• Home
  • About RSIS
    • Introduction
    • Building the Foundations
    • Welcome Message
    • Board of Governors
    • Staff Profiles
      • Executive Deputy Chairman’s Office
      • Dean’s Office
      • Management
      • Distinguished Fellows
      • Faculty and Research
      • Associate Research Fellows, Senior Analysts and Research Analysts
      • Visiting Fellows
      • Adjunct Fellows
      • Administrative Staff
    • Honours and Awards for RSIS Staff and Students
    • RSIS Endowment Fund
    • Endowed Professorships
    • Career Opportunities
    • Getting to RSIS
  • Research
    • Research Centres
      • Centre for Multilateralism Studies (CMS)
      • Centre for Non-Traditional Security Studies (NTS Centre)
      • Centre of Excellence for National Security (CENS)
      • Institute of Defence and Strategic Studies (IDSS)
      • International Centre for Political Violence and Terrorism Research (ICPVTR)
    • Research Programmes
      • National Security Studies Programme (NSSP)
      • Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
    • [email protected] Newsletter
    • Other Research
      • Future Issues And Technology (FIT)
      • Science and Technology Studies Programme (STSP) (2017-2020)
  • Graduate Education
    • Graduate Programmes Office
    • Overview
    • MSc (Asian Studies)
    • MSc (International Political Economy)
    • MSc (International Relations)
    • MSc (Strategic Studies)
    • NTU-Warwick Double Masters Programme
    • PhD Programme
    • Exchange Partners and Programmes
    • How to Apply
    • Financial Assistance
    • Meet the Admissions Team: Information Sessions and other events
    • RSIS Alumni
  • Alumni & Networks
    • Alumni
    • Asia-Pacific Programme for Senior Military Officers (APPSMO)
    • Asia-Pacific Programme for Senior National Security Officers (APPSNO)
    • SRP Executive Programme
    • Terrorism Analyst Training Course (TATC)
  • Publications
    • RSIS Publications
      • Annual Reviews
      • Books
      • Bulletins and Newsletters
      • Commentaries
      • Counter Terrorist Trends and Analyses
      • Commemorative / Event Reports
      • IDSS Paper
      • Interreligious Relations
      • Monographs
      • NTS Insight
      • Policy Reports
      • Working Papers
      • RSIS Publications for the Year
    • Glossary of Abbreviations
    • External Publications
      • Authored Books
      • Journal Articles
      • Edited Books
      • Chapters in Edited Books
      • Policy Reports
      • Working Papers
      • Op-Eds
      • External Publications for the Year
    • Policy-relevant Articles Given RSIS Award
  • Media
    • Cohesive Societies
    • Great Powers
    • Sustainable Security
    • COVID-19 Resources
    • Other Resource Pages
    • Media Highlights
    • News Releases
    • Speeches
    • Vidcast Channel
    • Audio/Video Forums
  • Events
  • Giving
  • Contact Us
Facebook
Twitter
YouTube
RSISVideoCast RSISVideoCast rsis.sg
Linkedin
instagram instagram rsis.sg
RSS
  • Home
  • About RSIS
      • Introduction
      • Building the Foundations
      • Welcome Message
      • Board of Governors
      • Staff Profiles
        • Executive Deputy Chairman’s Office
        • Dean’s Office
        • Management
        • Distinguished Fellows
        • Faculty and Research
        • Associate Research Fellows, Senior Analysts and Research Analysts
        • Visiting Fellows
        • Adjunct Fellows
        • Administrative Staff
      • Honours and Awards for RSIS Staff and Students
      • RSIS Endowment Fund
      • Endowed Professorships
      • Career Opportunities
      • Getting to RSIS
  • Research
      • Research Centres
        • Centre for Multilateralism Studies (CMS)
        • Centre for Non-Traditional Security Studies (NTS Centre)
        • Centre of Excellence for National Security (CENS)
        • Institute of Defence and Strategic Studies (IDSS)
        • International Centre for Political Violence and Terrorism Research (ICPVTR)
      • Research Programmes
        • National Security Studies Programme (NSSP)
        • Studies in Inter-Religious Relations in Plural Societies (SRP) Programme
      • [email protected] Newsletter
      • Other Research
        • Future Issues And Technology (FIT)
        • Science and Technology Studies Programme (STSP) (2017-2020)
  • Graduate Education
      • Graduate Programmes Office
      • Overview
      • MSc (Asian Studies)
      • MSc (International Political Economy)
      • MSc (International Relations)
      • MSc (Strategic Studies)
      • NTU-Warwick Double Masters Programme
      • PhD Programme
      • Exchange Partners and Programmes
      • How to Apply
      • Financial Assistance
      • Meet the Admissions Team: Information Sessions and other events
      • RSIS Alumni
  • Alumni & Networks
      • Alumni
      • Asia-Pacific Programme for Senior Military Officers (APPSMO)
      • Asia-Pacific Programme for Senior National Security Officers (APPSNO)
      • SRP Executive Programme
      • Terrorism Analyst Training Course (TATC)
  • Publications
      • RSIS Publications
        • Annual Reviews
        • Books
        • Bulletins and Newsletters
        • Commentaries
        • Counter Terrorist Trends and Analyses
        • Commemorative / Event Reports
        • IDSS Paper
        • Interreligious Relations
        • Monographs
        • NTS Insight
        • Policy Reports
        • Working Papers
        • RSIS Publications for the Year
      • Glossary of Abbreviations
      • External Publications
        • Authored Books
        • Journal Articles
        • Edited Books
        • Chapters in Edited Books
        • Policy Reports
        • Working Papers
        • Op-Eds
        • External Publications for the Year
      • Policy-relevant Articles Given RSIS Award
  • Media
      • Cohesive Societies
      • Great Powers
      • Sustainable Security
      • COVID-19 Resources
      • Other Resource Pages
      • Media Highlights
      • News Releases
      • Speeches
      • Vidcast Channel
      • Audio/Video Forums
  • Events
  • Giving
  • Contact Us
  • instagram instagram rsis.sg
Connect

