Promoting policies that make digital trade work for all (OECD)

Arguments

The need for trust in international trade negotiations

Supporting facts:

• OECD identifying best practices where as WTO does not.

• Instead of reacting defensively, learning from each other is beneficial.

• Lessons learned from prosperous nations could be beneficial if received with trust.

• Adopting policies even before having legislated, as being done in the OECD.

Topics: OECD, WTO, Trade Policies, Developing Countries, Industrialisation, Policy Adoption

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It will be challenging to integrate certain provisions into a final agreement

Supporting facts:

• The US has pulled their support from these issues

• Issues are hindering some countries from joining due to lack of an frameworks

Topics: Trade agreements, Data flow provisions, Source codes

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More countries might join the first phase of negotiations or agreements because contentious issues may be addressed at a later stage

Topics: Trade agreements, International negotiations

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Audience suggests that government regulations often inhibit the smooth operation of private sector businesses

Supporting facts:

• The audience member is from New York and owns an import/export business

• Sees regulation as restrictive and impeding business, especially in the context of COVID-19

Topics: Government regulation, Private sector, Business operation

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Report

The need for trust and knowledge exchange among nations in international trade negotiations was highlighted. The Organisation for Economic Co-operation and Development (OECD) was commended for identifying best practices, while the World Trade Organization (WTO) was criticized for its lack of proactive measures in this area.

It was stressed that learning from prosperous countries and adopting policies before legislative mandates, as seen in the OECD, can yield positive results. The impact of the United States’ revised position on digital trade and its implications for the Global Services Innovation (GSI) were questioned.

The withdrawal of US support for certain provisions, such as trade agreements and data flow provisions, including source codes, has posed challenges in integrating them into a final agreement. Despite this, a possibility of more countries joining negotiations in later stages was suggested.

Connectivity issues in rural areas of Latin America and the Caribbean were emphasized, calling for support from the international development community to improve technical readiness. Additionally, the importance of capacity building for effective e-commerce regulations, highlighted in ongoing negotiations in Asia and Africa, was emphasized.

Concerns were raised about restrictive government regulations hindering private sector businesses, while others advocated for more accommodating policies to boost economic growth. The discussions reflected the significance of trust, learning from best practices, addressing contentious issues, and promoting collaboration in international trade negotiations.

Arguments

Digital goods and services play a critical role in business, supporting core business processes and supporting activities.

Supporting facts:

• A study conducted on 764 SMEs across Indonesia indicates increased productivity, lower costs, geographical expansion, inclusion of women, and formalization of otherwise informal businesses due to digital goods and services adoption.

• Digital technology empowers the informal sector and includes more women

Topics: Digital Trade, SMEs, Business Processes

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Need to lower the barriers of entry and cost of adopting digital technology to make digital trade more inclusive.

Topics: Digital Trade, Inclusive Growth

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Regulatory coherence and certainty are essential for businesses to expand and operate.

Supporting facts:

• Businesses struggle to operate under uncertainty and continuous regulatory changes.

• The need for definite and steady regulatory frameworks especially to digitalize more SMEs.

Topics: Regulation, Business Growth

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Connectivity and infrastructure are crucial for developing economies like Indonesia.

Topics: Digital Connectivity, Digital Infrastructure, Developing Economies

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Public-private partnership is essential for improving connectivity and infrastructure.

Topics: Public-Private Partnership, Digital Connectivity, Digital Infrastructure

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Private sector consultation is crucial before policy is made

Topics: Private sector, Policy formulation

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Report

The analysis of the discussions highlights several important points. Firstly, there is a positive sentiment towards the adoption of digital goods and services in businesses. These digital tools are viewed as crucial in enhancing productivity, lowering costs, facilitating geographical expansion, and promoting inclusivity, particularly for women in the informal sector.

A study conducted on 764 small and medium-sized enterprises (SMEs) in Indonesia revealed that the adoption of digital goods and services resulted in increased productivity, lower costs, expansion into new markets, and the formalization of previously informal businesses. The discussions also emphasize the significance of regulatory coherence and certainty for businesses operating in the digital realm.

