The power of data in the expanding panorama of digital trade is becoming an essential component of commercial relations, especially recent free trade areas (FTAs). As Thailand is now exploring new agreements on its western flank (such as with South Asia, Gulf countries and Europe) and on its eastern flank (such as with Pacific rim countries, interlinking with the Indian Ocean), what are some of the stakes deserving careful reflection?
At the multilateral level, there is longstanding guidance from the United Nations (UN), but it tends to be based on old models interlinked e-commerce, essentially the purchase and sale of goods via the internet. For instance, there are the provisions of the UN ‘s Model Law on Electronic Commerce (1996) and the UN Convention on the Use of Electronic Communications in International Contracts (2005), which try to reduce the paperwork through e-payments and recognition of e-identities/e-signatures. However today, the key issue is the data and the digital spectrum, which are not necessarily linked with the trade in goods, services, capital or investment.
An accompanying phenomenon is the proliferation of regional economic groupings with their own positions on digital trade. The question for Thailand is how to decipher their positions, especially when considering whether to join them. For example, Thailand is now reviving talks with the European Union (EU) on establishing an FTA. The EU has strict rules on personal data protection which may impact data flows.
Meanwhile, there are the actual or potential links on other fronts, particularly the Asia Pacific Economic Cooperation (Apec), Regional Comprehensive Economic Partnership (RCEP), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Indo-Pacific Economic Framework for Prosperity (IPEF), juggling various superpower dynamics.
They have different approaches on digital issues; some are stricter on digital flows than others. In the middle, there is, of course, the Association of Southeast Asian Nations (Asean).
The most convergent area is guided by the World Trade Organization (WTO) which has a longstanding moratorium to prohibit the imposition of customs duties (tariffs) on cross-border digital flows. This prescription is usually part and parcel of free trade agreements.
The WTO is also behind the Trade Facilitation Agreement which is popular with countries. It targets the reduction of red-tape through facilitation, such as via “single windows” to minimise the paperwork. It is now more open to agreements which have a limited number of states joining (“plurilateral”) rather than having a vast number of states joining (“multilateral”).
Possibly, the most difficult area for negotiating digital trade relations is “data localisation”. That term implies that data must be kept at least in the country where it is generated. As a corollary, states which embody less open political systems tend to restrict data flows and intervene in commercial relations, at times under the guise of state enterprises.
This is countered by states which are more open politically, thus favouring freer data flows without the need for data localisation and with least state intervention. In between, there are the other states which take a flexible approach of being open to data flows subject to a defined range of restrictions, such as protection of personal data.
Other issues pervading FTAs on the digital trade deserve attention. There is the concern of broad national interest under the heading of “legitimate public policy objective”, which might dilute the liberalisation. One way of monitoring this is to have a joint committee between the member states to oversee the issue and provide a degree of objectivity in the discourse. This is currently visible from the most comprehensive and targeted FTA agreement on the digital trade — the Digital Economy Partnership Agreement (DEPA) between Chile, Singapore and New Zealand. That agreement also has a dispute settlement provision, including arbitration.
Careful scrutiny is needed on cybersecurity; many states, including Thailand, are now adopting new laws on this front. Yet, too broad a law under the heading of cybercrime, with national security of an extensive kind, might simply be a method of justifying control over the population, abused by non-democratic regimes.
Another area of concern is government procurements. They tend to be omitted from FTAs because of states wishing to retain supervision over massive contracts with huge financial implications. Yet, this is an area well-known for vested interests and corruption. Conversely, openness to competition might be a way of countering that grey puddle.
Consumer protection in regard to the digital trade should be high on the agenda of new FTAs and there is a close link with personal data protection. The new trend is to protect consumers from unsolicited offers, and issues of vulnerability require special measures. An example of the latter is the stronger emphasis on protecting children from being targeted via digital consumerism. The EU is also adopting a strict position against algorithms and artificial intelligence where they may lead to discrimination and social scores of persons for that purpose.
There are then the issues of equity and ecology. An obvious challenge is the disparity between those who have and those do not have access to digitalisation. A human-centred FTA should aim for digital inclusion, as well as incentives for small- and medium -scale industries to be partners sharing the fruits of the digital economy. The advent of the “green economy” invites digital trade to promote environmental concerns in the midst of global warming, climate change, pollution and loss of biodiversity.
From the Thai perspective, all these considerations should interconnect with the role of parliament and the community at large in having a voice in the formulation and finalisation of FTAs. This is embedded in section 178 of Thailand’s current constitution which opens the door to public participation-cum-hearings and parliamentary scrutiny of executive deals emanating from the government.
It is thus salutary to view digital trade as a “means” rather than an “end”. Inherently, it entails the need for checks-and-balances against the monopolisation of political, economic and commercial power.
Vitit Muntarbhorn is a Professor Emeritus at Chulalongkorn University. He has helped the UN as UN Special Rapporteur, UN Independent Expert and a member of UN Commissions of Inquiry on Human Rights. He is the author of the book ‘Challenges of International Law in the Asian Region.’