Survey Background and Objectives This is a strategic survey report conducted by METI aimed at strengthening Japan's position in the formation of international digital trade rules and enhancing the competitiveness of domestic digital industries amid the rapid expansion of the digital economy. The study analyzes rule formation processes in multilateral and bilateral frameworks including WTO e-commerce negotiations, CPTPP, and the Japan-US Digital Trade Agreement, while examining support measures for Japanese companies' overseas expansion.
Digital Trade Market Trends Global digital trade value reached $3.8 trillion, representing an 18.4% year-on-year increase, with Japan accounting for 8.3% ($315.4 billion) of this total. Digital services exports particularly recorded $98 billion, a 22.7% increase from the previous year, with gaming and entertainment accounting for 32.1% and fintech/payment services representing 28.9%. However, data localization requirements constrain overseas business expansion for 42.6% of Japanese companies, with estimated annual opportunity losses reaching ¥120 billion.
Current Status and Challenges in International Rule Formation International rules for digital trade are experiencing fragmentation, with 83 different agreements and frameworks coexisting. Major issues show divided positions among countries: data free flow (supported by 62 countries, restricted by 28), prohibition of data localization (supported by 47 countries, reserved by 33), and prohibition of source code disclosure requirements (supported by 52 countries, opposed by 25). Emerging challenges include AI and algorithm transparency requirements, platform regulation, and encryption technology export controls.
Strategic Recommendations and Policy Directions To strengthen Japan's leadership in digital trade rule formation, the report proposes establishing a "Digital Trade Strategy Promotion Program" with an annual budget of ¥30 billion. The allocation plan includes ¥10 billion for dispatching and developing specialists for multilateral negotiations, ¥12 billion for supporting corporate international expansion, and ¥8 billion for technical cooperation and capacity building support with emerging countries. The goal is to standardize Japan-led digital trade rules in over 20 countries by 2030 and double Japan's digital services exports from the current $98 billion to $200 billion. Additionally, the report promotes building a Data Free Flow with Trust (DFFT) framework and strengthening cooperation with like-minded countries.