Gareth Tan and Chuin Wei Yap Transcript: June 23, 2025
Kevin Johnson, NPF (00:00:01):
This conversation, we titled the Age of Data for a couple of reasons, some of which you have referred to in your Q&A with our previous speakers, but now I think we’re going to dive deeper into that subject. In business and journalism data has long been narrowly viewed as a tool simply to inform business’s bottom line or is evidence to support your own reporting. It still is that, but it’s much, much more. It is now a treasured commodity that is amassed, analyzed, traded, and it’s also become an international measure of political power. While preparing for this session, I was actually on a phone call with Chuin Wei describing how I was struck by the recent report, I think it was in March, an infographic that they published with the visual capitalists, the Hinrich Foundation and the visual capitalist, which concluded that more data will be generated in the next three years than in all of human history.
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Try to get your head around that and largely driven by AI’s insatiable appetite for information. So we’ve talked a little bit about AI and the risks associated with that, but I think Chuin Wei and Gareth Tan will take us along a deeper path to examine this age of data. Chuin Wei is back with us and we talked about how he has been directing the Hinrich Foundation’s research on trade. Along with Chuin Wei is Gareth Tan, who is a senior associate director at APCOs Singapore office and leads its technology practice while also playing a coordinating role on several regional technology accounts. Gareth brings nearly a decade of experience with topics such as data governance, digital trade, and emergent technology to advise clients and plan campaigns. Gareth is regional lead for the Digital Prosperity for Asia Coalition, an alliance of digital small businesses seeking ways to navigate the Asia Pacific Region’s changing policy landscape. That’s a mouthful. So he gets to start and we’ll go probably 15 minutes aside and then we’ll open for questions after that. So with that, I’ll turn it over to Gareth Tan. Welcome.
Gareth Tan, APCO (00:02:59):
Thanks so much, Kevin. Yeah, this is working right? Great. Thank you guys so much for being here. Really appreciate it. I know that it’s the end of a long, long day for you guys and I’m standing between and I I standing between you and dinner, so we’ll try and keep it as brick brisk as possible. As Kevin’s mentioned, I represent ABCO Worldwide, which is a global affairs and public policy consultancy, but I’m also representing the Digital Prosperity for Asia Coalition as its regional lead for the Asia Pacific. And the Digital Prosperity for Asia Coalition is actually a coalition of small businesses from across the region, which and the coalition aims to basically support the needs of a lot of these businesses. With regards to digital regulation, the idea is that digital regulation has become more complex in the region over the past decade in particular, and a lot of them are struggling a lot more, especially small companies.
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So we aim to provide basically a stopgap solution for them until they achieve a scale large enough that they can afford their own government affairs departments basically. So we’re kind of a government affairs department for free. So we have about more than 120 members from across 10 countries and we’ve engaged with quite a lot of activities with a number of multilateral organizations including apec, the World Trade Organization, A DB and things like that. So we aim to basically connect small businesses with policy makers and vice versa so that they have a bit of a competitive edge in engaging with digital regulation. So moving on to the topic at hand today, I’m here to talk to you a bit about some of the trends on digital trade. There are three topics I’m going to be talking through today. First of all, the World Trade Organization and the e-commerce moratorium, which is due to expire this coming year.
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Next Ian and the Digital Economy Framework Agreement, and then other trends. So moving on very quickly to our first topic, the World Trade Organization, the E-commerce moratorium, and I apologize if I go very, very fast. Please feel free to take pictures of the slides and if any of you need the slides, eventually they will come. This is going to end up being a lot of text. So how I configured it is that it’s going to start, each slide is going to start out with less texts and start having more text so that people don’t get too confused. So first of all, I assume that everybody kind of knows a fair bit about what the WT O is. So WTO was created in 1994 and importantly, it actually was created in a period that preceded the explosive growth of the internet. So the WTO was created without knowledge, without strong knowledge of what the internet was going to become, how key it was going to be to the digital economies of both developed and developing countries rules.
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Therefore, at the WTO, like the gats, the general agreement on trading services do touch on data, but it’s unclear sometimes as to how they apply to new technologies like cloud. The World Trade Organization has nevertheless played a very key role in enabling the growth of the tech industry globally, and it has encouraged the adoption of technology, but mainly by reducing tariffs in IT products that form the kind of hardware layer underlying the digital economy as it exists today. So things like the information technology agreement, which is a PLU lateral agreement. And just to step, take a step back, terminology wise, bilateral is between two countries. Multilateral is within every country that is in a particular grouping. So multilateral within WTO will be all WTO members, plural. Lateral is some WTO members. So not every WTO member signs on to the information technology agreement, but the point is that it includes quite a number of WTO members and has reduced import prices of electronic goods between them that have been necessary for things like the data center industry, for example, by up to 66% between 1996 and 2016, the ITA also facilitated the ITA facilitated the growth of the digital economy.
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But again, there’s very few things in the WTO at a multilateral level that is affecting all WTO members that addresses the digital, that directly addresses digital trait and that is why the e-commerce moratorium is important because it is functionally the only piece of the WTO that affects all components of digital trade.
