Internet Regimes and WTO E-Commerce Negotiations. Congressional Research Service. Rachel F. Fefer. January 28, 2020.
From retail to agriculture or healthcare, digitization has affected all sectors and allowed more industries to engage with customers and partners around the globe. Many U.S. companies thrived in the initial online environment, which lacked clear rules and guidelines, quickly expanding their offerings and entering foreign markets. As the internet has evolved, however, governments have begun to impose national laws and regulations to pursue data protection, data security, privacy, and other policy objectives. The lack of global rules and norms for data and digital trade is leading to differences in these domestic internet regimes. Competing internet regimes and conflicting data governance rules increase trade barriers and limit investment flows and international commerce, restricting the ability of U.S. businesses and consumers to enter and compete in some markets. For example, foreign internet regimes may use national security regulations to block cross-border data flows, disrupting global supply chains and limiting the potential use of and gains from emerging technologies. The creation of national technology standards can also limit market access by foreign firms.
As the digital economy expands, the diversity in digital rules is poised to grow in complexity and create new trade restrictions. The resulting patchwork of technical standards and national systems creates challenges for international trade, and may signal an impending fracturing of the global internet. Without agreement on global norms or common trade rules, some analysts foresee a splitting of the internet into distinct nation-led “dataspheres” and virtual trading blocs.
[PDF format, 29 pages].