Quick Win No. 5

Promote a regulatory environment that fosters consumer trust in digital trade  

Trust is a key factor in the development of digital trade and the digital economy. Both consumers and businesses need to have assurances that their interests are protected when engaging in digital trade transactions. From the consumers’ side, this implies that digital trade operations should take place in a regulatory environment that safeguards online consumers from fraudulent and deceptive commercial practices and protects their privacy and personal information.  

Existing WTO rules only allow Members to adopt measures related to the protection of consumers, privacy, and personal data, among others, as part of the GATT and GATS exceptions, but this is insufficient and does not resolve trade barriers nor contribute to compatibility between rules. This is where multilateral rules could be helpful. These matters are being addressed in the WTO JSI on E-commerce, where participants have recently reached agreement on the topics of unsolicited commercial electronic messages (SPAM) and online consumer protection against fraudulent, misleading, or deceptive conduct when they engage in digital trade. However, there is still work to be done on privacy and the protection of personal information. 

The issue of privacy and the protection of personal information is closely linked with data transfer, which is an enabling and essential factor for any digital trade operation. Most companies today rely on data transfers as part of their business operations or internal processes, including data related to personal information. This factor is even stronger in the case of digital services. Therefore, ensuring adequate protection of the personal information of users and consumers of digital trade can help to build further trust in the digital economy, contributing to the security of digital trade, as well as its expansion. Indeed, the G20 recognized the close link between trust and the free flow of data as a cornerstone for the evolution of digital trade.

Although approaches followed by countries to guarantee consumer trust in digital trade through free trade agreements (FTAs) vary, especially in relation to privacy and personal information, they have found some common ground. FTAs generally recognize the contribution of personal information protection in enhancing consumer trust in digital trade and the need for participating countries to adopt regulatory frameworks for the protection of consumer information. Some FTAs go far to promote the compatibility and interoperability between their different regimes for protecting personal information, such as through the recognition of regulatory outcomes or of their legal frameworks, and by acknowledging a set of principles that underpin a robust legal framework for the protection of personal information (e.g., DEPA).

Besides guaranteeing the free flow of data, to promote digital trade, WTO Members should therefore keep working to find common ground to foster consumer trust in the digital economy by agreeing on rules that adequately protect consumer privacy online and personal information, as well as safeguard them from fraudulent, misleading, and deceptive commercial practices. Accordingly, Members should encourage international regulatory cooperation on these issues, which will be important for the compatibility and interoperability of different regulatory frameworks.