Digital trade relies on technical standards. As information technologies advance, international digital standards make the technologies used in trade – or ‘tradetech’ – more interoperable, scalable, and secure. 

A wide range of tradetech use cases depend on digital standards, including those for document formats, electronic signatures, digital identity, and cybersecurity. They also encompass system specifications for cross-border payments, electronic transferable records (ETRs), transportation/logistics, trade facilitation, and financial compliance. 

Most digital standards are voluntary and are produced by international Standards Development Organisations (SDOs) alongside a growing number of industry-led consortia.

The building blocks of digital trade: Insights from the new IISD report

To better understand the standard-setting processes that underpin digital trade, the International Institute for Sustainable Development (IISD) published the third report in its Building Blocks of Digital Trade Regulation series in November 2025. 

The report, co-authored by Craig Atkinson and Hanane Becha, concludes that the global digital standardisation ecosystem is trade-enabling and supportive of cross-border digital integration. At the same time, the analyses identify a critical, often-overlooked challenge: the barriers to participation faced by developing-country stakeholders in digital standardisation are not merely technological constraints but also human, institutional, and organisational limitations. These obstacles shape who participates, whose perspectives are embedded in standards, and ultimately who benefits from digital trade.

‘Tradetech futures’ – Digital standards as trade enablers, or barriers

Digital standards offer practical guidelines and rules for conducting cross-border business with technology. When stakeholders from developing countries are absent from international standard-setting processes, these standards risk reflecting assumptions that do not align with local realities.

The IISD report emphasises the point that digital standards should not be viewed solely as technical artefacts – they are socio-technical in nature and embed assumptions about language, infrastructure, bandwidth, trust, governance, and institutional capacity. Standard-setting is, therefore, fundamentally about people and organisations: who participates, who shapes norms early on, and who ultimately bears the cost of exclusion.

Table 1. Examples of international technical standards that enable digital trade

When standards are developed without broad participation, technology providers and solution developers are forced to adapt continuously, increasing costs and limiting scalability. Such exclusionary tradetech futures will affect businesses of all sizes and constrain economic development at local, regional, and global levels.

The cost of non-participation for developing countries

Limits to participation in digital standardisation may include travel costs, resource constraints, and limited technical capacity. The consequences are tangible: higher compliance costs, missed innovation opportunities, and a growing standardisation gap that risks excluding entire economies from digital trade.

Late participation further compounds these challenges. Stakeholders that engage only after standards are finalised often struggle to retrofit domestic systems to meet specifications that were never designed with their contexts in mind.

The “Three Digital Kingdoms” and the rise of the “Digital Deciders”

The IISD report also underscores that global standardisation is not a ‘neutral’ process. Major economic powers like China, the European Union, and the United States, which Singapore Management University’s Henry Gao refers to as the ‘Three Digital Kingdoms’, promote distinct visions of digital governance:

• China emphasises security and state control, seeking influence through formal SDO engagement.
• The European Union prioritises regulatory alignment, rights-based frameworks, and compatibility through harmonised rules and adequacy decisions (e.g., on data flows).
• The United States advances a market-driven, industry-led, and innovation-focused approach, favouring multistakeholder and private-sector consortia.

Aligning with one of these ecosystems can determine whether businesses can integrate into global supply chains or adopt emerging digital services. Yet, a strategic shift is underway. By sheer numbers, as described by Robert Morgus, Jocelyn Woolbright, and Justin Sherman, developing country stakeholders have become digital deciders: swing voters that can influence the outcomes in international standard-setting processes.

Industry associations also play a pivotal role in this landscape. Initiatives such as the ICC Digital Standards Initiative (DSI), based in Singapore, actively promote the adoption of existing standards with a strong emphasis on inclusion. While not an SDO itself, the DSI works closely with standards bodies, governments, industry players, regional economic communities (RECs), and international organisations to improve awareness and coordinated adoption of digital standards for trade.

Bridging the standardisation gap: From standards-takers to standards-makers

To avoid remaining passive standards-takers, developing country stakeholders can pursue several strategic pathways for inclusive standards-setting:

• Targeted participation in inclusive SDOs that operate on principles of transparency, openness, and consensus.
• Engagement in Open Development Processes (ODPs), which provide accessible consensus-based models for standards creation.
• Regional alliances amplify influence and align standardisation efforts with shared economic priorities.
• Capacity-building partnerships that include participation in dedicated programs and donor-supported initiatives to strengthen technical expertise and institutional presence.

In the global digital economy, strategic engagement in standards-setting can shift the balance from the costs of compliance to the benefits of influence. As the IISD report highlights, digital standards are not merely technical specifications. Inclusive participation today will determine more equitable tradetech futures.

As digital standards increasingly shape who participates in global trade and on what terms, these questions sit at the heart of the fault lines redefining cross-border finance  explore more in Trade Treasury Payments Issue 04, Fault Lines, here.