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The e-commerce moratorium, which is more in long form referred to as the moratorium on customs duties on electronic transmissions was introduced in 1998 and it stops WTO members from imposing customs duties or tariffs on electronic transmissions. So the moratorium is not a permanent agreement. It has to be renewed every single ministerial conference of the WTO, and it has been since 1998 and it was most recently renewed a year ago in 2024, and it’s up for renewal again in 2026 next year. Now going back, taking a step back, you’ve seen the name of the moratorium, it’s a moratorium on custom duties on electronic transmissions. So what is an electronic transmission? And that is really the question that is at the core of the moratorium because if anybody has covered trade particularly extensively, that trade is basically the exercise of a hundred different lawyers kind of arguing each other down until they kind agree on consensus on one particular set of language.
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So if a particular piece of language is agreed upon, it is because a hundred different lawyers have more or less agreed upon it. So the vagueness of the term electronic transmission is intentional. It is imprecise because like I said, it was created in an era before people knew what the digital economy was going to be and therefore they just said, yeah, whatever happens, this is going to cover it. Basically because of that, it covers everything. It covers data, it covers digitally transmitted goods and services. So everything from movie streamed online to video games that exist entirely in digital form or data moving from a data center or something like that, that is all covered by the moratorium. Now, for example, if it’s a video game it needs in a cartridge or something like that and it has to go across borders, then it gets taxed, it gets tariffed, but in this particular way it is a slightly different configuration.
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So why the first this year as digital economy has grown as part of the approximate GDP of every single country developing countries in particular have become quite territorial about data which they view as a key strategic resource and with good reason to a certain extent, right? The idea is that I’m sure many of you have heard this formulation data is oil, right? Basically so many developing countries, well some developing countries including India, Indonesia and South Africa have called for the moratorium to expire because they feel that it would allow them to more directly access the economic value of the data that their countries are producing. The challenge here is I would say that like I said, there’s some degree of truth to that, but it is a limited degree of truth because data is only valuable if you can use it. If you have data on its own, it’s actually a diminishing resource because especially with ai, AI is demonstrating very clearly and I’m happy to answer any questions about AI after this as well by the way.
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But AI is demonstrating that if you have data that was produced today, very useful. If you have data that was produced a month ago, still useful, not that useful a year ago, significantly less useful two years ago, not useful because it doesn’t lead to a model that say that is producing UpToDate kind of observations and everything like that. The pattern recognition is not the correct kind of pattern recognition that you are aiming for. So to maybe illustrate the trajectory of the conversation on the moratorium, I want to kind of look at a bit of language, and this is going to seem really, really granular, but going back to the point of the hundred different lawyers arguing against each other in 2019 when this was renewed, the language was basically that members agreed to maintain the current practice of not imposing customs duties, and that’s very neutral language.
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Next in 2022, it became the moratorium will expire on that date unless ministers of the general counsel take the decision to extend, and the recent renewal basically just says it will expire. So more and more over the past five plus years, it has come to a point where we’re relatively sure that there’s more momentum towards allowing the Morton to expire. And that is a problem because like I mentioned just now, I mean as I mentioned later on, the moratorium is the core of the digital economy, of the modern digital economy as it exists today globally. And the challenge here also is that because WTO operates on a consensus basis for multilateral decisions like this, one member can technically just refuse to have it renewed and then the entire thing collapses basically. So that is the danger that we’re facing. So why is the moratorium important?
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Like I said, the moratorium is the only multilateral agreement directly addressing digital trade at the WTO. It forms the basis of modern digital trade and electronic commerce and provide certainty to businesses both large and small, that digital services can be provided or accessed absent of additional costs or administrative burdens. So maybe a question that some of you might ask is why not put a tariff on digital services? Why can’t we put a tariff on digital services? The basic principle of it is that goods, if I have a solid piece of something and I export it, it’s very easily traceable because it can’t disappear into the either or something like that. I mean, it’s relatively easily traceable. I’m not going to say that goods cannot be trace or something, but all digital goods are services because there is nothing solid to tag into it’s data. So how do you track data?
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If you want to track a bit of data, you have to have another bit of data to track it for extent, then you’re basically doubling the amount of data that you are creating in order to allow electronic commerce to even exist. So because all digital goods are services and services are infamously difficult to track by implementing some kind of tariff on services, you’re creating enormous due diligence for small businesses in particular. Maybe large businesses will have the ability to overcome this because they have the resources, they have an army of lawyers, they have an army of due diligence people, but small businesses in particular have a real challenge kind of with this. And so the e-commerce moratorium has stopped all of these tariffs from being implemented. It has stopped countries from even thinking about implementing tariffs because it is kind of like, yeah, WTO says it cannot.
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So cannot, you know what I mean? So in the wake of the past few years, we are already seeing slightly worrying signs. In Indonesia, for example, the Ministry of Finance has implemented a regulation PMK one 90, which establishes procedural rules for import declarations on intangible goods. And again, with any regulation, the words are very, very important. Intangible goods basically means everything that is not a physical good in the us. For example, most recently the president in response to show business not doing so well in California or something that is threatened to impose a hundred percent tariff on movies. And since movies are primarily consumed nowadays in digital form, that would require a kind of tariff on services. So we are already seeing worrying signs all over the world. Additionally, custom duties, and like I said just now, custom duties on digital trade would add a lot of duplicative kind of regulations as well as significant administrative burdens. Again, especially for small businesses.