Getting to RSIS

Map

Address

Nanyang Technological University
Block S4, Level B3,
50 Nanyang Avenue,
Singapore 639798

View location on Google maps Click here for directions to RSIS

Get in Touch

    Connect with Us

      rsis.ntu
      rsis_ntu
      rsisntu
    RSISVideoCast RSISVideoCast rsisvideocast
      school/rsis-ntu
    instagram instagram rsis.sg
      RSS
    Subscribe to RSIS Publications
    Subscribe to RSIS Events

    RSIS Intranet

    S. Rajaratnam School of International Studies Think Tank and Graduate School Ponder The Improbable Since 1966
    Nanyang Technological University Nanyang Technological University

    Skip to content

     
    • RSIS
    • Publication
    • RSIS Publications
    • Sustaining Trade under Cloudy Prospects – Global Digital Economy: Headwinds Ahead
    • Annual Reviews
    • Books
    • Bulletins and Newsletters
    • Commentaries
    • Counter Terrorist Trends and Analyses
    • Commemorative / Event Reports
    • IDSS Paper
    • Interreligious Relations
    • Monographs
    • NTS Insight
    • Policy Reports
    • Working Papers
    • RSIS Publications for the Year

    CO22038 | Sustaining Trade under Cloudy Prospects – Global Digital Economy: Headwinds Ahead
    Amalina Anuar

    12 April 2022

    download pdf
    RSIS Commentary is a platform to provide timely and, where appropriate, policy-relevant commentary and analysis of topical and contemporary issues. The authors’ views are their own and do not represent the official position of the S. Rajaratnam School of International Studies (RSIS), NTU. These commentaries may be reproduced with prior permission from RSIS and due credit to the author(s) and RSIS. Please email to Editor RSIS Commentary at [email protected].

    SYNOPSIS

    Although the digital economy holds much promise, challenges such as rising inequality and digitalisation’s climate impact could stand in the way of realising a sustainable global digital economy. What role could international trade and the WTO play in alleviating these risks?

    network
    Source: Global Network, Geralt, Pixabay

    COMMENTARY

    THE DIGITAL economy is moving full steam ahead in a post-COVID era, but this growth is not without downsides. Just as digitalisation carries the promise of economic growth and development, it can also bear the perils of rising inequality and environmental harm — factors which, if not tackled, could cast a long shadow over the digital economy’s sustainability.

