China joins talks to strike a global digital trade pact

Bloomberg

China will join a group including the US and the European Union in negotiating new rules to cover the $25 trillion e-commerce market.
The EU and 47 other members of the World Trade Organization (WTO) launched the discussions, according to a statement. If successful, a digital trade accord hashed out through the Geneva-based trade body would establish a baseline international regime for 21st century trade and reduce cross-border hurdles to e-commerce.
China, which for years has heavily restricted use of the internet inside its borders, had resisted joining the talks, raising concerns over the language in the statement advocating a “high standard outcome,” according to four people familiar with the talks who asked not to be identified because the discussions were private.
In a statement emailed to Bloomberg, China’s ambassador to the World Trade Organization, Zhang Xiangchen, said China had in the end decided to join the negotiations out of concern over a broader crisis surrounding the WTO, which has been coming under attack from the US and President Donald Trump’s administration.
“The multilateral trading system is in a deep crisis,” he said. “Against this backdrop, the launching of e-commerce negotiation will in a significant way help reinvigorate the negotiating function of the WTO, and shore up confidence in the multilateral trading system and economic globalisation.”
Robert Lighthizer, the US Trade Representative, said in a statement that the US is seeking an “ambitious, high-standard agreement that is enforceable and has the same obligations for all participants.” He called the digital economy a “powerful force for global economic growth” that should be guided by market-based rules and lowered barriers.
The inclusion of China was important because of its scale and role in the global economy, Cecilia Malmstrom, the EU’s
top trade negotiator, told Bloomberg.
With China on board the negotiations will include WTO members accounting for more than 90 percent of global trade. But it also served as a sign that the WTO still had life in it.
“It shows that the WTO is still alive and that we can take on board one of the biggest challenges on global trade — e-commerce,” Malmstrom said.
The new rules will seek to reduce barriers that prevent cross-border sales, ban duties on electronic transmissions, ensure the validity of e-contracts and e-signatures and address forced data localisation requirements, according to the EU statement.
China, which is expected to surpass the US this year as the biggest retail market in the world, adds greater weight to a potential accord.
China will likely register
$5.5 trillion in online sales this year due to the spread of its powerful online companies like Alibaba Group Holding Ltd and Baidu Inc.