Digital trade and the digital economy

A strong and dynamic digital economy requires whole of economy settings that provide the basis for investment in digital tools and processes, including trade and international engagement.

Australia is working to ensure businesses, workers and consumers are able to benefit from an open, safe, reliable, inclusive and interoperable environment for digital trade which reflects our values. Likewise, promoting Australia as a trusted and stable place to do business will encourage investment, and digital trade agreements will create opportunities for Australian business, consumers and workers.

Australia’s Digital Trade Strategy provides a framework for Australia to maximise economic growth by shaping an enabling environment for digital trade. It guides Australia’s practical action as a leader in digital trade, informing our work to develop digital trade rules to deliver commercial benefits and push back against digital protectionism.

Topics

Why is digital trade important to Australia?
What is DFAT doing to reduce barriers for Australian businesses in digital trade?
Multilateral discussions and electronic commerce negotiations
E-commerce chapters in Australia’s Free trade agreements (FTAs)
What types of rules does Australia pursue?

Why is digital trade important to Australia?

Digital trade is fundamental to our economic growth. According to the Australian Bureau of Statistics , digital trade is growing rapidly, and contributed around $136 billion to the Australian economy in 2021-22. Globally, the Organisation for Economic Co-operation and Development estimated that in 2020 digital trade represented 25 per cent of global trade, and was valued at just under US$5 trillion.

Digital trade encourages economic growth by creating new opportunities for businesses, consumers and workers. It provides easier access to overseas markets and customers, and lowers informational and cost barriers for both buyers and sellers to encourage greater participation of businesses of all sizes. Digital trade also increases productivity through the use of technology and by promoting innovation and more efficient business practices.

Data is the lifeblood of the digital economy

Data and data flows are essential for how we trade and live, underpinning daily business operations, logistics, supply chains and international communications. Today, every digital interaction involves the creation and transfer of data. Cross-border data flows are increasingly integral to businesses of all sizes across all sectors, but particularly for micro, small and medium businesses which face significant hurdles in overcoming regulatory barriers and participating in global supply chains. Restrictions on data flows can have a range of unintended consequences, including increased costs for businesses, reduced efficiencies of payment systems, difficulties for businesses in entering and understanding regulatory requirements in new markets, decreased competition, and increased exposure to cybercrime.

Australia’s digital trade rules seek to strike a balance between enabling the free flow of data and preserving Australia’s ability to regulate in the public interest, including through ensuring the protection of privacy and personal data.

Australia seeks to maximise economic growth by shaping an enabling environment that supports open and competitive digital trade and reinforcing the international rules-based trading system. To do this, Australia is pursuing rules that reduce barriers to digital trade whilst also ensuring we retain policy space to preserve Australia’s ability to regulate in key areas of public interest. We also seek to encourage cooperation on emerging digital economy issues.

Please see Australia’s Digital Trade Strategy for more information.

What is DFAT doing to reduce barriers for Australian businesses in digital trade?

As outlined in Australia’s Digital Trade Strategy and 2023-2030 Australian Cyber Security Strategy, we advocate strongly for a rules-based and open global trading environment that supports the digitalisation of trade, builds trust and confidence in the online environment and reduces barriers to digital trade.

Australia's digital trade rules focus on four broad objectives:

Trade facilitation, such as acceptance of electronic trade documents, prohibiting the charging of customs duties on electronic transmissions, digital trade standards, acceptance of e‑signatures and commitments on e‑invoicing and e‑payments.
Trust, which includes commitments on online consumer protection, personal data protection and the treatment of spam.
Cross-border flow of data, which is necessary for almost every international transaction. These rules enable the free movement of data between countries and prohibit data localisation requirements, while also providing for the protection of national security, consumers, and the personal information of Australians.
Cooperation, typically in areas like emerging technologies, cyber security, and technical assistance and capacity building to share knowledge and best-practice and support trading partners to make the most of digital trade.

DFAT and other government agencies are working with countries around the world to ensure Australian businesses and consumers benefit from the immense opportunities that digital trade offers.

Through our trade agreements we are seeking to address impediments to trade, provide business with predictability, create quality jobs, and provide more choice for consumers. We also engage in ongoing economic cooperation with our trading partners, including through the ASEAN-Australia Digital Trade Standards Initiative [PDF], Aus4ASEAN Futures Initiative and the Regional Trade for Development Program (RT4D). These efforts support our trading partners’ implementation of trade commitments, and reduce fragmentation and enhance interoperability across regulatory regimes with a view to ensuring a more transparent and predictable trading environment. These programs also help ensure that digital trade benefits are shared broadly across the ASEAN region, including for Micro, Small and Medium Enterprises (MSMEs), women and people with disabilities.

In addition, Australia’s Aid for Trade (A4T) supports developing and least developed countries (LDCs) to participate in and benefit from digital trade, including under the WTO Joint Statement Initiative on E Commerce.

