The Challenges of Adapting Trade Policies to the Digital Era

Abstract

This study focuses on digital trade policies that affect the trading of goods and services over the internet. We use the terms digital trade and ecommerce interchangeably. Earlier studies on barriers to digital trade shed light on newly erected barriers to digital trade by country and sector (see, for example, Ferracane et al. 2018). In Jan. 2021, Global Trade Alert began to build public and comprehensive records of policy changes by G20 members that affect cross-border e-commerce. However, it is difficult to find studies that include survey results from active firms conducting digital trade, or any corresponding empirical analyses. To fill this gap in the literature and inform policy practitioners and policy makers about digital trade, this study provides evidence on barriers to digital trade and the economic effect of digital trade, based on surveys of domestic firms in Korea and data collected from random sampling. After briefly examining the prospects of e-commerce talks at the WTO and characterizing digital trade rules at the FTA level, the study concludes by providing suggestions for major policy tasks and mid- to longterm directions of Korea’s digital trade policy.