Japan: FTA

Alongside the US, Japan has been notable as one of the most active countries that has supported more liberalised digital trade rules.

Japan has included Electronic Commerce provisions within FTA, and is increasingly expanding Electronic Commerce chapters to include far reaching rules on digital trade. Economic Partner Agreements with Australia (2015) and the EU (2019) are examples of this.

The Japan Economic Partner Agreement with Mongolia (2016) has been highlighted as one of the most controversial agreement in terms of digital trade. It is one of the few examples where a powerful technological leading nation has included a significant chapter on digital trade in an agreement with a developing country.

In this case, the agreement includes strong binding provisions on issues such as data localisation and source code disclosure. Some policy makers have argued that these rules are problematic. For a digital latecomer nation such as Mongolia it is unclear if these rules are suitable for long term digital expansion, and are likely to have emerged from the uneven power of the negotiators in this agreement.

Leadership of Japan on digital trade rules was highlighted with the signatory of a specific “digital trade agreement” with the US in 2019. This was effectively a standalone digital trade chapter agreed between the two nations. It is a comprehensive agreement which mirrors many of details of the USMCA.

As one of the few between two advanced digital leaders, it can be seen as one of the largest agreements on digital trade.