Uncertainty and continuous regulatory changes pose challenges for businesses, especially when attempting to embrace digital technology and expand their operations. Therefore, there is a call for clear and steady regulatory frameworks to support the digitalization efforts of SMEs. Another important aspect highlighted is the need to reduce barriers and costs associated with adopting digital technology in order to promote inclusive digital trade.

Lowering entry barriers and making digital technology more affordable would enable more businesses, especially those in the informal sector, to participate in digital trade. This would contribute to reduced inequalities and support sustainable economic growth as outlined in SDG 8: Decent Work and Economic Growth and SDG 10: Reduced Inequalities.

Connectivity and infrastructure are identified as crucial factors for the development of economies, such as Indonesia. The discussions underscore the importance of improving connectivity and infrastructure to support economic growth and create an enabling environment for digitalization. Additionally, public-private partnerships are seen as essential in improving connectivity and infrastructure.

Collaborative efforts between the public and private sectors are crucial to bridge the gaps in connectivity and infrastructure development, particularly in developing economies like Indonesia. These partnerships are aligned with SDG 9: Industry, Innovation, and Infrastructure and SDG 17: Partnerships for the Goals.

Furthermore, it is acknowledged that private sector consultation plays a vital role in policy formulation. Engaging with private sector stakeholders before making policies related to technology, innovation, and infrastructure is valuable in generating effective and inclusive policies that can drive sustainable development.

This observation underscores the importance of involving all relevant stakeholders when formulating policies. In conclusion, the analysis of the discussions reveals the positive impact of digital goods and services in supporting core business processes and promoting inclusivity, particularly for women.

It emphasizes the need for regulatory coherence and certainty, lower barriers of entry and cost for adopting digital technology, enhanced connectivity and infrastructure, as well as the importance of public-private partnerships and private sector consultation in policy formulation. These findings contribute to the understanding of the role of digitalization and its implications for economic growth, inclusivity, and sustainable development.

Arguments

Lack of digital readiness impairs full engagement in global discussions

Supporting facts:

• E-commerce and digital trade discussions are super technical

• Countries without certain level of digital readiness find these negotiations challenging

• There is a regulatory gap between what is negotiated on multinational level and what is on the ground in these countries

Topics: Digitalization, E-commerce, Trade Agreements

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Disparity in the approach and thematic topics covered in digital trade negotiations

Supporting facts:

• Infrastructure, jobs and skills, market access to ICT goods are more often mentioned by African countries

• Cybersecurity, privacy, data flows are more prioritized by developed countries

• Only 23% of trade agreements between developing countries have digital provisions on data flows

Topics: Digital Trade Negotiations, Cybersecurity, Data Flows

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Intensity and structure of negotiation processes impede full engagement

Supporting facts:

• Negotiations are highly demanding and resources are needed

• Due to parallel small groups and connection requirements with the capital, the process might be too intense for countries with limited resources

Topics: Trade Negotiations, JSI Negotiations

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Lowering the barriers of entry, reducing tariff and non-tariff barriers to support e-commerce development

Supporting facts:

• Business is concerned if there is a policy fragmentation across economies which makes it difficult for them to expand the market.

• Non-tariff barriers make it difficult to adopt digital technology.

Topics: E-commerce, Policy Fragmentation, Non-tariff barriers

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Importance of digital skills and literacy for SMEs

Supporting facts:

• A large portion of SMEs are coming from informal sectors

• It’s difficult for them to upgrade or adopt a more advanced technology if their digital literacy is limited.

Topics: Digital Literacy, SMEs, Informal sectors

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Need for public-private partnership to improve digital literacy for SMEs

Topics: Public-Private Partnership, Digital Literacy, SMEs

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Harmonization of regulations can reduce export costs for businesses

Supporting facts:

• Companies are adopting different regulations which is a matter of cost. If regulations are harmonized, costs can be reduced and businesses can focus more on innovation.

Topics: Trade regulations, Trade costs, Export

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Security and investment screenings can hinder international trade

Supporting facts:

• Countries are making it more difficult to engage with international companies by implementing security measures and investment screenings, which can obstruct the process.

Topics: Trade security, Investment screenings, International trade

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It’s important to consider the backgrounds and needs of all countries in digital trade negotiations

Supporting facts:

• There are diverse policies which can affect a country’s ability to export. Developing countries or countries with certain challenges, such as fluctuating currencies, may have different needs and approaches in trade negotiations.

