No 21st Century Without Digital Trade

The United States and Taiwan on August 17 announced that talks under the U.S.-Taiwan Initiative on 21st Century Trade would begin this fall. The 11 trade areas that will be addressed in the negotiations include trade facilitation, good regulatory practices, anti-corruption, small-and-medium-sized enterprises (SMEs), agriculture, standards, labor, environment, state-owned enterprises, nonmarket policies and practices, and digital trade.  

U.S. trading partners realize the interests at stake in shaping the digital economy and many have joined the Regional Comprehensive Economic Partnership (RCEP), in which China is a major player. China and South Korea last year applied to join the Digital Economy Partnership Agreement (DEPA), which already includes New Zealand, Chile, and Singapore. These agreements provide a framework for closer digital economic integration that exclude the U.S. and could be shaped according to China’s liking. 

The next couple of years will determine whether the U.S. will be a rule-maker or a rule-taker on digital economic and trade policies in East and Southeast Asia. The Biden administration should therefore express and promote its vision for internet governance in the Indo-Pacific, and the 21st Century Initiative is an ideal chance to set a gold standard on digital trade in the region. Taiwan, with its recently established Ministry of Digital Affairs and its impressive cybersecurity standards and e-government programs, is an ideal partner for setting digital standards.  

To build strong cooperation, the 21st Century Initiative must at the very least include digital trade regulations and standards to support the expansion of trade and commerce between the U.S. and Taiwan. The two sides now have the opportunity to create a robust model of trust-based partnership in addition to solid IPR protection laws, which will directly benefit U.S. economic interests and guarantee Taiwan’s ongoing prosperity and security. In setting the framework and direction for the Initiative, parties should be guided by longstanding trade principles of non-discrimination, transparency, openness, and interoperability. It is pivotal for the Initiative to include a core set of high-quality digital rules and commitments that are binding and enforceable. 

This is an opportunity for the two governments to develop a Digital Trade Agreement that can serve as a benchmark for all future accords globally. Such an agreement can also promote digital tools that facilitate trade between the U.S. and Taiwan by implementing regulations that are regionally adapted, flexible, inclusive, and advantageous to workers and SMEs. 

The 21st century is online; the internet and other digital technologies play a pivotal part in strengthening and supporting businesses in every industry of the global economy. For the U.S. and Taiwan to succeed in setting “high standards and meaningful economic outcomes,” digital trade must be prioritized and regulated within the framework of a robust Digital Trade Agreement.