The World Trade Organization plays a significant role in regulating international trade, but it risks falling behind the fast-moving digital economy, a World Economic Forum official said on Thursday.
The WTO, which oversees around 60 trade agreements between 164 member states, needs to update regulations for digital trading services, a rapidly growing sector of the world economy, the WEF's head of digital trade, Ziyang Fan, said.
"That's a perfect example," he said, of where regulatory frameworks are failing to keep step with the speed of technological advancement.
"We're (in) 2018, so absolutely, there's a big lag," said Fan, whose expertise covers e-commerce, cross-border data flows and the sharing economy.
Digital trade — or the digital sale of goods and services — has grown rapidly over recent years as the advent of new technologies has made it easier for businesses to serve consumers on an international scale.
Today it accounts for 12 percent of international trade. Fan said that growth is only set to gain pace over the coming decade.
That will be fueled by the sale of goods and, increasingly, the transfer of services, Fan said. He cited companies like VIPKid, an online tutoring platform, which are revolutionizing the education sector. The same can be said for disruptors in the hospitality, professional services and even healthcare industries, he noted.
"I do see the trend of digital trading services as a major driver for the next wave of globalization," said Fan.