New Industrial Revolution: Upgrading Trade and Investment Frameworks for Digitalization

This policy brief was produced by the T20 Task Force on Trade, Investment and Tax Cooperation under the G20 Presidency of Argentina in 2018. The task force was set up to examine how to encourage a rules-based multilateral trade system that broadens the benefits of economic integration while providing the tools to protect those that are hurt by globalisation. The policy brief provides analysis and specific policy recommendations for G20 leaders and other government officials in the G20 process: • Multilateral progress on the governance of the digital economy and trade remains sluggish, with possible serious consequences for the global economy and development. Processes currently in course, such as those at WTO, need strengthening. Such attention also needs to effectively address the risks of a widening digital divide. Plurilateral and regional approaches raise the potential for innovation in this domain, but such approaches must be understood systemically in relation to their sustainable development impacts. • New gaps in trade governance have been exposed as the digital economy continues to grow and new technologies emerge and are rapidly deployed. Policymaking in this area requires more and effective international interagency coordination and greater involvement of country capitals. • Misallocation of taxable profits is exacerbated by lack of adequate frameworks that address the digitalization of economy and trade, and there is lack of consensus about political and technical solutions.