The Impact of the United States-Japan Digital Trade Agreement on the Digital Trade Governance of ASEAN and East Asia

Aug 26, 2026

Analyzes how the United States–Japan Digital Trade Agreement (DTA) can influence digital trade governance across ASEAN and broader East Asia. Establishes the DTA’s role as a high-standard framework for regulating cross-border e-commerce while preserving governments’ right to regulate. Assesses tensions between DTA provisions and the interests of ASEAN member states and China, considering evolving commitments through other FTAs. Reviews existing WTO rules and gaps affecting e-commerce, then compares the DTA with TPP and USMCA approaches to identify transferable provisions.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages34

Reading Time1 h 26 min

AccessFree to download

Introduction

Existing WTO Rules and Commitments on E-commerce

# The Impact of the United States-JapanDigital Trade Agreement on the DigitalTrade Governance of ASEAN and East Asia Junji Nakagawa ## 1 INTRODUCTION The United States(US)-Japan Digital Trade Agreement(DTA)is astandalone agreement addressing the regulation and policies affecting e-commerce between the two countries(Governments of Japan and the US2019).Building on previous US treaty practices regarding e-commerce,the DTA has established a high standard of protection and promotionof e-commerce while respecting parties'legitimate right to regulate.TheDTA is especially noteworthy as Japan and the US are promoting negoti-ations at the World Trade Organization(WTO)on trade-related aspects For the US treaty practice on e-commerce,see USTR,Digital Trade and E-Commerce FTA Chapters,https://ustr.gov/issue-areas/services-investment/telecom-c-commerce/e- commerce-fta-chapters of e-commerce.²The DTA may,therefore,become a global standard forthe regulation of e-commerce if it is referred to as a template in the WTOnegotiations. Yet some of the rules of the DTA that reflect the policies of Japanand the US to promote and to protect e-commerce may not matchthe interests of various Association of Southeast Asian Nations(ASEAN)Member States(AMS),such as Cambodia,the Lao People's DemocraticRepublic(Lao PDR)and Myanmar,as well as other East Asian coun-tries like China.These countries have been politically reluctant to assumehigh-standard regulations on e-commerce.However,this policy stancemay have changed recently,because at least some have become partiesto various free trade agreements(FTAs)or standalone agreements thatprovide for high-standard protection and promotion of e-commerce. This chapter outlines the background of the DTA,focussing on theexisting WTO rules on e-commerce(Sect.4.2)and previous US treatypractice on e-commerce(Sect.4.3).It then analyses the content of theDTA in comparison with the chapters on e-commerce of the Trans-PacificPartnership(TPP)agreement and the US-Mexico-Canada Agreement(USMCA)(Sect.4.4)and explores which provisions of the DTA mayfit the interests of AMS and East Asian countries(Sect.4.5).Finally,inSect.4.6,it concludes with a few suggestions for AMS and East Asiancountries regarding regulations and policies on e-commerce. ## 2 ExISTING WTO RULESAND CoMMITMENTS ON E-COMMERCE Although WTO was established in 1995—when almost no e-commercetransactions occurred—several WTO agreements have provisions thattouch upon e-commerce.The General Agreement on Trade in Services(GATS)classifies four modes of services supply.Mode 1 covers the cross-border supply of services that is technologically neutral,and it includesthe supply of services through e-commerce.Hence,any WTO memberthat has made commitments to open a given sector to Mode 1 agreesto open up that sector to c-commerce(Wu 2017).In addition,theGATS schedules cover commitments in several services sectors that are 2 See WTO(2019),where Japan and the US,together with 47 WTO membersincluding Brazil,China,and the EU,confirmed their intention to commence WTOnegotiations on trade-related aspects of e-commerce. critical to enabling e-commerce,such as computer and related services,telecommunications services,financial services,and distribution services.To the extent that a WTO member has made commitments to open theseservices sectors,it has secured an enabling regulatory environment totrade in services via cross-border e-commerce. Other WTO agreements are also relevant.For instance,if the internetis the channel through which a transaction for a physical good is made,the good must be delivered across borders.The legal rules of the GeneralAgreement on Tariffs and Trade(GATT)1994,which governs tradein goods,are relevant in such circumstances,including most-favourednation(MFN)treatment(Article I),national treatment(Article III),and prohibition of quantitative restrictions(Article XI.I).The Agree-ment on Trade-Related Aspects of Intellectual Property Rights(

FAQs

What is the United States–Japan Digital Trade Agreement (DTA) designed to regulate?

It addresses regulation and policies affecting e-commerce between the United States and Japan, setting high standards for protecting and promoting e-commerce while respecting the parties’ right to regulate.

Why does the document argue that WTO rules are insufficient for e-commerce governance?

WTO agreements reference e-commerce only marginally and do not clearly resolve key issues such as defining digitally traded products, classification of non-physical digital goods, and regulatory matters like data localization and consumer protection.

How does the DTA’s approach relate to ASEAN and East Asian interests?

Some high-standard DTA rules may not align with interests of various ASEAN member states and other East Asian countries, though the document notes that policy positions may shift as some countries join FTAs or agreements with higher e-commerce standards.

Aug 26, 2026

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