Explained: Why China Eager to Join Digital Economy Partnership Agreement

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China is home to 11 out of the 20 largest digital giants in the world. Digital Economy Partnership Agreement membership will immensely help China gain better access to these economies.

New Delhi (ABC Live India): Chinese President Xi Jinping while addressing the first session of the 16th Group of 20 (G20) Leaders’ Summit in Italy expressed an intention to join the Digital Economy Partnership Agreement (DEPA), the Chinese membership in this group will open a series of opportunities for China in the digital economy sector.

It is pertinent to mention here that in May 2020, China has already moved an application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Dr. Rahul Nath Chaudhary, a Research Fellow at the Indian Council of World Affairs, New Delhi wrote in his article that, “the current signatories undoubtedly practice an open and free digital economy but are not among the major global players. As against them, China is the second-largest digital economy in the world. China’s digital economy reached 35.8 trillion yuan ($5.5 trillion) in 2019, accounting for 36.2 percent of the GDP, with a growth rate three times higher than that of the traditional manufacturing economy. China is home to 11 out of the 20 largest digital giants in the world. DEPA membership will immensely help China gain better access to these economies. It will penetrate further to the niche areas of the digital economy. Through this pact, China can come even closer to these economies while deepening its dominance. But for this, China needs to bring a series of amendments in its domestic as well as external policy to comply with DEPA.”

Know About Digital Economy Partnership Agreement

The Digital Economy Partnership Agreement (DEPA) between Singapore, Chile and New Zealand is the first DEA concluded by Singapore. The DEPA is a first of its kind agreement that establishes new approaches and collaborations in digital trade issues, promotes interoperability between different regimes and addresses the new issues brought about by digitalisation.

DIGITAL ECONOMY PARTNERSHIP AGREEMENT

The Parties to this Agreement, resolving to:  ACKNOWLEDGE the importance of the digital economy and that ongoing economic success depends on their combined ability to harness technological advances to improve existing businesses, create new products and markets and enhance daily life; 

RECOGNISE the global value of the Internet and its open architecture as an enabler of the digital economy and catalyst for global innovation;

RECOGNISE  the  role  of  standards,  in  particular  open  standards,  in  facilitating interoperability  between  digital  systems  and  enhancing  value-added  products  and services;

RECALL the Sustainable Development Goals in the United Nations 2030 Agenda for Sustainable Development, particularly Goal 8 and Goal 9; 

ACKNOWLEDGE  the  importance  of  the  digital  economy  in  promoting  inclusive economic growth; 

RECOGNISE the need to harness the benefits of advanced technologies for all; 

ACKNOWLEDGE  the  need  to  identify  the  growing  range  of  barriers  that  relate  to trade in the digital economy and the need to update global rules in response; 

ACKNOWLEDGE that the digital economy is evolving and therefore this Agreement and its rules and cooperation must also continue to evolve; 

CONSIDER  that  effective  domestic  coordination  of  digital  economy  policies  can further contribute to achieve sustainable economic growth; 

RECOGNISE  their  interdependence  on  matters  relating  to  the  digital  economy  and, as  leading  online  economies,  their  shared  interest  in  protecting  critical  infrastructure and  ensuring  a  safe  and  reliable  Internet  that  supports  innovation  and  economic  and social development; 

AFFIRM  a  commitment  to  partnership  cooperation  on  matters  relating  to  the  digital economy;

RECOGNISE their inherent right to regulate and resolve to preserve the flexibility of the  Parties  to  set  legislative  and  regulatory  priorities,  safeguard  public  welfare,  and protect legitimate public policy objectives; and

REAFFIRM  the  importance  of  promoting  corporate  social  responsibility, cultural identity  and  diversity,  environmental  protection  and  conservation,  gender  equality,

MODULE 1

INITIAL PROVISIONS AND GENERAL DEFINITIONS   

Article 1.1: Scope

1. This Agreement shall apply to measures adopted or maintained by a Party that affect trade in the digital economy.

2. This Agreement shall not apply:

(a)  to a service supplied in the exercise of governmental authority;

(b)  except for Article 2.7 (Electronic Payments), to financial services;

(c)  except for Article 8.3 (Government Procurement), to government procurement; or

(d)  except for Article 9.5 (Open Government Data), to information held or processed by  or  on  behalf  of  a  Party,  or  measures  related  to  that  information,  including measures related to its collection. 

Article 1.2: Relation to Other Agreements 

1. Recognising  the  Parties’  intention  for  this  Agreement  to  coexist  with  their  existing international agreements, each Party affirms: 

(a)  in  relation  to  existing  international  agreements  to  which  all  Parties  are  party, including the WTO Agreement, its existing rights and obligations with respect to the other Parties; and 

(b)  in relation to existing international agreements to which that Party and at least one other Party are party, its existing rights and obligations with respect to that other

Party or Parties, as the case may be. 

2. If a Party considers that a provision of this Agreement is inconsistent with a provision of another agreement to which it and at least one other Party are party, on request, the relevant Parties  to  the  other  agreement  shall  consult  with  a  view  to  reaching  a  mutually  satisfactory solution.    This  paragraph  is  without  prejudice  to  a  Party’s  rights  and  obligations  under

Module 14 (Dispute Settlement).1                                                                                                                                                                                                                   For the purposes of the application of this Agreement, the Parties agree that the fact that an agreement provides more favourable treatment of goods, services, investments or persons than that provided for under this Agreement does not mean that there is an inconsistency within the meaning of paragraph  

Article 1.3: General Definitions 

For the purposes of this Agreement, unless otherwise provided in this Agreement: 

 Agreement means the Digital Economy Partnership Agreement;

 APEC means Asia-Pacific Economic Cooperation; customs duty includes any duty or charge of any kind imposed on or in connection with the importation  of  a  good,  and  any  surtax  or  surcharge  imposed  in  connection  with  such importation, but does not include any:

(a)  charge  equivalent  to  an  internal  tax  imposed  consistently  with  Article  III:2  of GATT 1994;

 (b)  fee or other charge in connection with the importation commensurate with the cost of services rendered; or

(c)  antidumping or countervailing duty; days means calendar days; enterprise means any entity constituted or organised under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association or similar organisation; existing means in effect on the date of entry into force of this Agreement; financial  services  is  as  defined  in  subparagraph  5(a)  of  the  Annex  on  Financial  Services  in

GATS; GATS means the General Agreement on Trade in Services, set out in Annex 1B to the WTO Agreement; GATT  1994  means  the  General Agreement on Tariffs and Trade 1994,  set  out  in  Annex  1A to the WTO Agreement; goods means any merchandise, product, article or material; Joint Committee means the joint committee established under Module 12 (Joint Committee and Contact Points); measure includes any law, regulation, procedure, requirement or practice;

Party means any State or separate customs territory for which this Agreement is in force;  person means a natural person or an enterprise; person of a Party means a national or an enterprise of a Party; personal information means any information, including data, about an identified or identifiable natural person;

 SME means a small and medium-sized enterprise, including a micro-sized enterprise;

 WTO means the World Trade Organization; and WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on April 15, 1994.

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