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And really, I mean just a short aside, this is why the DPA A is particularly kind of paying attention to the e-commerce moratorium because we view it as something that small businesses know very little about, but which affects them very significantly, and which a lot of people outside of the trade space think is just, yeah, it’s a fixture, it’s not going to go away, but one day it will go away potentially. And then what’s going to happen after that basically? So what are countries in this region doing about it? Countries like Singapore, Japan, and Australia are actually playing a very significant role in advancing discussions on digital trade, especially regarding the moratorium. A key component of this work is the joint statement initiative on e-commerce at the World Trade Organization. And a joint statement initiative is basically like a working group of interested countries at the World Trade Organization that come together to talk about a particular topic. It could be, it could be agriculture in this situation.
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So the joint statement initiative on e-commerce involves 91 WTO members accounting for 90% of global trade conducting discussions about this topic last year in July, the JSI concluded negotiations on a agreement on e-commerce or potentially an agreement on e-commerce that was agreed upon by the majority of JSI participants. And the stabilized text actually includes an article on customs duties that proposes a permanent moratorium with a five year review window. So this would basically kind of remove the anxiety that every two years it goes away, right? The JSI co-conveners have since moved on to discussions about implementation and adoption, but I mean from a lot of the conversations that I’ve been privy to, again, implementation of this at a multilateral level would require the acquiescence of every WTO member, and there are many WTO members like I mentioned, India, Indonesia, South Africa, who are quite opposed to the moratorium.
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So that is a challenge that we’re facing with the moratorium. Moving on very quickly to ASEAN, we ASEAN, as everybody knows, is the association of Southeast Asian nations. It consists of the 10 ASEAN countries soon to be 11 potentially, and we are potentially on the verge of unlocking some very interesting economic potential here with the potential passage of the digital economy framework agreement. The DEFA in ASEAN and DEFA would be the world’s first binding regional digital economy agreement that aims to unlock ASEANs economic potential by clearing barriers to digital trade. So what is going to be covered by DEFA? Short answer, nobody knows because the negotiation text has not been made available to many people, but DEFA is currently assumed and has been verified by our internal discussions with some of the secretariat members as well to be shaped on some of the chapters that RCN member states have already signed onto in other deals.
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So for example, let’s say Singapore or Vietnam are part of the have a seated to the comprehensive and progressive transpacific partnership, the CPTPP and the RCP for example. And so a lot of chapters on e-commerce from those agreements are being used as the basis for what people assume that defi is going to cover as well. So expected areas of focus include things like e-invoicing across border data flow, source code and things like that. But areas of contention, which we’ve heard that certain AAN member states are still pushing back on quite significantly are non-discriminatory treatment for businesses, which in this trade agreement context would mean that each country is required to treat any incoming country, any business from an AAN country as equal to their own. So they’re not allowed to discriminate against them or cross-border data flows, basically not allowing for data residency as a requirement to do business in your country.
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For example, one slightly controversial element as well is going back to the moratorium, a proposal to implement a ASEAN level moratorium on custom duties on electronic transmissions. Again, because there is a consciousness that the WTOs moratorium may expire, in which case then there may be a need for some degree of regional safeguarding of that capability basically. And I mean, just an aside here, this speaks I think to the potential regulatory fragmentation that we see with the continued evolution of the WTO into its current state where different regions of the world may come together to find their own alternatives to some of the mechanisms that they used to be able to depend on the WTO for. And that’s something that I think we’re watching very closely. So why should you be paying attention to defund? Defund has the potential to strengthen the value proposition of RC as an economic block and give it greater leverage in its negotiations with some of its larger trading partners.
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The fact of the matter is that if there’s one thing that the Liberation Day tariffs have demonstrated it is that small countries do need to find some recourse to being pushed around by larger countries. And in that context, DEFA potentially allows ASEAN to start functioning or operating as a more unified digital economy, allows it to have greater heft in negotiating with some of its larger trading partners. Additionally, ASEAN ministers, the relevant ministers in charge of this negotiation have publicly declared as well that negotiations will conclude conclusively by 2025, indicating that there’s a lot of commitment there. And that’s the important factor actually, because there’s a lot of pressure on ASEAN to achieve some result because if a minister says something and ASEAN as a forum there is, there’s a strong degree of pressure on them to actually follow through on that. Otherwise, the country kind of looks bad, basically.
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I mean, yeah, it’s a bit of a face thing and because DEFA will potentially be binding on signatories, ASEAN consensus based model would make coming to an agreement on some of the more touchy issues in DEFA, a bit more challenging, which could lead to compromises that a lot of observers are concerned could reduce the impact of the final agreement. So one of the most recent developments with DEFA as of June, 2025, DEFA is understood to still not have hit 50% completion raising concerns that this will be a sprint to the finish line, but there’s still very strong commitment in our conversations with the secretariat as well as some of the main governments behind it that they will finish by the end of the year. But recent indications suggest that they are now going to focus on achieving consensus on substantial tax. So what substantial tax means in this context is basically just they’ll put together more or less the big picture of what they want to achieve with DEFA and then a lot of the implementation and a lot of the details are going to come next year.