Topics: Digital trade, Trade negotiations, Developing countries

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Connectivity is crucial for trade in the digital economy

Supporting facts:

• Javier has highlighted the importance of connectivity for trade.

• Without internet, trade will not be possible.

Topics: digital trade, connectivity, trade assistance, digital economy

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For trade in the digital economy, there’s a need for change in development cooperation

Supporting facts:

• There’s a need to change mindset in terms of trade assistance and development cooperation.

Topics: digital economy, development cooperation, trade assistance

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Report

The speakers’ points revealed various insightful aspects of the discussions on digital trade. One notable issue highlighted is the lack of digital readiness, which hinders the full engagement of countries in global talks on e-commerce and digital trade. These discussions can be highly technical, and countries that lack digital readiness face challenges in effectively participating.

This gap between multinational negotiations and local implementation creates a regulatory discrepancy. Another topic of discussion was the disparity in approaches and thematic topics covered in digital trade negotiations. African countries frequently prioritize infrastructure, jobs, and market access to ICT goods, while developed countries focus more on cybersecurity, privacy, and data flows.

This disparity in priorities and approaches adds complexity to the negotiations. The intensity and structure of the negotiation processes were also identified as obstacles to full engagement. The demanding nature of these procedures, coupled with resource requirements, can be overwhelming for countries with limited resources.

The parallel small group format and connection requirements with the capital further intensify these challenges. To address these issues, it was suggested that countries initiate regional conversations before engaging in global discussions. This approach allows countries to better understand how to approach digital trade, considering their specific needs and challenges.

Regional discussions are seen as a preferred starting point due to concerns over having rules dictated by others based on historical backgrounds. Lowering barriers of entry and reducing tariff and non-tariff barriers are crucial for supporting e-commerce development. Harmonizing regulations is essential to facilitate international trade, enabling businesses to focus more on innovation and expand markets.

Digital skills and literacy were emphasized as important for SMEs, especially those in informal sectors. Many SMEs operate in informal sectors, and limited digital literacy hinders their ability to adopt advanced technology or upgrade their operations. Public-private partnerships are crucial for improving digital literacy among SMEs and supporting their growth in the digital economy.

There is a growing concern regarding security measures and investment screenings, which can obstruct international trade. These measures make it more challenging for international companies to engage in trade and hinder the free flow of goods and services across borders.

The analysis also highlighted the need to consider diverse policies that impact a country’s ability to export in digital trade negotiations. Developing countries and those facing specific challenges, such as fluctuating currencies, may have different needs and approaches. Inclusive and fair digital trade agreements should consider these factors.

In summary, the analysis underscores the significance of digital readiness, regional and global discussions, barriers reduction, digital literacy improvement, regulation harmonization, and inclusive negotiation processes in advancing digital trade. Connectivity is crucial in the digital economy, and development cooperation should be adapted to support trade in this context.

It is also important for policymakers to identify regulatory gaps and communicate specific needs for development assistance that can be addressed by the global development community. By considering these factors, a more inclusive and prosperous environment for digital trade can be fostered.

Arguments

Digital transformation is profoundly changing individuals’ lives and firms’ operations, bringing them into international trade more than ever

Supporting facts:

• Digital connectivity reduces the cost of engaging in international trade

• Digital trade can enable more inclusive outcomes

Topics: Digital Trade, Digital Transformation, International Trade

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H.E. Ronald Saborio appreciates how digitalization led to more participation and inclusivity in trade

Supporting facts:

• Javier’s presentation highlighted that digital tools lead to greater export propensity of smaller firms and women-owned enterprises relative to larger firms

• Digitalization has been referred as a leveler that offers new opportunities.