    Currently, over 80 economies are negotiating a multilateral digital economy framework at the World Trade Organisation (WTO). How might international trade be useful in addressing these headwinds, and what role could the WTO play in fostering a more sustainable global digital economy?

    Dangerous Grounds: Data Divide & Climate Impacts

    In some ways, the risks of inequality are inherent to the digital economy because it tends towards winner-takes-all outcomes. The biggest asset in the digital economy is data, but the value of data lies in the ownership, collection and processing of big datasets to derive meaningful insights from a sea of information.

    Yet smaller businesses generally do not have these capabilities and resources. Rather, Internet platforms and Big Tech companies dominate these stages of the data value chain. The spoils of the digital economy can hence concentrate in the hands of a few market players, especially when bigger businesses buy out smaller competitors to improve their market advantage.

    Consequently, there is an emerging data divide within countries and between them too, since developing countries mainly provide data or data storage centres while companies from developed countries dominate the higher rungs of the data value chain. This is on top of the digital divide that stems from poor access to the digital economy or poor digital skills.

    Digitalisation’s climate impact presents yet another challenge to the digital economy’s sustainability.

    It is true that technological advancements could alleviate environmental pressures. Still, this narrative elides how the production processes of vital digital technologies can be environmentally detrimental in itself. Semiconductors are a good example, owing to their resource-intensive manufacturing in terms of raw materials, water, and electricity.

    The Taiwan Semiconductor Manufacturing Company (TSMC), for instance, uses 5% of Taiwan’s electricity annually; last year, Taipei diverted water from irrigating 183,000 hectares of agricultural land to keep TSMC’s operations going. With more economies seeking to produce semiconductors domestically to achieve post-COVID supply chain resilience, digital sovereignty and geopolitical imperatives, such duplication of technology supply chains could rack up hefty environmental costs.

    Supply Chain Resilience

    Manufacturing processes could become greener through using recycled materials, for instance, with such a transition to a circular digital economy having the added benefit of strengthening supply chain resilience.

    Conflicts and crises such as the Ukraine invasion would have less impact on technology supply chains in the future, because the circular economy enables some diversification of critical raw material sources.

    At this stage, however, the circular digital economy is still nascent. Around 57.4 million tonnes of electronic waste (e-waste) were generated in 2021, but less than 20% of e-waste is effectively recycled.

    A significant amount of materials are not recovered, including precious metals valued at around US$57 billion, and some hazardous materials are dumped illegally in developing countries that have less capacity to tackle this waste.

    Course Correction

    International trade does not lie at the root of these risks. Nonetheless, it can be a useful tool in setting the course towards greater digital sustainability.

    The link between trade and the data divide is perhaps the most straightforward. A WTO e-commerce multilateral agreement would avail a much needed set of global data rules. This could provide data governance templates for member economies lacking data laws, set guardrails against data dependencies and exploitation, and facilitate capacity-building to enable participation in the data-driven economy in exchange for market access.

    Despite progress in tackling low-hanging fruit such as e-signatures, however, a multilateral agreement may not yet be on the cards. Major economies — particularly the United States and China — cannot agree on the contentious issues of cross-border data flows and source codes.

    This does not mean that an agreement is impossible. There have been points of convergence between Washington’s, Beijing’s, and the European Union’s digital governance models respectively. Going forward, regional trade agreements and minilaterals that can further minimise the gaps between models should be supported; China’s application to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is a case in point.

    In much the same vein, the US and China could also look into limiting their concessions to each other rather than invoking broad-brush national security exemptions that hold the agreement hostage.

    Building in development-differentiated trade flexibilities may likewise be useful, as many developing economies do not feel ready to accept more ambitious provisions. Modelling negotiations after the 2013 Trade Facilitation Agreement could help build the consensus necessary to deliver a deal and close the data divide.

    Green Economy Futures

    Trade’s critical role in coping with climate change is arguably in facilitating the movement of second-hand and repurposed materials across borders. This would complement the Basel Convention, which only regulates the import and export of hazardous trade.

