Chile sees ‘long line’ of nations looking to join digital partnership initiative

Chile sees growing interest from several nations in joining the Digital Economy Partnership Agreement (DEPA), an international treaty brokered last year by the country and fellow APEC members New Zealand and Singapore.

“There’s a long line being formed of countries interested in joining the initiative,” Nicolás Schubert, senior policy officer at Chile's undersecretariat of international relations and directly involved in the negotiations, told a webinar.

Chile's congress ratified the treaty in August and it will come into force on November 23. In Singapore and New Zealand, DEPA came into effect in January.

DEPA's chief goal is setting common rules to promote enterprise-friendly regulations in order to boost exports of digital products and services. 

It is divided into 16 articles – or modules – that range from taxes and duties to cooperation and interoperability between the digital systems of the member countries.

"It was created due to the common interest between Chile, New Zealand and Singapore to take advantage of the potential of the digital economy to benefit small economies, while providing opportunities for inclusion to more people and SMEs into the global economy," according to a Chilean government statement.

Schubert was one of the speakers at a webinar promoted by Fundación Chilena del Pacífico to discuss potential synergies between DEPA and the Pacific Alliance trading bloc.

The Pacific Alliance is made up of Chile, Colombia, Mexico and Peru, and the Chilean government sees these countries as strong candidates for DEPA membership, the webinar was told.

Speakers on the webinar also said that Chile expects new members to come from other APEC countries and the nations that have signed up for the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP), the free trade accord that replaced the Trans-Pacific Partnership.

South Korea is a country that has formally expressed interest in becoming a member and a joint committee by Chile, New Zealand and Singapore has been set up to oversee this process.

The topics and commitments covered by DEPA go beyond what has been achieved in CPTPP in terms of e-commerce. Chile has for example proposed the inclusion of cooperation on artificial intelligence, digital identity and open data.

But Chile’s vision for DEPA goes much further.

“I envision a large common market for the digital economy in the Americas, encompassing several other countries,” Schubert said.

The general conditions are in place for such a market but there are important regulatory asymmetries between countries that would need to be adapted, he added. 

South American trading bloc Mercosur, made up of Argentina, Brazil, Paraguay and Uruguay, have some similar regulations related to the digital economy - although the deep disagreements between its members could pose a challenge for them to join DEPA, said Schubert.

DEPA does not prevent any country from seeking accession, but membership is only granted to those that commit to the treaty’s minimum standards, said Andrés Rebolledo Smitmans, an international trade expert and advisor on some of the free trade agreements signed by the Chilean government in recent years.

A key requirement is the elimination of import duties on digital services. 

Chile's exports of ICT services totaled US$430mn in 2019, with sales to 120 markets, according to the international relations undersecretariat (Subrei). More than 200 companies exported ICT services that same year, of which 114 were SMEs.