Research on the Adjustment of International Digital Trade Rules

Under the Background of Global Supply Chain Restructuring

Yinan Jiang

School of International Law, China University of Political Science and Law, Beijing, China

Keywords: Global Supply Chain Restructuring, International Digital Trade Rules, Cross-Border Data Flow, Rule

Fragmentation, Chinese Practice.

Abstract: In recent years, the COVID-19 pandemic, geopolitical conflicts, and technological changes have driven global

supply chains to prioritize safety and resilience over efficiency. This paper focuses on the interactive

relationship between the restructuring of global supply chains and adjustments in digital trade rules, exploring

how rule lag constrains and optimizes the digital transformation of supply chains. By integrating perspectives

from technology, geo-politics, and institutions to construct an "rules-resilience-innovation" analytical

framework, this study combines literature analysis, policy text comparisons, and case studies (such as China's

"Silk Trade Chain Agreement," CPTPP provisions, and the EU's Digital Services Act) to find that current

rules exhibit significant divergence and fragmentation in areas such as cross-border data flow, digital taxation,

and market access. The study proposes pathways such as multilateral coordination, regional cooperation, and

technical interoperability to build a resilient rule framework, thereby facilitating the coordinated development

of global supply chains and digital trade.

1 INTRODUCTION

In recent years, the accelerated restructuring of global

supply chains has been driven by multiple factors

including the COVID-19 pandemic, geopolitical

conflicts, and technological transformations. These

forces have shifted supply chain priorities from

traditional efficiency-first approaches to emphasizing

security and resilience. Against this backdrop, the

widespread application of digital technologies has

catalyzed explosive growth in digital trade, with

emerging formats like cross-border e-commerce and

cross-border data flows fundamentally reshaping

international trade patterns. However, the global

digital trade rule system lags behind practical

developments, exhibiting issues such as a lack of

basic consensus, non-justiciability, and prominent

disputes over core issues. Critical challenges

including regulatory divergences in cross-border data

flows, disagreements over digital tax imposition, the

tension between intellectual property protection and

market access, and the complex multilateral legal

environment governing data flows have emerged as

key bottlenecks constraining the digital

transformation of global supply chains.

This study focuses on the interaction between

global supply chain restructuring and digital trade

rule adjustments, particularly examining new

international rule requirements arising from supply

chain digital transformation. Key areas of

investigation include cross-border data flow

regulations, technical standard interoperability, and

digital tax coordination mechanisms. The research

reveals fundamental contradictions within existing

rule systems regarding compatibility, fairness, and

security, manifested through cross-border data

sovereignty disputes, developing countries' lack of

rule-making influence, and conflicts in digital service

supervision. Through analyzing China's practical

approaches-such as exporting technical standards via

the Trusted Trade Chain Protocol, domestic Single

Window customs reforms, and participation in

regional agreements like DEPA - this study explores

feasible solutions for optimizing international digital

trade rules while balancing security and openness.

For theoretical research methods, given the

interdisciplinary complexity (technological, legal,

economic) of digital trade rules, core contradictions

are distilled through literature analysis and logical

deduction. Specifically, a Rules-Resilience-

Innovation framework is employed to compare

domestic and international policy texts with academic

518

Jiang, Y.

Research on the Adjustment of International Digital Trade Rules Under the Background of Global Supply Chain Restructuring.

DOI: 10.5220/0014389000004859

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Politics, Law, and Social Science (ICPLSS 2025), pages 518-522

ISBN: 978-989-758-785-6

perspectives, analyzing regulatory divergences and

integration pathways.

The case analysis method focuses on three

representative cases to validate theoretical

hypotheses. Examining the alignment between

China's Trusted Trade Chain Protocol and the EU's

Trade Trust framework, demonstrating how

blockchain technology enhances trade efficiency

through document digitization ； Investigating the

impact of CPTPP Article 14.11 on Southeast Asian

supply chains, revealing the conflict between cross-

border data flow requirements and inadequate

infrastructure in Vietnam and Malaysia；Assessing

the extraterritorial effects of the EU's Digital Services

Act, analyzing how Amazon and Alibaba's

restructuring of European logistics networks reflects

dual impacts of regulatory expansion on supply chain

costs and resilience.

Literature review methodology permeates the

entire research process, systematically organizing

domestic and international academic achievements

regarding supply chain security, technology-driven

innovations, and China's practical experiences to

identify theoretical gaps.

2 LITERATURE REVIEW

The academic community has explored the

interactive relationship between global supply chain

restructuring and digital trade rules from multiple

dimensions. In terms of supply chain security and rule

fragmentation, scholars generally focus on how the

short chain and regional trends in global supply

chains impact the rule system. For instance, some

scholars have pointed out that significant differences

in digital trade rules, particularly in cross-border data

flow and digital taxation, exacerbate rule

fragmentation. Developed countries tend to

emphasize market openness, while developing

countries place greater importance on balancing

development rights with data sovereignty. This

difference in stance makes multilateral rule

coordination more challenging (Chen, 2022) Another

scholar found through analyzing regional agreements

such as the CPTPP and USMCA that there are

significant differences in cross-border data flow and

localization clauses. Developed countries prefer to

promote market openness through rules, whereas

developing countries emphasize the balance between

data sovereignty and development rights. This

difference in stance increases the difficulty of

multilateral coordination (Meltzer, 2021).