    Over the past few years, WTO members have ramped up discussions on sustainable trade. These talks have nevertheless so far focused on fossil fuel subsidies and plastics pollution, with the circular digital economy garnering less attention. This could be partly attributed to the lack of data on circular economy trade flows — particularly for e-waste — that can inform policymaking.

    Supporting exploratory work at the WTO on this topic, such as by establishing working groups on secondary raw materials and remanufactured goods, may thus be more appropriate at this stage before moving towards harmonising standards on e-waste and circular economy regulations.

    Overall, governments must shore up domestic support for trade and the WTO, given their significance to a more sustainable digital economy and economic multilateralism.

    The benefits of trade — and even the digital economy — must be communicated without over-valorising it, because this can lead to disappointment and weakened support for globalisation and digitalisation. To that end, managing expectations will be key to securing a sustainable digital economy alongside more technical solutions to its various ills.

    About the Author

    Amalina Anuar is a Senior Analyst with the Centre for Multilateralism Studies (CMS), S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. This is part of an RSIS series on the 12ᵗʰ RSIS-WTO Parliamentarian Workshop, 10-12 May 2022.

    Categories: Commentaries / Country and Region Studies / International Politics and Security / Non-Traditional Security / Regionalism and Multilateralism / Americas / East Asia and Asia Pacific / Europe / Global / South Asia / Southeast Asia and ASEAN

    Last updated on 13/04/2022

    comments powered by Disqus
    RSIS Commentary is a platform to provide timely and, where appropriate, policy-relevant commentary and analysis of topical and contemporary issues. The authors’ views are their own and do not represent the official position of the S. Rajaratnam School of International Studies (RSIS), NTU. These commentaries may be reproduced with prior permission from RSIS and due credit to the author(s) and RSIS. Please email to Editor RSIS Commentary at [email protected].

    SYNOPSIS

    Although the digital economy holds much promise, challenges such as rising inequality and digitalisation’s climate impact could stand in the way of realising a sustainable global digital economy. What role could international trade and the WTO play in alleviating these risks?

    network
    Source: Global Network, Geralt, Pixabay

    COMMENTARY

    THE DIGITAL economy is moving full steam ahead in a post-COVID era, but this growth is not without downsides. Just as digitalisation carries the promise of economic growth and development, it can also bear the perils of rising inequality and environmental harm — factors which, if not tackled, could cast a long shadow over the digital economy’s sustainability.

    Currently, over 80 economies are negotiating a multilateral digital economy framework at the World Trade Organisation (WTO). How might international trade be useful in addressing these headwinds, and what role could the WTO play in fostering a more sustainable global digital economy?

    Dangerous Grounds: Data Divide & Climate Impacts

    In some ways, the risks of inequality are inherent to the digital economy because it tends towards winner-takes-all outcomes. The biggest asset in the digital economy is data, but the value of data lies in the ownership, collection and processing of big datasets to derive meaningful insights from a sea of information.

    Yet smaller businesses generally do not have these capabilities and resources. Rather, Internet platforms and Big Tech companies dominate these stages of the data value chain. The spoils of the digital economy can hence concentrate in the hands of a few market players, especially when bigger businesses buy out smaller competitors to improve their market advantage.

    Consequently, there is an emerging data divide within countries and between them too, since developing countries mainly provide data or data storage centres while companies from developed countries dominate the higher rungs of the data value chain. This is on top of the digital divide that stems from poor access to the digital economy or poor digital skills.

    Digitalisation’s climate impact presents yet another challenge to the digital economy’s sustainability.

    It is true that technological advancements could alleviate environmental pressures. Still, this narrative elides how the production processes of vital digital technologies can be environmentally detrimental in itself. Semiconductors are a good example, owing to their resource-intensive manufacturing in terms of raw materials, water, and electricity.

    The Taiwan Semiconductor Manufacturing Company (TSMC), for instance, uses 5% of Taiwan’s electricity annually; last year, Taipei diverted water from irrigating 183,000 hectares of agricultural land to keep TSMC’s operations going. With more economies seeking to produce semiconductors domestically to achieve post-COVID supply chain resilience, digital sovereignty and geopolitical imperatives, such duplication of technology supply chains could rack up hefty environmental costs.