Topics: Digitalization, Inclusivity in trade

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Raise concerns over the increase in barriers in digital trade

Supporting facts:

• Barriers and restrictions in digital trade are increasing

• The ambassador referenced the return of ‘Leviathan’ in the trade context since the early 2000s

Topics: Trade Barriers, Digital Trade

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Digital trade has significantly benefited small and medium-sized enterprises (SMEs) in Indonesia

Supporting facts:

• Adoption of digital technology has increased productivity and lowered costs for SMEs

• SMEs have been able to expand their businesses beyond their geographical network due to digital trade

• Women-owned businesses and previously informal businesses have been able to formalize their operations through digital goods and services

Topics: Digital trade, SMEs, Indonesia

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Importance of connection between connectivity and global interaction

Supporting facts:

• Digital transformation has facilitated global interaction and international work

• Digital transformation has opened doors to engage global professionals

Topics: Digital Transformation, Globalization

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The resilience of IT activity despite COVID and invasions

Supporting facts:

• IT activity coped with the difficulties of the pandemic and invasion

• IT services sector grew despite these setbacks

Topics: Resilience, IT industry, COVID-19, Invasions

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Digital products such as remote education facilitated by digital transformation

Supporting facts:

• Companies have been able to create digital platforms for various sectors including education

Topics: Remote Education, Digital Products, Digital Transformation

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Digital readiness is crucial for engagement in global economies

Supporting facts:

• Emma Savenborg’s study found that the lack of digital readiness among certain countries, particularly in Africa, was a key factor in their absence from global discussions.

• Costa Rica’s experience validates this point, where its decision to join the ITA led to a boom in its IT sector, becoming its most important export sector.

Topics: Digital Infrastructure, Trade Policies, Global Economy

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Emphasizes the need for trust in international trade negotiations

Supporting facts:

• Mentions the lack of trust in WTO negotiations

• References the more trust-based process of joining OECD

• Advocates for adoption of policies before legislation, given a framework of trust

Topics: WTO, OECD, Trade, Negotiations

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Believes in the value of learning from best practices and peer support

Supporting facts:

• Compares WTO and OECD practices, finding the latter’s focus on best practices and peer support appealing

• Talks about how Costa Rica learned from other nations during its industrialization process

Topics: WTO, OECD, Trade, Best Practices

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H.E. Ronald Saborio believes in the need for transparency in e-commerce negotiations

Supporting facts:

• Mentioned the progress from the Trade Facilitation Agreement and the Investment Facilitation Agreement for Development

• Suggests the creation of an e-commerce facilitation agreement

Topics: e-commerce, negotiations, transparency

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Report

Digital transformation is fundamentally reshaping individuals’ lives and the operations of businesses, leading to increased engagement in international trade. This shift towards digital trade has the potential to level the playing field, but it requires a holistic approach to digital trade policy.

This approach should consider issues such as digital skills, technology adoption, and access to digital networks. One of the key benefits of digitalisation is its ability to bring about greater participation and inclusivity in trade. Smaller firms and women-owned enterprises are finding digital tools to be essential in expanding their export opportunities.

Digitalisation has been referred to as a leveller, offering new opportunities for these groups. However, there are concerns over the increasing barriers and restrictions in digital trade. Barriers are impeding the growth and potential benefits of digitalisation in trade. It is important to address these barriers through regulatory coherence, ensuring security, and establishing predictability in the digital trade environment.

Uncertainty and continuously changing regulatory frameworks hinder businesses from expanding and operating effectively in the digital trade landscape. For digital trade to truly benefit everyone, certain conditions need to be met at both domestic and international levels. A supportive domestic environment is vital, encompassing areas such as domestic policies, education, and infrastructure.

At the international level, efforts through plurilateral negotiations at the World Trade Organisation (WTO) and regional trade agreements are essential in facilitating digital trade. Another significant aspect is the positive impact of digital trade on small and medium-sized enterprises (SMEs).

Adoption of digital technology has led to increased productivity and lower costs for these businesses. Furthermore, digital trade has enabled SMEs to expand their operations beyond their local networks. This has been particularly beneficial for women-owned businesses and previously informal businesses, allowing them to formalise their operations through digital goods and services.

Amidst the benefits of digital trade, challenges remain. Regulatory coherence and compliance in different markets can be complex and pose obstacles to businesses. Different markets have diverse regulations, and navigating this landscape requires the help of digital transformation and compliance officers.

The discussions and narrative in the WTO should be less ideological and more grounded in the reality of industry stakeholders. It is crucial to base trade negotiations on real experiences. Trust is also vital in international trade negotiations. The need for trust is emphasised, and international trade negotiations should be built on trust rather than relying solely on legislation and policies.

