Digital Trade Agreements and Their Implications for Developing Economies

Abstract

The rapid development of digital trade requires the revision and modernization of rules governing the international circulation of goods and services. The expansion of e-commerce regulation may significantly influence the export performance and economic growth of developing countries. The study aims to determine the impact of e-commerce provisions in trade agreements on ICT goods exports and  economic growth in developing countries and to identify country groups according to their regulatory and economic characteristics. The study combines statistical and regression analysis of TAPED data on e-commerce regulation with World Bank panel data on ICT exports and GDP growth for 2006–2024. The analysis covers 113 developing economies and 261 trade agreements involving developed, developing, and least developed countries across Africa, America, Asia, Europe, and the Pacific. Correlation-regression analysis and hierarchical cluster analysis using the k-means method were applied to identify relationships and classify countries by regulatory intensity and economic performance. Developing countries generally apply less stringent e-commerce provisions within free trade agreements. Regression analysis indicates that softer e-commerce regulation is positively associated with ICT export volumes. Cluster analysis identified nine countries characterized by e-commerce regulation, relatively high GDP growth, and a substantial share of ICT exports. Another group demonstrated limited e-commerce regulation, lower or moderate GDP growth, and smaller ICT export shares. Of the 261 agreements examined, 55.17% contain e-commerce provisions and 36.02% include dedicated sections. Regulatory disparities, limited e-commerce promotion, insufficient SME support, and unequal trading conditions constrain developing countries’ digital trade potential. Effective digital trade regulation can reduce barriers to electronic transactions, facilitate paperless trade, strengthen consumer protection, and support ICT exports. Harmonized regulatory approaches and stronger institutional support for e-commerce may enhance the participation of developing economies in global digital trade.