The Trans-Pacific Partnership (TPP) was historic as the first regional agreement to include a substantial digital trade chapter.
The importance of the TPP is that digital trade rules included in this agreement largely remain the template for digital trade rules today.
The TPP was a regional trade agreement signed in 2016. It included twelve countries bordering the Pacific – Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile, Peru and the US.
After the election of Donald Trump, the US withdrew from the TPP in 2017 prior to it being ratified. The remaining eleven countries returned to negotiating as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP was signed in 2018 and is currently under ratification by the signatories.
Mega-regional trade agreements
Given the lack of progress in negotiations in the WTO in the 2000’s, US trade policy moved towards promoting mega-trade agreements that are often called ’21st Century trade agreement’. This included the TPP, TTIP and TISA.
One essential aspect of the TPP was the inclusion of rules for digital trade. This was seen to be important to protect the global digital leadership of the United States and was sold to other nations as important facilitating cross-border digital trade.
The inclusion of digital trade was supported by the Obama administration at the time. Many of the policies reflect previous US trade policy adopted by the US Trade Representative and lobbied for by tech firms.
Key issues covered in the TPP are in the chapter called “electronic commerce”. Key issue-areas include:
- Prohibition of duties for digital products
- Non-discrimination principles on digital trade
- Measures to stop partners from forcing companies to localize their computing services or data
- Prohibiting trading partners from requiring companies to purchase and utilize local technology
- Provisions to prevent forced disclosure of source code
The CPTPP has broadly kept the same clauses intact