14 Oct 2020    Working Papers
Elsig, Manfred , Klotz, Sebastian

Digital trade rules in preferential trade agreements: Is there a WTO impact?

WTI Working Paper No. 04/2020 by Manfred Elsig and Sebastian Klotz

For a long time, the World Trade Organization (WTO) has been seen as the privileged multilateral regime to regulate trade. However, given its slow progress in negotiating new trade rules, countries have increasingly shifted their focus to preferential trade agreements (PTAs) since the early 2000s. Focusing on a timely and increasingly important topic (digital trade) we explore how countries’ interactions in the WTO impacts on their approaches in designing rules in PTAs. Using newly collected data on digital trade-related provisions in almost 350 PTAs signed since 2000, we find that countries’ participation in digital trade-related initiatives at the WTO spill over to the design of their PTAs. More precisely, we show that countries which actively participate in the discussions of the WTO Work Programme on Electronic Commerce are more likely to negotiate ambitious commitments on digital trade in their PTAs. Furthermore, our analysis indicates that countries which participate in the WTO-based plurilateral Information Technology Agreement (ITA) are more likely to commit to deeper cooperation in the area of digital trade. More broadly, this article contributes to our understanding of the dynamics of regime complexity and how interaction in the multilateral system is associated with regional and bilateral trade regimes.

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Digital trade rules in preferential trade agreements: Is there a WTO impact?