Digital readiness is crucial for engagement in global economies. Countries with a lack of digital readiness, particularly in Africa, may be absent from global discussions. Having the necessary digital infrastructure, skills, and policies is essential for countries to actively participate in global economies.

The case of Costa Rica highlights the importance of digital readiness, as the country’s decision to join the Information Technology Agreement (ITA) resulted in a boom in its IT sector, becoming its most important export sector. A future-focused approach to shaping trade policies is advocated, as demonstrated by Costa Rica’s experience.

Rather than basing trade policies solely on current production, Costa Rica adopted a forward-thinking approach, leading to the growth of its IT sector. This strategy allowed the country to adapt and capitalise on emerging opportunities. When it comes to African countries, it is suggested that they may benefit more from greater involvement in global trade discussions rather than focusing solely on regional integration.

Learning from the experiences of other countries, especially those that have successfully transitioned from agriculture-based to industrialised economies, can provide valuable insights for African nations. In conclusion, digital trade, driven by digital transformation, is reshaping international trade and providing new opportunities for businesses and individuals.

A holistic approach to digital trade policy is necessary to ensure that the benefits are realised by all. This includes addressing barriers, fostering regulatory coherence, and embracing digital readiness. By doing so, digital trade can contribute to global economic growth, reduce inequalities, and promote inclusive and sustainable development.

Arguments

A 1% increase in digital connectivity leads to a 2.1% increase in domestic sales and a 1.6% increase in international sales.

Supporting facts:

• Econometric work by the OECD has highlighted these benefits.

• These benefits are also present for middle-income and low-income countries. It’s also valid for all sectors meaning companies in any fields like pens, mobile phones or tourism services will all benefit by embracing digitalization.

• A direct correlation can be observed between the use of digital tools and greater export propensity, particularly for smaller firms and women-owned enterprises.

Topics: Digitalization, Trade, Market

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The benefits of digitalization are not automatic and have related risks which require certain conditions to be met for those benefits to materialize.

Supporting facts:

• A regulatory environment that supports digital trade is crucial.

• As per the Digital Services Trade Restrictiveness Index, restrictions that affect digital trades have been increasing.

• However, as per the index, there are also positive changes, particularly in Africa with many countries implementing digital trade supporting policies.

Topics: Digitalization, Digital Trade, Regulation

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Digital readiness is key in ensuring benefits from digital trade

Supporting facts:

• Connectivity skills, adoption as isolated

• Ran some correlations and saw restrictions on telecommunication services are associated with higher costs for internet globally

Topics: Digital Connectivity, Infrastructure, Regulations

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The recent change in the United States’ position towards digital trade in trade agreements has created disruption

Supporting facts:

• The offensive interest of the US have always been about a strong JSI, which has a strong element on cross-border data flows, data localization, and source code.

• The reluctance of the US to discuss these issues has created disruption.

Topics: GSI, Digital Trade, Trade Agreements

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There is ongoing internal discussion in the US regarding their position on digital trade

Supporting facts:

• There’s been a lot of discussion between USTR and Commerce and others in the US.

Topics: United States, Digital Trade

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There is a significant gap between aid for digital trade and the actual amount of trade reliant on digital technology

Supporting facts:

• Only 0.4% of aid for trades goes to digital issues while 25% of trade is considered digital trade

Topics: Aid for Trade, Digital Economy, Digital Trade

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Participating in international discussions facilitates learning for countries to handle complex issues

Supporting facts:

• Discussions at global platforms like WTO build capacity and allow for peer-learning

• Deeper involvement in these discussions aids in understanding and managing complex topics like privacy regulations and source code exceptions

Topics: International Cooperation, Learning, Digital Trade Discussions

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An optimal balance is required when it comes to regulations

Supporting facts:

• Too many regulations affect the ability of businesses to upscale, whereas no regulations at all also cause upheaval in government policy objectives like privacy, consumer protection

• The most optimal regulatory environment is one where it is non-discriminatory and least trade restrictive

• Regulatory certainty helps businesses understand rules and achieve a balance

Topics: Trade regulations, Public and Private sector

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Report

Digitalization and digital trade have been found to offer significant benefits, not only for high-income countries but also for middle-income and low-income countries, as well as companies in all sectors. There is a direct correlation between the use of digital tools and an increase in both domestic and international sales.

