In the twenty-first century, production processes and international trade in goods and services are being revolutionized by developments in information and communications technology. For many products, global production networks have rendered the label Made in Country X meaningless. With an increasing number of services, both for end-users and as inputs, being provided online, it becomes increasingly difficult to locate where value-added is being produced. This article seeks to document the impact of new technologies on international trade and to analyse the policy implications at the national and global level. A turning point is identified in the mid-1990s; up to 1995 there is no statistically significant relationship between internet usage and trade, but after 1997 the relationship is statistically significant. Use of the internet reduced trade costs, increased the size of trade flows and permitted greater fragmentation along global value chains. It also created opportunities for new international transactions, for example, based on ‘big data’. The article concludes with analysis of attempts to reach WTO agreements with respect to e-commerce and digitalization and of alternative fora in which these issues are being addressed, and relates the outcomes to the phenomenon of mega-regionalism.
ADB. (2018). Trade facilitation for a more inclusive and connected Asia and Pacific region. Manila, Philippines: Asian Development Bank.
2.
ADBI. (2018). Harnessing technology for more inclusive and sustainable finance in Asia and the Pacific. Tokyo, Japan: Asian Development Bank Institute.
3.
AhmadN.RibarskyJ.ReinsdorfM. (2017). Can potential mismeasurement of the digital economy explain the post-crisis slowdown in GDP and productivity growth? (OECD Statistics Working Papers No 2017/9). Paris: Organisation for Economic Co-operation and Development.
4.
AhmadN.SchreyerP. (2016). Are GDP and productivity measures up to the challenges of the digital economy?International Productivity Monitor, 30, 4–27.
5.
AkhvledianiT. (2018). International trade and growth in the EU: The role of ICT in Central and Eastern European countries (PhD thesis). Faculty of Economic Sciences, University of Warsaw, Poland.
6.
AngB. (2018). Next steps for cyber norms in ASEAN (RSIS Commentary No. 174). Singapore: Nanyang Technological University.
7.
AntràsP.ChorD. (2013). Organizing the global value chain. Econometrica, 81(6), 2127–2204.
8.
ASEAN. (2016). ASEAN investment report 2016: Foreign direct investment and MSME linkages. Jakarta, Indonesia: Association of Southeast Asian Nations.
9.
BarberoJ.Rodriguez-CrespoE. (2018). The effect of broadband on European Union trade: A regional spatial approach. The World Economy, 41(11), 2895–2913.
10.
BayhaqiA.San AndresE.Kaur SinghS. (2018). Case studies on addressing connectivity challenges in APEC economies. Singapore: Asia-Pacific Economic Cooperation Policy Support Unit.
11.
BondiettiK. (2018). Digital rules in Asia Pacific FTAs—building blocks for global rules. APEC Currents (November).
12.
ClarkeG.WallstenS. (2006). Has the Internet increased trade? Developed and developing country evidence. Economic Inquiry, 44(3), 465–484.
13.
CusolitoA. P.SafadiR.TaglioniD. (2016). Inclusive global value chains: Policy options for small and medium enterprises and low-income countries. Washington, DC: World Bank
14.
DuvalY.UtokthamC. (2014). Enabling participation of SMEs in international trade and production networks: Trade facilitation, trade finance and communication technology (Asia-Pacific Research and Training Network on Trade (ARTNeT) Working Paper No.146). Bangkok: UN-ESCAP.
15.
EU. (2015). Trade for all—towards a more responsible trade and investment policy. Luxembourg: Publications Office of the European Union.
16.
FerracaneM.van der MarelE.KrenJ. (2018). Do data policy restrictions impact the productivity performance of firms and industries? (DTE Working Paper 01). Brussels, Belgium: European Centre for International Political Economy.
17.
FinkC.MattooA.NeaguI. (2005). Assessing the impact of telecommunication costs on international trade. Journal of International Economics67(2), 428–445.
18.
FreundC.WeinholdD. (2004). On the effect of the internet on international trade. Journal of International Economics, 62(1), 171–189.
19.
GaoH. (2018). Digital or trade? The contrasting approaches of China and US to digital trade. Journal of International Economic Law, 21(2), 297–321.
