Digital technology is transforming the international trade landscape in terms of how we trade, what we trade, with whom we trade and the speed by which we trade.  This transformation has created exciting new opportunities for businesses of all sizes, enabling them to reach new markets. It has brought new choice to consumers, and enabled more countries to become part of global value chains.  At the same time, these changes have raised new regulatory challenges as well as new questions about what market openness means in the digital age.  The OECD is working to help policy makers better understand the impact of digitalisation on trade, and the implications for trade policy making.

The impact of digitalisation on trade

The digital transformation has reduced the costs of engaging in international trade, facilitated the co-ordination of global value chains (GVCs), helped diffuse ideas and technologies, and connected a greater number of businesses and consumers globally. But even though it has never been easier to engage in international trade, the adoption of new business models has given rise to more complex international trade transactions and policy issues.

In today’s fast-paced and interconnected world, governments are facing new regulatory challenges, not just in managing issues arising from digital disruption, but also in ensuring that the opportunities and benefits from digital trade can be realised and shared inclusively.

What is digital trade? While there is no single recognised and accepted definition of digital trade, 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. That is, while all forms of digital trade are enabled by digital technologies, not all digital trade is digitally delivered. For instance, digital trade also involves digitally enabled but physically delivered trade in goods and services such as the purchase of a book through an on-line marketplace, or booking a stay in an apartment through a matching application.

Fixing yesterday's policies

The global trade regulatory framework has been slow to catch up to technological developments, and emerging trade barriers risk curtailing some of the benefits of digitalisation.

Well-designed services trade policies can help make globalisation work for all

Services industries generate more than two-thirds of world GDP, employ the most workers and create the majority of new jobs globally. Watch this video to learn more about how reforming services trade brings benefits for consumers and strengthens value chains and economic performance.

The ICT revolution is a key driver of services trade

Services Trade and the Global Economy synthesises recent work by the OECD analysing services trade policies. 

The rise of services in international markets is to a large extent driven by the ICT revolution. Once the output of a service activity can be codified, it can in principle also be digitised and transmitted over electronic networks globally. The book highlights the increasing importance of lowering barriers to services trade as a means to ensure that the benefits of digitalisation can be maximised. Liberalisation and pro-competitive reforms in the telecommunications sector – the infrastructural backbone of the digital economy – are associated with a substantial reduction in the trade costs for business services. High capacity networks at competitive prices are a necessary condition for a digital transformation of knowledge-intensive services as well.

Based on the OECD Services Trade Restrictiveness Index (STRI) - a unique, evidence-based tool that provides snapshots of regulations affecting trade in services in 22 sectors across 44 countries (representing over 80% of global trade in services) - the analysis highlights the magnitude, nature and impact of the costs entailed by restrictive services trade policies.