Specifically, a 1% increase in digital connectivity leads to a 2.1% increase in domestic sales and a 1.6% increase in international sales, as stated by econometric work conducted by the OECD. However, realizing these benefits requires certain conditions to be met. One key condition is the presence of a regulatory environment that supports digital trade.

Unfortunately, restrictions that affect digital trade have been increasing, as indicated by the Digital Services Trade Restrictiveness Index. However, there have also been positive changes, particularly in Africa, where many countries have implemented digital trade-supporting policies. To effectively harness the benefits of digital trade, countries need to carry out both domestic and international efforts.

Domestically, the focus should be on promoting connectivity, providing the necessary skills for the digital economy, and ensuring a supportive regulatory environment. Internationally, efforts should aim to establish an international regulatory framework that facilitates digital trade. Active participation in international trade forums and discussions, such as those held at the WTO, is crucial for the development of comprehensive and effective digital trade policies.

In addition to regulatory challenges, countries must address various other issues, such as digital readiness and connectivity skills. Restrictions on telecommunication services are associated with higher costs for internet access globally. Creating an enabling environment involves reducing tariffs on devices and network equipment, as well as addressing data flow and protection issues.

The recent change in the United States’ position towards digital trade in trade agreements has caused disruptions and increased uncertainty about the future of global digital trade. While there is ongoing internal discussion in the US regarding its position on digital trade, it has taken a step back from the discussions, allowing other actors to have more prominent roles.

There is also a significant gap between the amount of aid allocated for digital trade and the actual amount of trade that relies on digital technology. Bridging this gap and providing adequate support is essential to maximize the potential of digital trade.

Participating in international discussions and observing global trade debates is invaluable for countries to build capacity and enhance their understanding of complex issues related to digital trade. Regulations are important to ensure a fair and balanced digital trade environment, but there needs to be an optimal balance.

Too many regulations can impede business expansion, while no regulations can undermine government policy objectives. The private sector plays a key role in benefiting from trade regulations, and the benefits are driven by private sector actors. Trade regulations aim to ensure that regulations are not biased against specific countries or firms.

Overall, digitalization and digital trade present great opportunities for economic growth and development. To fully realize these benefits, countries need to address regulatory challenges, promote connectivity, enhance digital skills, and strike an optimal balance in regulations. International cooperation and participation in global trade discussions are crucial for capacity building and understanding complex issues.

Arguments

Digital transformation has significantly benefited Ukrainian businesses

Supporting facts:

• Ukrainian IT service sector grew significantly during the last 30 years

• Ukrainian IT sector equals right now just $7.3 billion of US dollars

• Each IT professional in the Ukrainian economy, creates five new jobs within Local Market

Topics: Global trade, Digital transformation, Ukrainian IT sector

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Regulations and policy landscape across different countries pose challenges

Supporting facts:

• Legislation and policy landscape is diverse especially when operating in multiple countries like the United States, UK, European Union

Topics: Policy making, Regulations, Legal requirements

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Governments should create a favorable policy framework that encourages digital readiness

Supporting facts:

• It was difficult to incorporate companies and open bank accounts in US during COVID-19 pandemic due to lack of digital solutions

• Digital readiness should enable identity verification, digital services from the government, company incorporation, permits, certification processes, opening of bank accounts

Topics: Government policy, Digital transformation, Digital Readiness

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The need for investment and provision of tax credits, R&D grants to startups since they are the main drivers of digital transformation

Supporting facts:

• Startups create platforms and enablers for digital transformation

Topics: Startup funding, R&D grants, Tax credits

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The need to continue investing in developing networking platforms for small companies from developed nations to interact with local companies in developed nations

Supporting facts:

• Participation in Stockholm Tech Summit led to successful contracts for the speaker’s company

Topics: Networking platforms, Business development, International trade

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Investment in startups working in alternative energy sources and internet accessibility is recommended

Supporting facts:

• Taras faced a similar problem in Kyiv when there were heavy missile attacks on infrastructure and they lost their connectivity, which they resolved with the help of alternative sources like Starlinks and alternative energy sources