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So currently the chair is Malaysia, they’re already trying to push it through as much as possible, and then Philippines next year’s chair will carry on a lot of the more detailed discussions. So there’s also discussions about differentiated approaches that AAN could take. A phased approach is probably going to be inevitable. A phased approach is one where different countries, which are different levels of development in AAN, may adopt different parts of the agreement at different times. Alongside that, there’s also the ASEAN minus X approach, which is a less desirable approach where the entire agreement may just become like a PLU lateral where it’s accepted by some countries and not other countries. So on the last point, apologies for going over time wanted, I just wanted to talk about some of the trends that we’re seeing with regards to some of the digital regulation that has relevance actually to AI regulation.
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In particular what is happening with the so-called Brussels effect. Some of you may have heard of this term. Basically it refers to the eus ability to rely on its gigantic market, on its very large advanced market to compel international regulations to align or comply with EU standards. Things like the general data protection regulation that some of you may have heard of being copy pasted by a lot of countries and adapted slightly because they want to achieve some degree of parity with what the EU has to offer. This is something that we have seen to a certain extent with other regulations as well, like most recently the EU AI Act.
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And that is something that we’re seeing in this region too. A few different governments have been looking at the EU AI Act as a model to kind of create AI regulations based off of, but recent developments in the eu, for example, are calling this into question. For example, there was a publication of a report called the Draggy report on EU competitiveness by former Italian Prime Minister and ECB chair Mario Draghi that has indicated that even internally there is doubt about whether or not the eus very robust and very muscular stance on regulation is something that they want to carry forward internally as well. The repercussions on this region are that a lot of different economies in Asia are now considering whether or not EU models are really the best models to base their own regulatory things on. And a lot of the consideration for that is how enforceable EU models are in this region.
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Many of you who have covered some Southeast Asian countries may have noticed that while in Thailand for example, while they implemented personal data protection regulation that was very in line with the EU GDPR, it took them about four years to actually kind of adhere to that. And there were two subsequent delays of more than a year because many businesses indicated that they were not able to comply with the requirements there. So there’s a lot more conversations about this happening. And as a shameless plug for the DPA, we are also working on some reports to indicate, I mean, to find out a bit more about the economic implications of importing EU model regulations. So with that, I’ve come to the end of my presentation. Thank you guys for listening.
Chuin Wei Yap, Hinrich Foundation (00:26:17):
Thank you, Gareth. Gareth sort of started at a pretty high level, kind of like chapter, I don’t know, seven of the book. And I guess it’s an opportunity now for me to sort of wind it back a little bit and go back to why we are talking about all this. And one of the reasons why, and you’ve heard this earlier in the earlier sessions, PAG mentioned it, Steve mentioned it, which is all of this is about globalization and the idea that we are on the cusp of globalization falling apart, and both of them sort of in their own way question that notion. And when it comes to services, when it comes to data, when it comes to e-commerce, when it comes to ai, this is absolutely true. Globalization, the idea of that globalization is dead is a fallacy. And you have to understand this because in some areas that are critical to the global economy, globalization is alive and kicking and is particularly so in the case of services.
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Why is that important? Because services is a much smaller component of global trade right now. Global trade is in merchandise and goods and stuff. Everybody knows it’s closely flatlining and it’s in danger of being politicized to the point where it might go negative. Even at current projections of this scenario, the projections that the trading services is going to continue to grow and it is growing at about three to four times the pace of merchandise. Now that means that in about five to 10 years, services as a driver of the global economy is going to be the most critical engine of global growth. So this is why we worry about the impediments that are being put in place of services, which is everything that Gareth had just talked about in terms of e-commerce and what’s happening in digital goods, digital services at asean, at the WTO, at various for, because the nature of services is extremely difficult.
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As Gareth said, sometimes to pin down that notion of calculating how much, what is a service and how much value there is in it has always made it a rather more nebulous subject that is really only, as you pointed out in the last 20 years or so, that we got a better idea of what might constitute a service first of all, and how you might derive value out of it. And this is particularly useful for governments because when governments think what do they think about, first and foremost, they think about money, revenue, how am I going to get some money out of this? And in the days when you didn’t know what a service really was and at which point you could tar it, it was a subject that you could set aside. Now what’s changed? All this is the advent of data. Data has made it possible to compartmentalize services down to the degree where you can capture what they call what in economic terms you call economy wide input output.
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So you can trace the point at which an input is put into a process and the value of the output and the amount of data will tell you how much that value is. It helps because it gives you an idea of how you size this thing called value add in economic terms. I mean, what this is really about, when we talk about growth, it’s about growth and value add. So data gives you that ability to do those two things, to put numbers, accurate numbers on those two things. And it also has an additional advantage. It helps you in this day and age. It helps you to identify the origin of the products. The value chains these days, as you all know is very complex, goes all over the world, crosses borders many times before. Good is made, our service is made. And identifying where this thing comes from becomes increasingly important to governments that care about a world that’s being bifurcated and data helps you do that.
