1. Digital Trade and Belgium
FLANDERS INVESTMENT & TRADE
Erik van der Marel
Senior Economist at ECIPE
Univesité Libre de Bruxelles (ULB) - Solvay Brussels School
2. Concept
• Fiscal restrictions
• Investment in digital sectors*
• Digital services
• Digital-intense services (and goods)
• Role of “data” in the economy
• E-commerce (online transactions)
3. Wider digital economy and policies (BE)
• ECIPE’s Digital Trade Restrictiveness Index
Chapters Chapters (cont’d)
(1) Tariff and Trade defence (8) Data policies (see above)
(2) Taxation & Subsidies (9) Intermediary liability
(3) Public procurement (10) Content access
(4) Foreign investment (11) Quantitative Trade Restrictions
(5) Intellectual Property Rights (IPRs) (11) Standards
(6) Competition policy (13) Online sales & transactions
(7) Business mobility
4. Wider digital economy and policies (BE)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
CHN
RUS
IND
IDN
VNM
BRA
TUR
ARG
FRA
THA
MYS
PAK
DEU
ECU
KOR
NGA
ZAF
MEX
ROU
BRN
ESP
USA
TWN
GRC
ITA
HUN
AUS
SVK
CAN
CHE
FIN
PHL
BEL
POL
DNK
LTU
EUR
PRY
COL
SWE
BGR
ISR
HRV
GBR
AUT
PRT
CZE
CYP
SVN
JPN
EST
LUX
LVA
NLD
MLT
CHL
SGP
PER
CRI
PAN
HKG
IRL
NOR
ISL
NZL
Digital Trade Restrictiveness Index (DTRI)
Index Average
5. Wider digital economy and policies (BE)
• Belgium is relatively more restricted in:
• Investment restrictions in digital sectors, competition policy
regarding telecom sector, some taxation issues.
6. Wider digital economy and policies (BE)
• Investment
• There is a legal requirement for the state to retain a 50% plus one share stake
in Proximus (Belgacom incumbent)
• The European Commission has raised concerns on the independence of the
telecom regulator, the Belgian Institute for Postal Services and
Telecommunications (BIPT).
7. Wider digital economy and policies (BE)
• Competition
• The privatization of the Belgian telecom market began in 1998 and Belgacom
(the incumbent) still owns access to the last mile.
• By 2012, the Belgian government owned 53.51% of Belgacom Group or
commercially known as Proximus, the incumbent.
8. Wider digital economy and policies (BE)
• Taxation
• Relates to B2C suppliers of telecommunications, broadcasting and
electronically supplied services. All supplies of telecommunications,
broadcasting and electronic services will be taxable at the place where the
customer belongs
• Copyright levies
12. The role of data in globalization
• Contribution of data to GDP > goods (McKinsey)
• Particularly great role in Artificial Intelligence (Goldfarb and Trefler, 2018)
13. Data-intensity (US Census)
5.9
4.6
3.4
3.0
2.3
1.6
1.4
1.2
0.9 0.9
0.7 0.5
0.4 0.3 0.3
0.1 0.1 0.0
0246Telecom
C
om
puter
Inform
ation
Financial
Insurance
Intellectualproperty
O
thertransport
Sea
transport
Audiovisual&
related
Airtransport
R
&D
Professional&
m
anag
Postal&
courier
Personal,cultural&
recr.
Tech.,trade-rel.&
other
M
aintenance
&
repair
C
onstructionTravel
Data-intensity Cap (over labour)
14. Data-intense services (Mode 3 / Mode 1; gross terms)
Source: Andrenelli et al (2018); using analytical AMNE database.
15. What “trade” policies are problematic?
Internet com
services
Cloud-based
data
processing
Digital
content
E-commerce IoT
Data measures
Data protection and privacy x x x x x
Data localization x x x x
Cybersecurity measures
Disclosing source codes x x x x
Restrictions on cryptography x x x x x
Censorship x
IPR measures
Intermediate liability x x x
Anciliary copyrights x x x
USITC (2017)
17. Are data policies harmful?
• Yes, they lower productivity and lower services trade
• Productivity losses are high – role of ideas in technology
18. Data policy index and exports in GDP
ARG
AUS
AUT
BEL
BGR
BRA CAN
CHE
CHL
CHN
COL
CRI
CYP
CZE
DEU
DNK
ECU
ESP
EST
FIN
FRAGBR
GRCHKG
HRV
HUN
IDN
IND
IRL
ISL
ISR
ITA
JPN
KOR
LTU
LVA
LUX
MEX
MLT
MYS
NGA
NLD
NOR
NZLPAK
PAN
PERPHL
POL
PRT
PRY
ROU
RUS
SGP
SVK
SVN
SWE
THA
TUR
USA
VNM
ZAF
02468
0 .2 .4 .6 .8 1
Data policy index (2015)
19. Conclusions
• Digital trade is more than just Alibaba
• Many services today (Belgian’s CA) are coming data-intense
• And more and more trade over the internet
• Belgium can trade and is more ready than policy predicts
• Able to capitalize much more than it currently does!