Topics: Investment, Startups, Alternative energy sources, Internet accessibility

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There should be competition and emergence of new technologies for internet access, not just through traditional cables

Topics: Competition, Technological innovation, Internet access

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Private sector should be involved in policy decision making

Supporting facts:

• Before any policy is enforced, there should be a lot of working groups working jointly together with the private sector

• There is a concept in IT software engineering called design syncing workshops, where subject matter experts from different businesses and policy-making are involved

Topics: Policy-making, Private Sector

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Report

The analysis examines various arguments and stances regarding digital transformation and policy-making in the IT sector in Ukraine. It highlights the significant growth of the Ukrainian IT sector over the past 30 years, attributing this growth to the benefits derived from digital transformation.

The sector currently amounts to approximately $7.3 billion in US dollars. Furthermore, it is noted that each IT professional in the Ukrainian economy creates five new jobs within the local market, emphasizing the positive impact of the sector on employment and economic growth.

However, the analysis also raises concerns regarding the challenges posed by diverse regulations and policy landscapes across different countries. Operating in multiple jurisdictions, such as the United States, UK, and European Union, presents difficulties due to the varying legislative and policy frameworks.

This observation underscores the need for standardized and unified global standards for digital transformation to streamline operations and promote efficiency. The analysis also emphasizes the significant role of governments in creating a favorable policy framework that encourages digital readiness. It argues that governments should prioritize the establishment of policies that enable identity verification, digital services from the government, company incorporation, permits, certification processes, and the opening of bank accounts.

These measures are seen as crucial for facilitating business operations and promoting digital transformation. Furthermore, the analysis highlights the importance of supporting startups as the main drivers of digital transformation. It advocates for investment in startups and the provision of tax credits and research and development (R&D) grants.

Startups are recognized for creating platforms and enablers for digital transformation. However, it also notes the presence of barriers that restrict startups with government grants to working only with local entities. This restriction is criticized, with the argument that startups should have the freedom to collaborate with international companies to access quality and innovative services at lower costs.

Additionally, the analysis raises concerns about the impact of withholding taxes on international services. It shares a negative sentiment towards withholding taxes, explaining how they can hinder digital transformation initiatives. An example is provided where withholding taxes were encountered during the digital transformation of a hospital in Latin America.

This observation supports the argument against the imposition of such taxes. The analysis also highlights the value of networking platforms, particularly for small companies from developed nations to interact with local companies in developing nations. It cites a successful experience where participation in the Stockholm Tech Summit led to the speaker’s company securing contracts.

This underscores the importance of continued investment in developing networking platforms to foster collaborations and business opportunities. Furthermore, the analysis advocates for investment in startups focused on alternative energy sources and internet accessibility. It implies that such investment is recommended, as demonstrated through an example where a startup in Kyiv faced infrastructure damage and temporary connectivity loss due to missile attacks.

The startup successfully resolved this issue with the help of alternative sources such as Starlinks and alternative energy sources. The analysis also stresses the significance of policy-making that addresses connectivity and infrastructure. It emphasizes that policy-making should prioritize these areas to ensure the provision of stable and reliable digital services.

An example is provided where Kyiv faced heavy missile attacks, leading to infrastructure damage and connectivity issues, reflecting the temporary setbacks that can occur without proper policy measures in place. Moreover, the analysis argues for the competition and emergence of new technologies for internet access, beyond traditional cables.

It asserts that there should be a focus on promoting innovation and the adoption of advanced technologies to enhance internet access capabilities. Lastly, the analysis highlights the importance of involving the private sector in policy decision making. It advocates for the collaboration of working groups composed of subject matter experts from different businesses and policy-making entities.

By involving the private sector in the policy-making process, there is an increased likelihood of better acceptance and buy-in from those impacted by the policies. In conclusion, the analysis explores various arguments and stances relating to digital transformation and policy-making in the IT sector in Ukraine.

It recognizes the growth and benefits derived from digital transformation but also highlights challenges stemming from diverse regulations and policy landscapes. The analysis calls for standardized global standards, favorable policy frameworks, support for startups, removal of barriers, and the involvement of the private sector in policy decision making.

By addressing these issues, the Ukrainian IT sector can continue to thrive and contribute to economic growth and innovation.