Despite Huge Growth in Global Digital Trade in Recent Years, Some Countries Seek to Slow Adoption, Reports USITC

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Contact: Peg O'Laughlin, 202-205-1819
Despite Huge Growth in Global Digital Trade in Recent Years, Some Countries Seek to Slow Adoption, Reports USITC

Digital technologies are transforming business and international trade, reports the U.S. International Trade Commission (USITC) in its publication Global Digital Trade I: Market Opportunities and Key Foreign Trade Restrictions.

Expansion of the Internet’s network infrastructure has enabled the proliferation of devices, driving up demand for cloud services and data analytics resources, according to the report. These products and services are used by many companies and consumers.  However, despite the huge growth in global digital trade in recent years, some countries have imposed measures that slow or halt the domestic adoption of digital technologies in both digital and traditional industry sectors.

The USITC, an independent, nonpartisan, factfinding federal agency, conducted the investigation at the request of the U.S. Trade Representative.

As requested, the USITC report describes recent developments in global trade in business-to-business (B2B) and business-to-consumer (B2C) digital products and services. The report provides information on the market for digital products and services in the United States and key foreign markets, including Brazil, China, the EU, India, Indonesia, and Russia. The report also provides information on global adoption of digital technologies and the importance of data flows. Finally, the report also describes regulatory and policy measures in key foreign markets that may impede digital trade. Developments highlighted in the report include:

  • An estimated 49 percent of the global population has a mobile broadband subscription, outpacing fixed broadband growth in the last five years.
  • U.S. spending on public cloud services outpaced the rest of the world combined, with nearly $63 billion in spending, significantly larger than the EU ($19 billion), which was the next largest market.
  • Global digital content (video games, video, music, and e-publishing) revenue grew to nearly $90 billion in 2016, with video games making up nearly 55 percent of the total.
  • Global e-commerce grew to over $ 27.7 trillion in 2016. B2B e-commerce makes up more than 85 percent of the total. China ($767 million) and the United States ($595 million) are the top B2C e-commerce markets.
  • Firms in many different industries are adopting digital technologies such as Internet-connected sensors, unmanned aerial vehicles, and advanced data analytics to collect and analyze massive amounts of data to improve their business processes.
  • U.S. industry representatives report that many types of regulatory and policy measures potentially impede digital trade, including measures targeting data protection and privacy, data localization, cybersecurity, inadequate intellectual property rights enforcement, censorship, and market access and investment. Overall, the most cited policy measure impeding digital trade was data localization, while content industry representatives reported that ineffective enforcement of intellectual property protections affected them the most.

Global Digital Trade 1: Market Opportunities and Key Foreign Trade Restrictions (Investigation No. 332-561, USITC publication 4716, August 2017) is available on the USITC’s Internet site at https://www.usitc.gov/publications/332/pub4716.pdf.

USITC general factfinding investigations cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

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