Australia is in active discussions with the US to sign a regional digital trade agreement in an effort to re-engage America in the Indo-Pacific region and boost the local technology sector.
Trade Minister Dan Tehan has just returned from a trip to the United States, Japan, South Korea, Singapore and Vietnam, where the prospects of a digital trade agreement was a central theme.
Such an agreement would be modelled on Australia’s digital economy agreement with Singapore, which came into effect late last year, and would cover issues like standardised digital payment rules, data localisation and data privacy with an aim of breaking down barriers to digital trade.
Addressing the American Chamber of Commerce in Australia virtually on Wednesday morning, Mr Tehan said such an agreement was backed by Japan, South Korea and Vietnam as a positive way to bring the US back into the region.
“The overwhelming feeling for all four countries I visited in the immediate region was that they are looking for US engagement and digital trade in a regional form, and that probably provides the best avenue for the US to re-engage again in a serious way in our region,” Mr Tehan said.
“The clear message is the digital regional trade agreement would be a very good way to do this. We have the gold standard of digital trade agreements with Singapore and that provides a building block on which we can do something.
Mr Tehan also recently met with US Trade Representative Katherine Tai to discuss the potential agreement, with a focus on how it could boost jobs and SMEs in each country.
“We had very good discussions about the digital regional trade agreement. Katherine Tai was very keen to get a sense about how it would help and support especially SMEs in the US and to help and support workers,” he said.
“Obviously the US is looking to a worker-centric trade policy and really want to make sure everything they do in the trade policy area will generate jobs. I was able to reassure her that one of the most fundamental things for us and what we do with trade policy is creating jobs and promoting jobs which will secure peoples’ futures.”
Australia’s ambassador to the United States Arthur Sinodinos told InnovationAus in June that a digital economy trade agreement was being pursued, with a key aim to set agreed rules and standards for trade in the digital economy.
“That’s something that’s been getting a lot of discussion here in Washington among the people we work with,” Mr Sinodinos told InnovationAus in June.
“In some ways we think this can be low-hanging fruit, because we have prototype agreements like the Australia-Singapore agreement. If payment systems for example can be standardised and recognised across borders, that’s a big help – particularly for the smaller companies.”
While in the US, Mr Tehan also met with the American Federation of Labor and Congress of Industrial Organisations (AFL-CIO), and said the union body “won’t stand in the way” of a digital trade pact.
Initial signatories to the digital trade agreement would likely include Australia, Singapore, Japan, South Korea, Canada, New Zealand, Chile and the New Zealand, the trade minister said.
“They’d be very welcoming of US engagement with a foothold like this into the Indo-Pacific,” Mr Tehan said.
“There’s a real willingness and keenness from our counterparts in the region to engage in a digital regional trade agreement. If we could get quick movement you would see countries lining up to join.”
While much of the region is on board, efforts will need to continue to convince the US to sign on, particularly following the controversial negotiations for the Trans-Pacific Partnership (TPP), Mr Tehan said.
“If advocacy is needed anywhere, we have to make sure we keep reiterating to the Biden Administration the importance of their engagement in the Indo-Pacific. Katherine is very keen to make sure the first foray [into the Indo-Pacific] is a successful one,” he said.
“With what happened with the TPP and the politicisation of it, she’s very keen to make sure that the first engagement is one where it’s successful and they are able to sell a clear message of jobs in the US and positive US engagement in the Indo-Pacific.”
Mr Tehan pointed to the importation of Ford Mustangs from the US to Australia as an example of where the digital trade pact could help to overcome barriers and assist SMEs.
“As a result of a digital trade agreement where you can formalise credit certifications, invoicing and enable consumer rights to be part of the agreements you’re putting in place, that will enable Australians who want to buy Ford Mustangs to get after-service partners from SMEs in the US and generate jobs,” he said.
During the trade visit, Mr Tehan also discussed the local space and critical minerals sectors.
“There’s extraordinary progress when it comes to space and industries in the US and Australia, and the collaboration taking place there,” he said.
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