Furthermore, some scholars have noted that while

the CPTPP requires member states to allow free data

flow, Southeast Asian countries face high compliance

costs due to weak digital infrastructure, such as the

cost of transforming small and medium-sized

enterprises in Vietnam, which accounts for 8% of

their revenue, highlighting the lack of transitional

mechanisms and technical assistance in rule design

(Baldwin, 2023). Such research reveals that while

regional agreements enhance supply chain resilience,

they may also intensify the fragmentation of the rule

system and marginalize developing countries. In

terms of technology-driven and rule-adaptive aspects,

relevant scholars emphasize that technologies such as

blockchain and artificial intelligence have reshaped

trade processes, but the existing rule system struggles

to meet the demands of emerging business models

(Zhang, 2022). Taking the General Agreement on

Trade in Services (GATS) as an example, its

framework fails to effectively cover new areas like

digital services and smart contracts, highlighting the

lag in rules.

Other scholars argue that while technologies like

blockchain and artificial intelligence have reshaped

trade processes, existing rules (such as GATS)

struggle to encompass new business models like

digital services and smart contracts, leading to legal

vacuums and regulatory conflicts (Wu & Li, 2022).

For instance, studies on China's "Trust Trade Chain

Agreement" point out that although blockchain

technology has improved the efficiency of cross-

border trade documents, issues regarding

compatibility with the EU Trade Trust framework in

data privacy standards and the legal validity of smart

contracts remain unresolved (Zeng & Stevens, 2022).

Such research indicates that the interoperability of

technical standards and rules is a critical bottleneck

for the digital transformation of supply chains,

urgently requiring international coordination to

bridge these gaps. In addition, research by scholars on

China's practices and rule discourse indicates that

China has provided a model for SMEs to build

resilient supply chains through measures such as the

digitalization of market procurement trade and

logistics integration via the China-Europe Railway

Express. However, the discourse on rules still needs

improvement.

Relevant scholars acknowledge that the "Xinmao

Chain Agreement" enhances international influence

through the export of technical standards but point out

that it does not clarify data ownership rules, creating

compatibility barriers with the EU framework (Zeng

& Stevens, 2022). Scholars such as Baldwin (2023)

emphasize that China has attempted to enhance its

rule-making voice by participating in regional

Research on the Adjustment of International Digital Trade Rules Under the Background of Global Supply Chain Restructuring

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agreements like DEPA and RCEP. However,

developing countries still face issues of lacking a

voice in digital tax negotiations (Avi-Yonah, 2021)

and technology standards negotiations (Baldwin,

2023). Overall, existing research often focuses on a

single dimension (technology, policy, or case

studies), lacking in-depth exploration of the

systematic relationship between supply chain

restructuring and rule evolution. This provides

theoretical space for integrating multiple perspectives

in this study.

3 SUPPLY CHAIN

RESTRUCTURING AND

DIGITAL TRADE RULES

Geopolitics and security priorities are reshaping the

supply chain landscape, with global supply chains

transitioning from efficiency first to security and

resilience. The COVID-19 pandemic and the Russia-

Ukraine conflict have accelerated this process. For

instance, the United States has shifted part of Apple's

production capacity to India and Vietnam through its

nearshoring strategy, while the European Union has

promoted the localization of semiconductor supply

chains through the Chips and Science Act. This

restructuring has given rise to new rule requirements,

such as data localization and intelligent regulation of

cross-border transportation.

According to World Trade Organization (WTO)

data, global trade in digitally deliverable services

reached $4.1 trillion in 2022, accounting for 57.1% of

total service trade, highlighting the importance of

data flow rules. Regional agreements, like the

Regional Comprehensive Economic Partnership

(RCEP), which includes a dedicated chapter on e-

commerce, explicitly outlines electronic

authentication and data flow rules, responding to the

trend of supply chain regionalization. Digital

technology penetration has spurred new demands for

rules. Technologies such as the Internet of Things and

blockchain are driving the intelligent transformation

of supply chains, yet they also expose gaps in existing

regulations. For instance, OECD research indicates

that there is a regulatory gap of over 20% in areas like

data classification and intellectual property

protection. China has reduced customs clearance

times in the Yangtze River Delta region by 70%

through the "Xinmao Chain" blockchain protocol,

while Europe and America reject mutual recognition

of these standards due to "differences in technological

values," leading to a 15% increase in global digital

trade costs.

The application of digital technology has also

given rise to new models such as cloud outsourcing

and crowdsourcing, shifting the R&D process from

closed to open collaboration. There is an urgent need

for international rules to address new issues like

mutual recognition of technical standards and the

definition of data sovereignty. Developing countries

face an intensified struggle for rule-making authority,

with developed countries dominating the process.