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Now, if you’re going to put revenue barriers, revenue hurdles in the provision of services, well, you could do that, but you have to think about, well, how are you going to do that? Gareth mentioned earlier, this threat, I’m going to put a hundred percent tariff on movies that doesn’t seem to have panned out. And one key question, I suppose it doesn’t occur to some people when they make threats like that is, well, at which point in the value change do you want to tax this thing? Are you tax box office revenue? Are you texting syndication? What is it? What in that process that you’re going to put the tariff on? So if you don’t figure out that and you don’t figure out how a service is delivered, it makes the threat. It illustrates the nebulous nature of this product as it is being delivered that you’re trying to tariff. However, the growth of this sector is so enormous that governments around the world are now looking at it and thinking, well, there is no way that we can want to give up the sovereign right to be able to get some revenue out of this. It is a golden goose it it’s waiting to happen next year. A really, really critical juncture is going to happen. The e-commerce moratorium, which has existed since as Gar says since 1998, is pretty much almost certain to be killed because of the way the WTO is structured.
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I’m sorry. Very sad. Well, yes. I mean this is the most important thing that is going to happen if we let it pass at next year’s ministerial conference of trade ministers. When they gather in Cameroon for the WTO ministerial, these ministerials happen once in two years. Every two years they get a little bit closer to killing the moratorium. Next year, it is almost certain that the moratorium will be ended giving governments all over the world a free hand to just as someone proposed a hundred percent tariff on tariffs to do exactly that or worse, find other ways to tariff or tax. Now, what does that mean to you? I mean, you are journalists, but you are consumers too. And the people you cover, it means that you music is going to be tariffed. Your movies, which you probably stream are going to be tariffed, your software is going to be tariffed.
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And more importantly for your economies, wherever you are, a lot of services are SME driven. That means small businesses, a lot of them allow segments of society to come into the economy. People like women, minorities that they never would have a chance before. Now that ability to do so is reduced when you make it more expensive. So when we think about all these issues, it’s highly complex and it opens up a lot of different rabbit holes of exploration. I mean, most of you are like daily journalists, I take it. I mean, except for the wire China. Where’s the wire China? The wire China? Are you guys very focused on, I mean, do you have beats that drill down to levels of where you’re looking at just pure data and just pure you do excellent and the information, of course, where’s the information? Yeah, right. Information is way ahead of this game.
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And I guess that the larger Bloomberg would be another place that can afford it. So what we can afford at the Hinrich Foundation is to take a step back and sort of look at the issue as a narrative, as a visual. Because sometimes when you tell these stories, they deal with highly complex subject matter, and the best way to come into the story is to come into it visually. Do you have to click that? I could. So we did this. Every year we do a deep dive with our partners in Vancouver called Visual Capitalists. And every year we pick a different subject. The first one we did ever was on carbon.
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And the second year I was thinking about it. I thought, well, let’s do one on water. So we did one on carbon, we did one on water, and the third year we were like, well, what are we going to do? I was scratching my head one day and I thought, well, what fire, because I wanted it to be very elemental. I mean, this is something that we do as part of our sustainable trade index, and I always like it to be about one single simple subject racking my brain. Well data because it’s the most current thing and it is the most elemental thing that is going to be a part of our lives. We do these things as a story. It’s a storybook it.
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So we introduced it slowly with the idea, as Kevin mentioned earlier about this enormous growth in data, some of which isn’t great, but that’s a whole other subject altogether because so much data is being produced that the LMS are kind of sometimes categorizing themselves. But that’s another story. And then this is essentially a history. So if you have visual units still in your news organizations, good for you because I know that they are just chopping them out of your news operations, which is the saddest thing to ever happen. So if you ever have the wherewithal to persuade your editors, keep your visual departments, they’re essential to your operations, or if not, find an outsourced partner that can help do it. So this is a historical timeline that we made of how information has been displayed through the ages. And one thing you’ll notice when we did this visual essay is because the data, the subject is so modern, I specified to visual capitalists that I wanted a look and a feel to this essay that looks old and looks ancient.
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So we had this look like peppers, just the ancient paper. And I specified that the font, I wanted it to look a bit like bones and the overall sort of color of the entire report I wanted it to look like, because there’s a sculpture I really love that is bronze. And if you know bronze, you sort of think about bronze statues as being sort of greenish because of the oxide. But bronze also can appear to look like anything you want shiny. Or in this particular case, the sculpture that I particularly liked was the process called patternation, which is an application of acid to the bronze.
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And this one in particular made it look like wood, and I really love that bony color. And I said, I want you to recreate this color. So they made this palette for me, which is great. So one key aspect of presenting the data story is through maps. This is a very effective way of always telling a story that is global and you have to sort of point out. And later on in this visual, as assay becomes more and more apparent why we do it, this is about AI’s, the advent of AI generating more data than ever before. That’s a potentially negative thing in some aspects. The EU AI Act that Gareth refers to is trying to control that. But the side effect of what it does is that it focuses, it kills the innovation that comes with the golden goose. So we talked about which countries control which data, and we talked about opportunities and challenges.
