The world economy is just 8.5% of the way towards what could be considered full global digital trade integration and openness. However, recent years have seen an increase in the diversity of the issues covered in international discussions, largely due to digital trade provisions in trade agreements and digital economy agreements. However, these represent only 10% of existing digital trade integration and openness. At present, global digital trade integration and openness remain largely driven by WTO initiatives which incorporate more countries.
OECD Index of Digital Trade Integration and Openness (INDIGO)
The OECD Index of Digital Trade Integration and Openness (INDIGO) offers a clear, comprehensive snapshot of international digital trade discussions and commitments across 193 countries since the year 2000. Ranging from zero (no digital trade integration or openness) to one (full integration and openness across all relevant issues and partners), the OECD INDIGO captures both the breadth and depth of global digital trade engagement. It is updated annually and is designed to help policy-makers evaluate how far countries have come – and how far they have to go – toward full digital trade integration.
Key messages
Beyond trade agreements, many critical issues for digital trade are addressed in international fora such as the United Nations, the OECD, and the Asia-Pacific Economic Cooperation (APEC). For example, the adoption of UNCITRAL instruments – such as the Model Law on Electronic Commerce – plays a central role in enabling digital transactions. Likewise, evolving international frameworks on privacy, including the OECD Privacy Guidelines (updated in 2013) and the APEC Cross-Border Privacy Rules (CBPR), are influencing global standards. Important progress is also being driven by international agreements on Artificial Intelligence governance developed at the G20, OECD, and UNESCO.
The more countries join the agreement, the higher the overall impact on the INDIGO and on trade. However, digital trade integration and openness would increase to different extents for individual countries. For those that are currently most integrated, such as Singapore, Australia or Japan, the AoE offers the possibility of more modest increases in the INDIGO, at around 30%, as a result of goring commitments with countries that they do not currently have an agreement with. However, for those that are currently least integrated, such as Benin, Burkina Faso and Gambia, the AoE offers the possibility of signing a set of digital trade provisions with 71 new partners leading to a doubling of their INDIGO. It is also important to note that there is an opportunity cost to not participating. Many top performers, including Indonesia, Thailand and Viet Nam, would see their INDIGO ranking fall considerably as others join the AoE and they do not. For example, Viet Nam, would move from 5th of 39th position if the AoE were to be signed without them.
Digital trade integration and openness differs across countries
The INDIGO-t tracks international integration and openness to digital trade at the country level. Singapore is identified as the most integrated and open country with an INDIGO t of 0.17. This is largely on the back of its ambitious digital trade provisions in RTAs which represent nearly 0.08 points, that is 44% of Singapore’s existing digital trade integration and openness. Australia and Japan follow closely with an INDIGO-t around 0.16, showing they are 16% of the way towards what might be considered full digital trade integration and openness.
Digital trade provisions in RTAs, while growing, still represent a small share of global digital trade integration and openness
On a global scale, the INDIGO-t shows progress, but there is a long way to go. The world economy is just 8.5% of the way towards what could be considered full global digital trade integration and openness. At present, integration is driven by WTO agreements such as the WTO Telecommunications reference paper, the Information Technology Agreement (ITA) and the WTO e-commerce Moratorium as well as the Trade Facilitation Agreement. Existing commitments under regional trade agreements represent only 10% of existing digital trade integration and openness. While they cover a broader set of issues, they involve a more narrow group of countries.
International discussions on issues that matter for digital trade are growing
In terms of non-trade discussions, the INDIGO-I shows that progress has been somewhat slower, we are 6% of the way towards full digital trade integration and openness in non-trade discussions. In particular progress has been most pronounced in the area of trust and e-commerce, through international discussions on privacy, including the OECD Privacy Guidelines as well as data flows, including the APEC CBPRs. In recent years, progress has been fastest in wider digital economy issues, with international agreements on taxation under the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS), as well as emerging frameworks for Artificial Intelligence governance developed at the G20, OECD, and UNESCO.
Tools
The OECD Index of Digital Trade Integration and Openness (INDIGO) Simulator is designed to help policymakers navigate the evolving international digital trade environment and to identify ‘what if?’ scenarios. The INDIGO Simulator shows how much digital trade integration and openness will increase as a result of changing international commitments.