    Supply Chain Resilience

    Manufacturing processes could become greener through using recycled materials, for instance, with such a transition to a circular digital economy having the added benefit of strengthening supply chain resilience.

    Conflicts and crises such as the Ukraine invasion would have less impact on technology supply chains in the future, because the circular economy enables some diversification of critical raw material sources.

    At this stage, however, the circular digital economy is still nascent. Around 57.4 million tonnes of electronic waste (e-waste) were generated in 2021, but less than 20% of e-waste is effectively recycled.

    A significant amount of materials are not recovered, including precious metals valued at around US$57 billion, and some hazardous materials are dumped illegally in developing countries that have less capacity to tackle this waste.

    Course Correction

    International trade does not lie at the root of these risks. Nonetheless, it can be a useful tool in setting the course towards greater digital sustainability.

    The link between trade and the data divide is perhaps the most straightforward. A WTO e-commerce multilateral agreement would avail a much needed set of global data rules. This could provide data governance templates for member economies lacking data laws, set guardrails against data dependencies and exploitation, and facilitate capacity-building to enable participation in the data-driven economy in exchange for market access.

    Despite progress in tackling low-hanging fruit such as e-signatures, however, a multilateral agreement may not yet be on the cards. Major economies — particularly the United States and China — cannot agree on the contentious issues of cross-border data flows and source codes.

    This does not mean that an agreement is impossible. There have been points of convergence between Washington’s, Beijing’s, and the European Union’s digital governance models respectively. Going forward, regional trade agreements and minilaterals that can further minimise the gaps between models should be supported; China’s application to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is a case in point.

    In much the same vein, the US and China could also look into limiting their concessions to each other rather than invoking broad-brush national security exemptions that hold the agreement hostage.

    Building in development-differentiated trade flexibilities may likewise be useful, as many developing economies do not feel ready to accept more ambitious provisions. Modelling negotiations after the 2013 Trade Facilitation Agreement could help build the consensus necessary to deliver a deal and close the data divide.

    Green Economy Futures

    Trade’s critical role in coping with climate change is arguably in facilitating the movement of second-hand and repurposed materials across borders. This would complement the Basel Convention, which only regulates the import and export of hazardous trade.

    Over the past few years, WTO members have ramped up discussions on sustainable trade. These talks have nevertheless so far focused on fossil fuel subsidies and plastics pollution, with the circular digital economy garnering less attention. This could be partly attributed to the lack of data on circular economy trade flows — particularly for e-waste — that can inform policymaking.

    Supporting exploratory work at the WTO on this topic, such as by establishing working groups on secondary raw materials and remanufactured goods, may thus be more appropriate at this stage before moving towards harmonising standards on e-waste and circular economy regulations.

    Overall, governments must shore up domestic support for trade and the WTO, given their significance to a more sustainable digital economy and economic multilateralism.

    The benefits of trade — and even the digital economy — must be communicated without over-valorising it, because this can lead to disappointment and weakened support for globalisation and digitalisation. To that end, managing expectations will be key to securing a sustainable digital economy alongside more technical solutions to its various ills.

    About the Author

    Amalina Anuar is a Senior Analyst with the Centre for Multilateralism Studies (CMS), S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. This is part of an RSIS series on the 12ᵗʰ RSIS-WTO Parliamentarian Workshop, 10-12 May 2022.

    Categories: Commentaries / Country and Region Studies / International Politics and Security / Non-Traditional Security / Regionalism and Multilateralism

    Last updated on 13/04/2022

    Back to top

    Terms of Use | Privacy Statement
    Copyright © S. Rajaratnam School of International Studies. All rights reserved.
    This site uses cookies to offer you a better browsing experience. By continuing, you are agreeing to the use of cookies on your device as described in our privacy policy. Learn more
    OK
    Latest Book
    Sustaining Trade under Cloudy Prospects – Global Digital Economy: Headwinds Ahead

    SYNOPSIS

    Although the digital economy holds much promise, challenges such as rising inequality and digitalisation’s climate impact could stand in the way of ...
    more info