Digital Trade Needs More Than Connectivity to Deliver Inclusive Growth: Here's why

A joint WTO-OIF publication places digital trade regulation at the center of the inclusive-growth agenda for developing economies and least developed countries. It argues that digital tools, e-commerce and AI can widen market access, but only if countries close gaps in infrastructure, skills, financing and regulatory capacity that could otherwise deepen inequality.

Digital trade is moving from the margins of trade policy to the center of the global development debate. A joint publication by the World Trade Organization (WTO) and the Organisation internationale de la Francophonie (OIF) argues that e-commerce, digital platforms and artificial intelligence can help developing economies and least developed countries connect firms to markets, strengthen resilience and support more inclusive growth. But the core warning is equally clear: the gains will depend on whether countries can build the rules, institutions and capabilities needed to participate on fairer terms.

The issue is urgent because technology is already reshaping trade flows. Digital technologies are changing how goods and services are produced, exchanged and consumed, while AI is expected to lower some trade costs and create new commercial opportunities. Yet the same transformation could leave low-income countries behind if they cannot reduce the digital divide.

Digitalization can help smaller firms reach customers beyond their immediate markets, support business continuity during shocks and reduce frictions in cross-border trade. During COVID-19, digital tools and e-commerce helped sustain economic activity and market access, especially for small and medium-sized enterprises, but the pandemic also exposed deep digital divides within and between countries.

AI raises the stakes for trade policy

The arrival of AI makes the policy challenge sharper. WTO figures cited in the publication show that global trade in AI-related goods rose by about 20 percent year-on-year in the first half of 2025, with AI-related products contributing 43 percent to overall trade growth during that period. Simulations for the WTO's 2025 World Trade Report suggest that AI could increase world trade by 34 to 37 percent and global GDP by 12 to 13 percent by 2040.

These figures point to a major opportunity, but they should not be read as automatic outcomes. The publication links those gains to policies that structure the digital economy, reduce the digital divide, invest in people, support workers and maintain an open, predictable rules-based trading system.

Digital trade depends on more than cables, devices and platforms. Trust in online transactions, consumer protection, personal-data safeguards, cybersecurity, system interoperability and cross-border data flows all require clear and predictable rules. Without them, firms may struggle to transact across borders, consumers may lack confidence, and smaller economies may face a maze of incompatible requirements.

The rulebook is already expanding, but unevenly. In the Asia-Pacific region, a mapping of 463 preferential trade agreements, including 237 involving at least one Asia-Pacific economy, found that agreements containing digital trade provisions have continued to grow. Yet the average share of such provisions in agreements involving least developed countries remains below 1 percent.

East and Southeast Asian economies are more active in incorporating digital trade provisions and shaping digital economy agreements, while Central and South Asian economies lag, especially in intraregional cooperation. Smaller and less developed economies risk exclusion if they lack the capacity to negotiate, implement and benefit from emerging digital trade rules.

Africa's digital trade test is regulatory, not just technical

Africa's experience shows why digital trade is also an integration challenge. The publication links digital trade regulation to the African Continental Free Trade Area and its digital trade protocol, arguing that the right balance of investment, regulation and regional integration could support intra-African trade, lower trade costs, diversify growth and expand participation by small businesses and women.

Africa-focused chapters identify regulatory disparities and restrictions across key areas of digital trade, as well as incomplete or competing legal frameworks for consumer protection and cross-border electronic transactions. These gaps matter because digital trade depends on trust: firms and consumers need confidence that payments, data, contracts and remedies will work across borders.

The economic stakes are also clear. Despite a strong rebound in 2024, intra-African trade remains around 15 percent of the continent's formal merchandise trade, reflecting continued dependence on external demand and vulnerability to outside shocks. The publication frames digital trade facilitation as one way to reduce costs, especially those linked to documents and border procedures that can disadvantage smaller firms and women-led businesses.

Measures such as single windows, digital identity, paperless documentation, trade finance tools and wider use of digital technologies cannot deliver full value if they are introduced in fragmented ways. The policy challenge is to harmonize enough to make cross-border trade easier while preserving national space to regulate privacy, security, consumer rights and development priorities.

Inclusion will be won or lost at the firm level

The strongest test of digital trade policy is whether it reaches the firms and workers most likely to be excluded. The publication's Mauritius case study, based on 380 firms, found that investment in new technologies and the use of e-commerce were important for business survival and recovery after the pandemic, particularly for women-led enterprises. But it also points to barriers around information, training and finance that limit women's ability to enter digital commerce.

The Kenya case underlines the same point. Women face constraints including limited access to formal financial services, the cost of mobile, internet and smartphone access, lack of broadband connectivity, weaker ability to use mobile internet, higher illiteracy rates and greater vulnerability to cyber threats. Public policies may aim to reduce the digital divide, but they do not always address the specific barriers women face.

This is why the debate cannot stop at digital infrastructure. Connectivity is necessary, but it is not sufficient. Inclusive digital trade also requires skills, affordable access, trusted payment systems, data protection, consumer safeguards, cybersecurity, financing and the ability of smaller firms to comply with rules without being priced out.

For policymakers, a practical question is: who is being equipped to use the digital economy, and who is merely being asked to adapt to it? If digital trade rules are designed around the needs of already competitive firms and better-resourced economies, the gap may widen. If they are paired with capacity-building, interoperable standards, regional cooperation and targeted support for smaller firms and women entrepreneurs, digital trade could become a stronger development tool.

The next phase will depend on implementation. The key developments to watch are how countries translate digital trade commitments into domestic law, whether the AfCFTA digital trade agenda produces usable regional rules, and whether support reaches the firms and economies least able to absorb compliance costs. Digital trade can open markets, but only if the rules are built to let more people in.