As in other types of trade. The balance between rules and power in digital trade is ever evolving.
This is particularly important in the recent moment with the turn toward national economic agendas in the US, and the decline of the WTO and large trade deals.
The US in the 2020s
The US is increasingly seen to use their power to shape trade, and prevent rules across nations which are not in their interest. This is particuarely notable during the Trump II administations (and to a less extent the earlier Trump I and Biden administration).
In terms of digital, there is an increaingly close connection between government and tech firms in the US. The US administration has therefore become more active in threatening across-the-board tariffs for countries which regulate the digital economy.
For example, both the EU (due to their Digital Service Act and Digital Markets Act) and Brazil (due to its digital payment infrastrucutre that is perceived to prevent US tech firms) have been threatened with significant tariffs.
Power rather than agreements?
For exporting countries, debates on “digital trade” then become one part of negotiations around trade with the US. Rather than agree to formal rules about the digital economy, such as FTA. It may be that countries are pushed to withdraw, or water down their regulation under pressure from the US
The above account is mainly relevant to the US, but other countries have also sought to use their power for change in digital regulation in similar ways. For example, China has sought entrance for some of its financial payments firms in South East Asia during negotiations of trade.
Image credit: President Trump Meets with Mark Zuckerberg by the White House. Public domain photo