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Here we sort of drift into AI because inevitably all this ends with AI, and you see where AI is learning the best here. A lot of it is just playing around with visuals. I’m just going to flick through all of this and I you’ll see that this one in particular is a picture of subsea cables and you kind of see the world. It’s a map, but it’s a map of subsea cables. And it tells you, I mean to me is a visually striping way of understanding that data travels through physical conduits, and those physical conduits are subject to geopolitics. And geopolitics right now dominates trade. So now we moved into the war on data and it tells you the amount of restrictions that you are already beginning to see, can see my eyes are failing me, I see from the eyes are failing me, I can’t pivot, blah, blah, blah.
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And you’ll see that Europe in particular is green and it has a medium. And this is the World Bank, if I recall, a medium level of data restrictiveness. And that’s more or less, right, if you sort of view it from, well, what is restrictive now? What is restrictive? If you think about it in terms of localization of demands on where companies put their service and where they locate that data, Asia is a pretty restrictive place. I mean, you can see that this chart tells you a little bit more when you look at the number of interventions that they have held. You’ll see that suddenly Europe is a much darker shade of green, and that means that they are highly interventionist in a way that perhaps Asia isn’t so much. You can see that. So these are ways that you can tell the story without using that much words because it’s quite complex.
(00:43:33):
And this is an important point because it relates back to what Gareth is talking about. What’s happening today in Asia is that Asia is on the cusp of deciding what is it going to do. And let me share with you one thing, and it has nothing to do with this graphic. So if you look at the e-commerce deal that is hanging by a thread at the WTO that Gareth was talking about, and Gareth said that it had about 91 countries, I’m sorry, slightly inaccurate because it began with 91 countries. So 91 countries five years ago came together and said, you know what? We want to have a deal on e-commerce. We want to set the base rule, the basic rules of what is one of the most important industries that we’re going to have for the rest of our lives. Five years later, the e-commerce moratorium was almost killed.
(00:44:38):
Now, a bunch of these countries, instead of going back to Geneva, instead of going back to their home capitals just be drag and disillusioned and just wanting to take a holiday, they got angry and they said that this will not stand. This is a line in the sand and we are fighting back. And this includes Singapore, it includes Australia, it includes Japan, and it included about 80 something of those 91 countries. And what happened was that there was a quiet rebellion that was going on in Geneva, and these countries were saying that we are going to have an e-commerce deal, do or die. We are going to do this. And that’s where we are. In late April of last year, this group at the time, 82 countries signed on to what is called the stabilized text. I apologize for all these very, very tedious terms, it’s just that’s how they speak.
Gareth Tan, APCO (00:45:44):
It is. It’s very sad.
Chuin Wei Yap, Hinrich Foundation (00:45:46):
Yeah. They came out with this stabilized text with, in effect is an e-commerce deal, 82 countries on board just about half of the 166 members of the WTO in it, the preservation of the e-commerce moratorium. And this deal is probably going to get killed along with the e-commerce moratorium because it cannot make it into the WTOs canon of legal agreements. So it can only survive in the shadows or not exist at all. So we have two things, and now the membership of this deal is down to about 70 something members because some have dropped out along the way. The survival of the e-commerce moratorium and the survival of the e-commerce JSI, as they call it, are crucial to the future of services to the future of data because the innovation that drives the way data is being created and the value that data has in terms of putting a price on what we pay as services and hopefully bringing down that price and giving us an ability to understand what is it that we are paying for and what portion of it are we willing to give to the government. That is an important piece of what we talk about when we talk about trade. It is an understanding of what relationship do you want to have with your governments and how much control you want them to have over the data that you have, that you own. So we ended up with staying informed, and that’s probably where I’ll wrap up. I mean, there’s a whole other conversation on regulations because Gareth again touches on this. Europe is a great example.
(00:48:10):
You don’t want to have a regulation of data and AI to the point where you can influence a country’s elections. Clearly you don’t want to have that, but neither do you want to have regulations that will kill the technology companies that are driving the innovation of this one thing that is left in the global economy’s key drivers of growth. And I’ll tell you something, Asia can’t decide. I mean, Gareth is very optimistic about this. I’m rather much more cynical than he is. Good man.
Gareth Tan, APCO (00:48:54):
I’m a younger person. It’s fine.
