3 - Barriers to Digital Services Trade

Summary

Having defined ‘digital services’ for the purpose of the book, this chapter identifies different barriers to digital services trade. First, the chapter explains how general barriers to trade in services also impact trade in digital services. The most prominent example of such a barrier is regulatory divergence. Second, the chapter elaborates on restrictions on cross-border data flows and the high impact they have on any service that is supplied electronically. Data is omnipresent in the digital economy and restricting data flows has a far-reaching impact on both digital and offline trade. Data localization requirements are further discussed as the quintessential example of barriers to data flows. Third, the chapter elaborates on web filtering and content control, which effectively prevent certain service providers from reaching consumers in certain markets. Fourth, a brief overview is provided of other barriers to digital services trade, including limited access to infrastructure, bans on the cross-border supply of services through electronic means, digital taxes and restrictions on intellectual property rights.