requires a greater protection of the services, products and data that are being transferred.

Security measures and what that means for digital trade

With digital trade, comes the importance of next-level cyber security measures, requiring governments, and organizations to assess the increased risk-factor of attacks and their impact. However, implementation of cyber security policy will likely constitute barriers to overall date flow and business to business transactions.

According to recent reports, the implementation of more stringent cyber security policy would mean increased import restrictions on information technology, data flow restrictions and products including software from countries or supply chains where the cyber risk is high.

The way forward  

Although there has been a global effort to include rules for digital trade, there are still uncertainties about implementing the right framework that suitably covers all aspects of this diverse market. The changing nature of this sector, calls for a holistic approach, one that requires the collective effort of stakeholders, businesses, governments and the community at large. Trade and production have become reliant upon the need for using and storing digital information across borders, which raises concerns about security measures and regulatory policies. The challenge remains, to ensure that digital trade fosters inclusive growth and yet does not perpetuate the risks involved with data flows.