Chuin Wei Yap, Hinrich Foundation (00:48:55):
Yeah. When you look at the e-commerce deal that is going to die next year and that we have worked so hard to try to preserve, dare you in my heart every time and you look at ASEAN, let’s leave our East Timor for now. Let’s go with the 10 members of ASEAN. A place that is export driven depends heavily on services more than anything, has SMEs that that are using e-commerce as a critical means of lifting their populations out of poverty. And who’s in and who’s out of the e-commerce deal, who’s in Singapore? Obviously we’re a co convener. Malaysia, Laos, and Myanmar probably just sort of going with the flow. And Bruna probably just going with Singapore Flow. Who’s out? Who’s in the out column? Not in the deal. Indonesia, Thailand, Philippines, Cambodia. Who am I missing? Vietnam. Vietnam. Vietnam was never in the e-commerce talks to begin with, not even in the 91 when it was first convened five years ago. So you can see even in a region like Asiah, and you have five and five, so whatever you hope at the end of the year, good luck. We live in home live. So that’s why I want to leave it. It is a highly contentious issue. If there’s anything that you cover out of this at the end of your stints, pay attention to what’s happening on e-commerce next year at the WTO and whatever you can do to sort of save this moratorium, I think the world will Thank you for it. Anyway, question time.
Kevin Johnson, NPF (00:50:57):
It’s a good way to leave it. Good luck.
Shreya Nandi, Business Standard (00:51:02):
Hi. Hi, I’m Shea from Business Standard Newspaper, India. So my question is regarding the e-commerce moratorium. So one part is about how we mentioned that US’ idea to impose a hundred percent telephone movies. Isn’t it very contradictory to what US’ stand is at the WTO? How does that work out? And also as far as the e-commerce moratorium is concerned, so developing countries are of the view that certain digital players, as time has evolved, they’re also making a lot of profits. So this would sort of be a right time to also sort of tax this space. So what do you have to say about that?
Gareth Tan, APCO (00:51:45):
Sure. Yeah, I mean, first of all, on the point about the United States, I think the United States’ stance at WTO has changed very significantly over the past few months. Certainly. I mean, you may know that the US is no longer paying its dues, WTO, it actually comprises 11% of the WTOs budget. And so they are kind of like retreat from the situation is leaving quite a significant hole in the discussions. I mean, Chin’s point, one of the countries that has actually pulled out of that deal is the United States, as in the United States is not formally indicated. It’s agreement with the e-commerce deal. And that was actually potentially a significant domino pushing in that direction. But importantly, it’s important to look at the fact that the US should not be the singular kind of bellwether for international trade anymore. International trade I think has created positive circumstances for countries all across the world developing and developed countries in AAN certainly as well. And it is incumbent on small countries as well to also stand up for trade.
Chuin Wei Yap, Hinrich Foundation (00:52:58):
Yeah, it’s a great question. It’s a delicate answer. I mean, the answer has to be delicate. The United States is, if you take certain personalities out of the discussion, conflicted about this now, even when he was destroying the dispute settlement system at the WTO, Bob Lhe, the former USTR under the first Trump administration made sure that the US always kept the seat at the e-commerce talks always all the way and was quite supportive. They dropped out in April last year when the stabilized tax came out. And it wasn’t because, I mean based on sources that have disclosed this, because they didn’t support it. It was simply because the US couldn’t be seen in a WTO deal together with China supporting an aspect of trade in an election year. It’s just you’ll lose. So they said, hold on. And he dropped out.
(00:54:15):
There’s one significant development. They brought the deal to what they call the general council of the WTO. The general counsel is basically all the ambassadors of the countries, the 166 countries, and they are the deciding body in Geneva of the institution itself. If you want to get anything done legalized at the WTO, you have to go to the general counsel. So they put the WTO deal, the stabilized text to the general counsel in February fully expecting it to be killed. And it was by Indonesia, by South Africa, by India. All the usual obstructionist objection is refuse nicks. I think one way of putting it, the United States didn’t object, which is to say that the United States was actually willing to let this deal go ahead even if they’re not in it. And I think that if you were to architect a way back for the United States into the rules-based trading order, it is a FRI read to hang on to, but e-commerce is the way to do it. The e-commerce deal at the WTO remains that narrow opening through which you could draw the United States back to the table. Why do I say this? Because the US has a lot to lose here. I mean, the technology companies are some of the most profitable and innovative producers and a lot of what the EU is doing when it regulates with the Digital Markets Act and the AI Act is actually trying to control what big tech can do within the EU jurisdiction. That’s what it’s all about.
(00:56:26):
So when Trump threatens a hundred percent tariff on movies, it could be him just sort of riffing. But if you look at the overall technocratic direction of the us, it does not support a desire to tariff e-commerce or electronic transmissions, if you want to call it that. Now, that is a little different from saying taxation. Sorry, I’m just getting a bit nerdy here, because the whole idea of the language of what is an e-commerce moratorium then a moratorium is on taxation or taring. It’s actually on taring because if you start talking about taxes, does Singapore tariff e-commerce, the answer you guys would instinctively say is no, but actually it does in a form of GST general services, the general goods and services tax. So you actually pay 9%. Now, is that an e-commerce tax? Well, it is. But is it an e-commerce tariff? No, it’s not. So the United States is going after things like value added taxes and GSTs AS and NTB, which is a completely different proposition from going after tariffs on services. So that kind of distinction you have to really understand and it’s a different kettle of fish. What they are trying to do is GST And is value added tax a tariff? Is it a non tariff measure?
(00:58:37):
I mean, we’re on the record, right? I personally don’t think so. It is a sovereign country’s right to impose a consumption tax within its domestic jurisdiction. The argument now is that, well, it may not be. It might be a non tariff measure. Anyway, that’s a whole different argument. This is a very long answer. Sorry to your very intelligent questions though.
