The trade and digital diplomacy nexus: markets, connectivity and technology

Participants at the Friends of Europe roundtable, entitled “The trade and digital diplomacy nexus: markets, connectivity and technology”, hosted on 16 March in partnership with HCL Technologies, discussed the many linkages between trade, connectivity and technology against the backdrop of the ongoing war in Ukraine.

“How do we ensure that the role of Europe is not only to export goods and services, but also its model?” asked moderator and Director at Friends of Europe, Dharmendra Kanani. “How can it shape behaviour through its trade and diplomatic connections?”

“The invasion [of Ukraine] has brought up the importance of robust and sustainable digital connectivity and has proven absolutely critical,” said Romana Vlahutin, Ambassador at Large for Connectivity at the European External Action Service (EEAS).

She explained how the Russian invasion has highlighted several “existential issues” when it comes to digital connectivity and that there is a need to invest more and better in three distinct issues, namely physical and human infrastructure, trust and security.

“If we really want to ensure the growth of economy-based data, we need to find common rules and interoperability,” she said, adding that trust is the most important commodity when it comes to digital connectivity.

According to Vlahutin, digital technologies have “created dependencies that can be weaponised” and there is a need to “invest in the resilience of these systems”. “We have to understand the security side of things and how incredibly dependent we are on the system we have built,” she said. “For all this, you need diplomacy.”

“The pandemic has accelerated the adoption of digital technologies, but the digital revolution goes beyond communication,” said Hong Huai Lim, Ambassador of Singapore to the European Union.

“The digital revolution is going to be as profound and impactful on global prosperity as was the Industrial Revolution and will transform the social fabric of society,” he stated.

The Ambassador highlighted the need to “transform our economies and workers for the digital age” and said that countries need to do more to invest in the digital frameworks of the future. At the same time, the digital transformation will be very disruptive, particularly for those less skilled. He therefore advocated for providing “lifelong education” so that workers have the skills to compete.

“We need to work collaboratively with stakeholders and leave no one behind,” he said. There is an incentive to deepen global integration in the digital domain, he explained, and referenced regional trade agreements that have established rules to facilitate e-commerce.

“Digital economy agreements can help provide common reference points on digital trade and serve as building blocks for architecture,” he said. “Digital technology has empowered millions, but the digital divide has also widened the gap between the haves and have-nots.”

Tadej Rupel, National Coordinator for External Aspects of Digitalization, AI & Cyber Security at the Slovenian Ministry of Foreign Affairs, said how we are currently living in a “TUNA” world – “turbulent, uncertain, novel and ambiguous”.

“What worked yesterday won’t necessarily work tomorrow,” he said. “Digital cooperation must keep pace with the accelerating shift towards a digital world, otherwise we risk a digital divide.” He explained how marginal countries risk being left behind as digital technologies reshape societies.

“The EU and its member states have the responsibility to show that there are alternatives beyond what China and the United States propose,” he explained. Digital diplomacy can help reach agreement on norms, he argued, rather than relying too much on state actors and technology companies.

“The agenda will be determined by those whose ideas are acceptable to [the] global majority,” concluded Vlahutin, who also called for non-state actors to be brought into the conversation.