The digital economy is sometimes characterized narrowly as online platforms and activities that owe their existence to such platforms, however, in a broader definition, all activities that utilize digitized data constitutes part of the digital economy.^[1] Depending on the definition of “digital economy,” current estimates of the size of the digital economy range from 4.5 percent to 15.5 percent of global GDP.^[2] Over the next decade, it is estimated approximately 70 percent of new value created in the economy will be based on digitally enabled platforms.^[3]

In 2017, APEC Leaders pledged to work together to realize the potential of the internet and digital economy and welcomed the adoption of the APEC Internet and Digital Economy Roadmap. The Roadmap is a framework that provides guidance on key areas and actions to facilitate technological and policy exchanges among member economies and to promote innovative, inclusive and sustainable growth, as well as to bridge the digital divide in the APEC region. It lays out eleven key focus areas of work.

In 2018, the creation of the Digital Economy Steering Group (DESG) was agreed upon at the Concluding Senior Officials Meeting (CSOM) in Port Moresby. The DESG aims to facilitate the development of the internet and digital economy, including e-commerce and digital trade. As the inheritor of the deliverables of the Ad Hoc Steering Group on the Internet Economy (AHSGIE), the DESG will advise Senior Officials on a comprehensive and regular basis on implementation of the Roadmap, giving full recognition to the Roadmap’s broad scope. In addition, the DESG shall preserve the functions of the former Electronic Commerce Steering Group (ECSG) and continue to report to the Committee on Trade and Investment (CTI) on matters of the ECSG’s existing work program on e-commerce and trade-related digital economy issues.

Last page update: January 2020

APEC Action Agenda for the Digital Economy

Under the 2018 APEC Action Agenda for the Digital Economy, APEC Leaders welcomed the creation of the DESG to implement the Roadmap. In order to implement the Roadmap in a comprehensive manner and to provide a platform for future work, APEC has committed to:

1. Preparing a comprehensive work program on future implementation of the Roadmap with contributions from committees and sub-fora, as appropriate. This will examine the broad potential opportunities and challenges presented by digital technologies;

1. Develop a program for future data and analytical support for work under the Roadmap. As a contribution to this work, the 2019 APEC Economic Policy Report was prepared with a focus on the topics of structural reform and the digital economy;
2. Developing any further areas of work that might be examined, given the Roadmap is a living document and the rapid development of digital technologies points to the potential for new topics to arise in the future.

With the finalization of the DESG’s terms of reference at the Third Senior Officials' Meeting 2019, the DESG is expected to work on these commitments and report on their achievements for 2020.

Data Privacy Subgroup (DPS)

The APEC Data Privacy Pathfinder was established by ministers in 2007 to achieve accountable cross-border flow of personal information within the APEC region.  This goal is to be achieved by developing and implementing the Cross-Border Privacy Rules (CBPR) system, consistent with the APEC Privacy Framework, which was first endorsed by APEC ministers in 2004.

Progress on the implementation of the APEC Privacy Framework includes the application of Information Privacy Individual Action Plans (IAPs) by 14 economies, and the creation of a study group within the Data Privacy Sub-Group (DPS) to analyze and identify best practices and the role of trust-marks in promoting the cross-border flow of information.

Notable progress in this area was made by the establishment of an APEC Cross-Border Privacy Enforcement Arrangement (CPEA) in July 2010.  This multilateral arrangement provides the first mechanism in the APEC region for privacy enforcement authorities (PEAs) to share information and provide assistance for cross-border data privacy enforcement.  The CPEA signifies the ongoing commitment within APEC to increase the protection of cross-border flows of personal information and is a significant step in the effective implementation of the APEC Privacy Framework.

APEC ministers endorsed the principal documents of the APEC Privacy Pathfinder in November 2011 in Honolulu, Hawaii.  APEC Leaders also committed to implementing the CBPR System “to reduce barriers to information flows, enhance consumer privacy, and promote interoperability across regional data privacy regimes.”

APEC Cross-Border Privacy Rules (CBPR) System

In November 2011, the APEC Leaders issued a directive to implement the APEC Cross Border Privacy Rules (CBPR) system.  The CBPR system balances the flow of information and data across borders while at the same time providing effective protection for personal information, essential to trust and confidence in the online marketplace.  The system is one by which the privacy policies and practices of companies operating in the APEC region are assessed and certified by a third-party verifier (known as an accountability agent) and follows a set of commonly agreed upon rules, based on the APEC Privacy Framework.  By applying this commonly agreed-upon baseline set of rules, the CBPR system bridges across domestic differences that may exist among domestic privacy approaches. Currently, eight APEC member economies— Australia, Canada, Japan, Republic of Korea, Mexico, Singapore, Chinese Taipei and the United States—have aligned their privacy laws with the APEC Privacy Framework.

APEC Privacy Recognition for Processors (PRP) System

The Privacy Recognition for Processors System (PRP) governance documents were endorsed by APEC in August 2015.  The PRP system is designed to help personal information processors assist controllers in complying with relevant privacy obligations, and helps controllers identify qualified and accountable processors.  This is done through an intake questionnaire, which sets the baseline requirements of the PRP. The APEC-recognized accountability agent will then assess a processor seeking recognition based on a set of requirements. Currently, two APEC member economies—Singapore and the United States—have joined the PRP System.

APEC Privacy Framework 

The updated APEC Privacy Framework 2015 addresses the gaps in policies and regulatory frameworks on e-commerce to ensure that the free flow of information and data across borders is balanced with the effective protection of personal information essential to trust and confidence in the online market place. The update of the Privacy Framework was endorsed by ministers in November 2016.