Gareth Tan, APCO (00:59:08):
Sorry. To the point about developing countries as well. I mean, I refer to the point I made earlier about the fact that data, there is a value to data, but it’s only a value as long as you can extract it is if you have the resources, the skills to actually extract the value from the data. And a lot of the time that requires the use of tools or the use of facilities that may not be located in your country for whatever reason, a country like a developing country like India for example, may have access to facilities now, but it wasn’t necessarily the case previously. So now actually in many ways, India actually stands to suffer from the removal of the e-commerce moratorium because it is a net exporter of digital services and digital goods as well. Functionality. Yeah. Right.
Si Ying Thian, GovInsider (00:59:53):
Thanks for presentation. This is Ying from Gov Insider. I have two questions about DFA itself because I think I can’t help, but I’m reminded of the Singapore JO Hall, especially economic zone where it’s been down, up, down, up. And then I think there’s a lot of SMEs that mentioned that because of the change in political leadership and commitment, they’re not sure whether they want to invest. They want to go into your home, Malaysia to invest as well.
(01:00:21):
And so I’m seeing maybe some symptoms with Defi as well. You did mention that it’s not even 50% there, but you’re sort of hopeful that we’ll eventually get there when it comes to the whole framework itself. And so my first question is, aside from face, like every country just committing asel is quite diverse when it comes to political leadership change and things and the commitment might not be there anymore. What are the other factors that you’re hopeful in terms of whether it might allow differ to come to fruition? This is my first question, and the second part is if DEFA doesn’t go through, are there some low hanging fruits that Asan can work on to accelerate digital economy?
Gareth Tan, APCO (01:01:04):
Sure. I think to the first point, aside from just the phase component, I think there is an increasing awareness of the need to present a stronger value proposition at the ASEAN level. This is not necessarily an immediate cause for optimism. Each individual country in ASEAN will take a long time to fall in with this idea. But generally speaking, the policy makers that we’ve spoken to have changed their tune slightly, I think because it used to be the case that everybody would give Cian kind of lip service, but everybody would just kind of say, oh, this is a vehicle for X other cian country basically. And then this is not my problem. Now, I think more and more of them are being a bit more invested in the discussions. Again, it’s not something that will manifest immediately, but we’re hoping that it will be something that kicks up next year when they’re talking about the implementation frameworks for DFA as well.
(01:02:03):
In terms of the completion, like I said, they’re only aiming for substantial text at the end of this year, which means that it’s not the full completion and implementation of it. So we’re hoping that at the very least, the framework that is produced at the end of this year is a relatively robust one. And second question, pardon of me was about Sure. Yeah, right. Well, I mean, I think if there’s anything again that the liberation Day terrorists have demonstrated it is that global trade, as G has mentioned, is definitely not dead. A lot of different countries are becoming a bit more kind of inclined towards seeking their own engagements in terms of securing trade agreements and whatnot. Thailand, for example, is working very strongly to kind of engage with the European, European Union. India has renewed its engagement with a number of different parties, for example.
(01:03:01):
So I think this is something that will definitely continue in the Asia Pacific as a whole, and definitely within ASEAN as well. I mean, I don’t anticipate that the situation moving forward will lead to a diminuation of ASEAN significant insignificance. I think that it will only lead to eventually countries realizing that they do need to stick together in the absence of the United States as the singular arbiter as it used to be potentially in the past. But again, I’m an optimist, so I have no choice but to be optimistic. That’s a long road ahead of us.
Chuin Wei Yap, Hinrich Foundation (01:03:38):
And on this point, I agree with Gareth that there will be very likely a baseline of desire in our cion for that kind of achievement. I don’t think there’s any doubt about that. And they will, in all likelihood, produce that substantial substantive text. It’s when you drill down to the issues where you start seeing the differences emerging. But that’s natural. I mean, that always happens, but the baseline desire is a common one, and it is very different from what you see in other major jurisdictions. So it’s headed in the right direction. All the comments that I made earlier about the different ASEAN positions on the e-commerce JSI and the WTO, well, that’s a separate matter because that actually addresses a lot of other key tenets of the World Trade Organization itself and the politics within it that are not quite the same ASEAN DEFA. ASEAN is the safe
Gareth Tan, APCO (01:04:49):
Space.
Chuin Wei Yap, Hinrich Foundation (01:04:51):
So yeah, we are going in that direction. And what was I going to, yeah, that I had thought about something else, but anyway, it’s sort of slipped my mind
Kevin Johnson, NPF (01:05:09):
Unfortunately. I think we have to leave it there. But I think when we were planning this session, I didn’t realize I was pairing two rivals here. One optimist, one pessimist. We agree on it. No, no, not rivals. Same coin. No, but in thought,
Chuin Wei Yap, Hinrich Foundation (01:05:26):
I’m just more pessimistic than Gareth is,
Kevin Johnson, NPF (01:05:30):
So that’s why you should take this show on the road. But thank you. It’s a perfect way to cap day two and thank you so much for doing it.
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