Multilateral discussions and electronic commerce negotiations

We are engaged in several rule making efforts that support digital trade, including in the World Trade Organization (WTO) and the Indo‑Pacific Economic Framework (IPEF) trade pillar, and through cooperation in the Asia-Pacific Economic Cooperation (APEC) and the Organisation for Economic Cooperation (OCED).

WTO Joint Statement Initiative on E-Commerce

Australia, Japan and Singapore have jointly co convened the Joint Statement Initiative on E Commerce in the WTO since 2019.

After five years of negotiations under the Joint Statement Initiative on E Commerce, on 26 July 2024, the co convenors jointly released a stabilised text of the Agreement on Electronic Commerce [PDF], a major milestone towards setting the first digital trade rules with global reach.

Once in force, the Agreement on Electronic Commerce will benefit Australian consumers, workers and businesses, by making global digital trade faster, cheaper, fairer, and more secure.

Negotiations were launched on 25 January 2019, in the margins of the World Economic Forum in Davos, when Australia together with 75 other WTO Members issued in a joint statement announcing their intention to achieve a high standard outcome on trade-related aspects of electronic commerce [PDF]. Over the course of negotiations, the Joint Statement Initiative on E commerce expanded to include 91 WTO members, accounting for over 90 per cent of global trade.

Participation in the Joint Statement Initiative on E commerce is open to all WTO members.

Other multilateral initiatives

There is currently a WTO moratorium on imposing customs duties on electronic transmissions in place until the 14th WTO Ministerial Conference or 31 March 2026, whichever is the earlier. The moratorium has been in place since 1998 and regularly renewed at WTO Ministerial Conferences since, most recently at the 13th WTO Ministerial Conference in Abu Dhabi [PDF]. Australia is one of the countries that would like to see this moratorium made permanent.

Australia negotiated and implemented the WTO's Information Technology Agreement, which cuts tariffs on IT products to reduce costs for businesses and consumers. In December 2015, some participating members, including Australia, agreed to update the agreement and expand the coverage to cover additional goods. The expansion of the ITA was the first major tariff-cutting deal at the WTO since the original ITA. The ITA has been one of the most effective mechanisms in reducing duties on IT products thereby making IT inputs cheaper for business and consumers.

Australia also played a pivotal role in negotiating the WTO's Trade Facilitation Agreement (TFA), which entered into force for all WTO members on 22 February 2017. This agreement promotes simpler, more harmonious international trade procedures, including online submission and payment systems for customs documents. The TFA commits parties to reducing red tape and the burden of administrative costs associated with exporting and importing.

Our region has enormous potential for further digital trade growth. DFAT will continue taking part in multilateral, regional and bilateral discussions to maximise the benefits for Australian businesses and consumers.

E-commerce chapters in Australia’s Free Trade Agreements (FTAs)

Australia has e-commerce chapters in 16 of its 19 FTAs:

What types of rules does Australia pursue?

The table on the types of provisions outlines, in general, the provisions Australia pursues in its trade agreements to enable digital trade.

Provision	Description of discipline
Cooperation	Governments should cooperate on areas of mutual interest in digital trade including on cyber security matters
Creating a safe online environment	Countries should create and promote a safe online environment where users are protected from harmful content.
Cross-border transfer of information by electronic means	Countries should allow cross-border transfers of information by electronic means
Customs duties on electronic transmissions	Countries should continue the practice of not applying customs duties to electronic transmissions
Disclosure of source code	Countries should not require the transfer of or access to mass-market software source code as a condition for the import, distribution, sale or use of software
Domestic regulatory frameworks/ domestic electronic transaction frameworks	Countries should adopt or maintain legal frameworks consistent with the principles of the UN Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce (1996) and the UN Convention on the Use of Electronic Communications in International Contracts (2005)
Electronic signatures and electronic authentication	Countries should not deny a signature on the basis it is in electronic form, and should adopt a flexible approach to authentication technologies
Localisation of computing facilities	Countries should not require businesses operating in their territory to locate computing facilities (including computer servers and storage devices for processing or storing information for commercial use) within the country's borders
Online consumer protection	Countries should provide the same protections for online consumers as they do for any other consumer
Online protection of personal information	Countries should adopt or maintain a legal framework to protect the personal information of electronic commerce users from unauthorised disclosure
Paperless trading	Countries should provide for online availability of import and export documentation and electronic submission of those documents
Transparency	Countries should make available to the public any measures related to e-commerce; including online. Also, to the extent possible, provide advance publication and opportunity to comment
Unsolicited commercial electronic messages (spam)	Countries should adopt or maintain measures to allow consumers to opt out of receiving unwanted commercial messages from various sources (for example, email and SMS) from various sources and to provide that businesses only send such messages with the expressed or inferred consent of the consumer with the source of the messages identified

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