20.
GelvanovskaN.MichelR.RossottoC. M. (2014). Broadband networks in the Middle East and North Africa: Accelerating high-speed internet access. Washington, DC: World Bank.
21.
GoldfarbA.TuckerC. (2019). Digital economics. Journal of Economic Literature, 57(1), 3–43.
HummelsD.SchaurG. (2013). Time as a trade barrier. American Economic Review, 103(7), 2935–2959.
24.
JuhászR.SteinwenderC. (2018). Spinning the web: The impact of ICT on trade in intermediates and technology diffusion (NBER Working Paper No. 24590). Cambridge, MA: National Bureau of Economic Research.
25.
KelseyJ. (2018). How a TPP-style E-commerce outcome in the WTO would endanger the development dimension of the GATS acquis (and potentially the WTO). Journal of International Economic Law, 21(2), 273–295.
26.
LendleA.OlarreagaM.SchroppS.VézinaP. L. (2016). There goes gravity: eBay and the death of distance. Economic Journal, 126(591), 406–441.
27.
LinY.QinY.XieZ. (2015). International technology transfer and domestic innovation: Evidence from the high-speed rail sector in China (CEP Discussion Paper 1393). London, UK: London School of Economics.
28.
LiuL.NathH. (2013). Information and communications technology and trade in emerging market economies. Emerging Markets Finance and Trade, 49(6), 67–87.
29.
LorenzD. (1991). Regionalization versus regionalism: Problems of change in the world economy. Intereconomics, 26(1), 3–10.
30.
LorenzD. (1992). Economic geography and the political economy of regionalization: The example of Western Europe. American Economic Review, 82(2), 84–87.
31.
MattooA.MeltzerJ. (2018). International data flows and privacy: The conflict and its resolution. Journal of International Economic Law, 21(4), 769–789.
32.
MeltzerJ. (2014). Supporting the internet as a platform for international trade: Opportunities for small and medium-sized enterprises and developing countries (Global Economy and Development Working Paper 69). Washington, DC: Brookings Institution.
MitchellA.MishraN. (2018). Data at the Docks: Modernising international trade law for the digital economy. Vanderbilt Journal of Entertainment and Technology Law, 20(4), 1073–1134.
35.
O’HaraK.HallW. (2018). Four Internets: The geopolitics of internet governance (CIGI Papers No. 206). Waterloo, Canada: Centre for International Governance Innovation.
36.
OvermanH.ReddingS.VenablesA. (2003). The economic geography of trade, production and income: A survey of empirics. In ChoiE. K.HarriganJ. (Eds.), Handbook of international trade (pp. 353–387). Malden, MA: Blackwell Publishing.
37.
PomfretR. (2011). Regionalism in East Asia: Why has it flourished and how far will it go?Singapore: World Scientific Publishing Company.
38.
PomfretR. (2020). China’s belt and road initiative, the Eurasian landbridge, and new mega-regionalism. Singapore: World Scientific Publishing Company.
39.
SampsonG. (2018). Challenges facing the World Trade Organization: An overview. Australian Economic Review, 51(4), 453–473.
40.
SenN. (2018). Understanding the role of the WTO in international data flows: Taking the liberalization or the regulatory autonomy path?Journal of International Economic Law, 21(2), 323–348.
41.
TanE. (2018). Cyber cooperation for ASEAN: Smoother ride on track II? (RSIS Commentary No. 197). Nanyang Technological University, Singapore.
42.
UNCTAD. (2015). Information economy report 2015: Unlocking the potential of e-commerce for developing countries. Geneva, Switzerland: United Nations Conference on Trade and Development.
43.
UNIDO. (2018). Global value chains and industrial development: Lesson from China, South-East and South Asia. Vienna, Austria: United Nations Industrial Development Organization.
44.
Volpe MartincusC.CarballoJ.GrazianoA. (2015). Customs. Journal of International Economics, 96(1), 119–137.
45.
WTO. (2018): World trade report 2018. The future of world trade: How digital technologies are transforming global commerce. Geneva, Switzerland: World Trade Organization.
