Australia’s International Cyber Engagement Strategy (AICES) launched by Foreign Affairs Minister, Julie Bishop, is reforming the way in which we conduct our online advertising. The AICES is far from complete fruition, however, the impacts of its implementation will inevitably affect Digital Trade. In this article, I aim to explore the possible outcomes and complications of Asia-Pacific and EU digital trade borne from the AICES. I will also briefly discuss the effects of Amazon’s entry into Australia.
According to the Strategy, 2017 was a very successful year for international trade. The article states that, “for the first time, in 2017 more than 50 per cent of global internet users were located in the Indo-Pacific.” Additionally, the article purports that by effecting the AICES, Australia will be “successfully harnessing the opportunity promises economic growth for countries in the region as well as new market opportunities for Australian businesses.” These remarks provide an insight on the true economic influence of digital trade. However, “successfully harnessing” this economic opportunity may have disproportionate positive or negative effects.
It is great to see the Government acknowledging that the line between traditional goods and digital goods is blurring. The internet makes it easier for consumers and businesses to trade goods, services and information around the world. For digital advertisers, this is old news. However, the Government’s new-found appreciation for this fact demonstrates the ever-growing significance of the digital economy.
The digital world is marginally regulated and at present is unable to prevent wholly unregulated trading platforms such as the deep web; where traded goods are not necessarily healthy nor moral. Absence of regulations create prosperous environments for skimmers. Implementing an improved regulatory system protects internet users by ensuring the amoral areas of the internet are distanced. One should take solace in knowing their Government takes steps towards customer protection.
Now, let’s talk about the pros and cons of International Digital Trade Regulations.
Booming Global Digital Economy
The AICES states that “Austrade will also create a practical guide for Australian companies exporting in the digital economy,” which may render complications for external trade or provide further ease in transactions.
A potential pitfall includes an increase in Governmental influence. The Australian Government will most probably corroborate with businesses from the private sector who have a preexisting, substantial influence in the digital market. These regulations will most likely improve trading conditions for organisations with established names and strong business ecosystems, whilst smaller and less influential companies may be excluded from such corroboration.
Conversely, these regulations will help business owners to make calculated decisions that will conform with legal requirements. History loves repeating itself in slightly different variations — when the Soviet Union collapsed, the economy “collapsed”… well, not really, the wave of the “new Russians” emerged, those who knew how to profit from an economic disaster (nowadays called businesspeople), and while some businesses flourished in Russia, other individuals starved. This is the outcome of an unregulated economy. I believe that having the proposed regulations from the AICES will exclude small businesses who are unable to scale up, and help larger businesses on the opposite side of the financial scale.
What does the involvement of the Government mean for advertisers? It will most likely contribute to times of economic hardship. In my modest opinion, Google is a beacon of advertising and they have made sure that websites have undergone a check list of requirements before they go live. I am hoping that the future system in place will not oblige a waiting period for ad approval from Google, the Government, and an additional third party.
International trade regulations may also slow the progress. For example, in New Zealand, gambling advertisements are illegal, however, in Australia it is advertised in most mediums. Ensuring Australian gambling ads are not running in NZ is a 1-minute task that anyone can accomplish. However, other instances of consumer targeting are more serious. In Asia, using Face recognition for advertising is absolutely legal, and it is fun (I wish we could do it here, read more about it). Australia may not be entirely open to this idea as customer privacy comes first.
It will be quite difficult to provide consumer protection rights on a global scale as per regulations below:
- “Countries should provide the same protections for online consumers as they do for any other consumer”
- “Countries should adopt or maintain a legal framework to protect the personal information of electronic commerce users from unauthorised disclosure”
Trading within UN
“Countries should adopt or maintain legal frameworks consistent with the principles of the UN Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce (1996) and the UN Convention on the Use of Electronic Communications in International Contracts (2005)”. In other words, Modal law on Electronic Commerce allows to remove legal obstacles and increases legal predictability for electronic commerce and UN Convention on the Use of Electronic Communications in International Contracts is allowing to use the internet for trade.
Ok, fine, so we do the trade within UN and emit some of the laws, no problem. This makes thing very easy and smooth.
What about England? UK is the strongest digital tech player in Europe. As per Newstatesman article the UK digital sector “is worth more than £160bn to the country – and investment reached a height of £6.8bn in 2016, 50 per cent more than any other European country.” If UK will not comply with the EU’s single market regulations, this will pose problems for UK based companies. UK consumer and user protection regulations must mirror those of the EU for trade to remain effective, otherwise the UK may seclude itself in a closed Digital Economy. Will Australia trade with the UK anyway? Needless to say, it will make trading immensely harder or even impossible.
Regulations & Amazon
What an inconvenient coincidence that the AICES came at the same time as Amazon. I believe that Australian politics will aim to protect small businesses, and quite possibly make it very hard for Amazon to take over the market.
Once again, time will show.