- Digital trade is growing exponentially, creating ample opportunities for New Zealanders.
- With some opining that global trade rules might not have matched digital trade’s extraordinary growth, NZ’s recently signed first trade agreement- DEPA can be a true milestone.
- Agreement is likely to come into effect before year end, offering hoard of opportunities in the emerging model of digital trade.
Facilitating virtuous trade and creating an effective framework for the digital economy is perhaps one of the key elements of progress for New Zealand’s business in 21st century, especially in a post COVID-19 world, with the country setting a classic example to have flattened the curve.
According to the New Zealand Productivity Commission-
Notably, 12 June 2020 has been inked as historically important in the trade history of New Zealand. The country ultimately signed its first ever trade agreement that focuses on concerns exclusively related to the digital economy, with Singapore and Chile- The Digital Economy Partnership Agreement (DEPA).
Interestingly marking the “new normal” of the world today, thanks to COVID-19 ramifications, the agreement was signed at an online ceremony, using e-signatures.
Unveiling DEPA - A Milestone for NZ’s Digital Trade
Agreement was signed after negotiations were largely concluded in January. Since then, the agreement underwent legal authentication, and was prepped for the Parliamentary Treaty Examination procedure before the deal was finally sealed.
DEPA will no doubt assist NZ exporters, while SMEs will take benefit of prospects that arise out of digital trade / e-commerce. It is a new initiative with small trade-dependent countries of Singapore and Chile that match thinking with NZ on many trade policies issues.
DEPA intends to complement WTO negotiations on e-commerce and build on the digital economy work underway within the OECD and other international forums.
The parties are optimistic on the Agreement generating new ideas and approaches that can be further used by members in WTO negotiations, as well as countries negotiating free trade agreements and digital trade work, along with engaging in international digital economy.
After considering a range of emerging digital economy issues and subject areas, the Agreement aims to:
- Facilitate seamless end-to-end digital trade- which includes developing secure digital identities, e-invoicing, paperless trade, fintech and e-payments
- Enable trusted data flows- personal data protection, expand access to open government data, enable cross border data flows, facilitate data innovation and regulatory sandboxes
- Build trust in digital systems- promote AI, online consumer protection, SMEs cooperation and digital inclusivity
DEPA will be a living agreement, and its membership has the scope to grow and include other WTO members that are able to meet its standards, making it an open plurilateral agreement.
Why is DEPA Important to NZ?
While discussing the importance of DEPA to NZ, one cannot possibly miss out on the apt timing of inking the Agreement- a COVID-19 world wherein considerable disruption to international trade and supply chains has wreaked havoc on businesses. The pandemic has well accentuated the significance of digital trade and related tools, making it apparent that the economy needs to persistently prosper and recoup promptly from it.
Currently, NZ has embarked on a trade recovery after winning the war with coronavirus, significant milestone for which it is garnering global acknowledgement and appreciation.
Moreover, digital technology can be a great aid to SMEs overcoming the challenges of scale and distance to enter global markets and eventually accelerate growth, support greater participation by women, M?ori, and rural communities by helping spread the benefits of trade across communities and regions.
Digital economy is also a prospect for the country to maintain diversification of exports and further build up its buoyancy to potential national and international shocks.
Enhanced convenience, lower prices, more choice and better information are other potential attributes of the Agreement that can benefit consumers.
Undoubtedly, DEPA can truly assist NZ’s COVID-19 recovery strategy, contributing to revitalisation of its trade architecture. The Agreement is a profound example of how NZ is an emerging model for other countries in progressing its trade strategies.
After PM Jacinda Ardern won hearts for sailing the country well across the pandemic, Trade and Export Growth Minister David Parker has joined the bandwagon, garnering appreciation for making DEPA a reality.