Deterring Digital Trade Without Discrimination

Abstract

Commercial activity and regulatory oversight of the digital economy are growing apace. This essay argues that regulatory heterogeneity can deter digital trade without discrimination. Domestic policies that are not discriminatory can still result in fragmentation of the global digital economy, if sufficiently heterogeneous. We find that rules at the World Trade Organization (WTO) and in digital trade agreements offer important directions but insufficiently mitigate heterogeneity. We suggest that heterogeneity should be addressed through the progressive expansion of international trade law. We emphasize the importance of encouraging regulatory coherence and pre-empting the formation of digital blocks.