Developing countries find themselves in a "rule-

taker" dilemma. The United States emphasizes data

free flow through the US-Mexico-Canada Agreement

(USMCA), while the European Union's General Data

Protection Regulation (GDPR) upholds strict data

sovereignty, leading to a deadlock in 80% of cross-

border data flow agreements. African countries'

claims for special treatment in WTO e-commerce

negotiations have not been fully adopted, whereas

China has secured space for rule experimentation by

participating in the Digital Economy Partnership

Agreement (DEPA), facilitating cross-border data

flows through "sandbox regulation." The

contradiction of supply chain transformation caused

by the lagging rules of digital trade Cross-border data

flow regulations conflict, with data sovereignty

disputes becoming the core issue. China's Data

Security Law implements classified and graded

management, piloting a whitelist system in the

Hainan Free Trade Port, while DEPA advocates for a

"data flow trust mechanism." This disparity leads to

multinational corporations losing approximately $12

billion annually due to compliance issues (Azmeh et

al.,2020).

The EU's Digital Services Act (DSA) imposes

greater responsibility on platforms, opposing the U.S.

's principle of free flow, further exacerbating supply

chain coordination barriers; the digital tax collection

mechanism is imbalanced. The OECD's "global

minimum corporate tax" proposal fails to address the

distribution of taxing rights. France's imposition of a

3% digital tax on Google sparked a Section 301

investigation by the U.S., leading to a 350% increase

in related disputes over five years. Developing

countries suffer severe tax revenue losses, and the

United Nations Conference on Trade and

Development (UNCTAD).

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

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4 THE PATH SELECTION OF

RULE INNOVATION, SUPPLY

CHAIN RESILIENCE

IMPROVEMENT AND RULE

ADJUSTMENT

4.1 Pathways for Enhancing Supply

Chain Resilience

Taking Beijing Airport’s "Single Window + Trusted

Trade Chain" model as an example, China has

achieved end-to-end digitization and transparency in

trade processes through its domestically developed

blockchain infrastructure, Chang’an Chain. This

model employs Distributed Ledger Technology

(DLT) to upload real-time data from cargo

declaration, customs clearance, and tax verification

onto the blockchain, ensuring the immutability of

electronic signatures and logistics documents (Zeng

& Stevens, 2022). For instance, smart contracts

automatically verify certificates of origin, reducing

manual review time from three days to 30 minutes

and improving clearance efficiency by 40%.

Furthermore, Chang’an Chain’s compatibility with

the ISO 20022 international messaging standard

enables technical interoperability with the EU’s

Trade Trust framework. However, practical

implementation still faces conflicts in data privacy

standards (e.g., GDPR requires anonymization by

deleting IP addresses, while Chinese regulations

permit partial retention for risk control analysis),

leading to additional compliance reviews for 30% of

cross-border orders (Chander & Lê, 2020).

In terms of technological breakthroughs, AI-

driven risk assessment models integrate historical

trade data and real-time logistics information to

construct dynamic risk profiles. For example, in the

context of Yiwu’s small commodity exports, a

random forest algorithm identifies abnormal

transaction patterns (e.g., high-frequency, low-value

orders) with a false positive rate below 5%

(UNCTAD, 2024). Meanwhile, the multi-CBDC

bridge (mBridge) project enables real-time cross-

border payment settlements through a multilateral

central bank digital currency (CBDC) network. For

China-Europe Railway Express shipments, payments

are directly exchanged between digital yuan and

euros upon cargo departure, reducing settlement time

from 2–3 days under the SWIFT system to 10 minutes

and cutting exchange rate volatility risks by 70% (Wu

& Li, 2022). These technological practices not only

support CPTPP’s vision of free data flows but also

offer low-cost solutions for developing countries to

participate in digital trade.

Regarding international cooperation, China

actively explores balanced rule-making pathways

through participation in DEPA (Digital Economy

Partnership Agreement) and RCEP (Regional

Comprehensive Economic Partnership Agreement).

DEPA’s modular mechanism allows member states to

selectively adopt clauses (e.g., exceptions for cross-

border data flows), providing developing countries

with flexible "gradual compliance" options (Baldwin,

2023). For example, Vietnam invoked CPTPP’s

"digital infrastructure assistance clause" to secure a

five-year transition period for upgrading its data

centers, easing corporate compliance burdens (Avi-

Yonah, 2021). Nevertheless, fragmentation in

regional agreements continues to hinder global

harmonization. In the case of the Belt and Road

digital cooperation initiative, China and ASEAN

countries jointly formulated the Cross-Border Data

Classification and Grading Guidelines, unifying

definitions of sensitive data (e.g., biometric

information as the highest level), which reduced

compliance costs for SMEs by 25%.

4.2 Pathways for Global Supply Chain

Restructuring

Differentiated Transition Arrangements are critical to

balancing rule uniformity with developmental

inclusivity. Following CPTPP precedents, developing

countries can establish 5–7-year transition periods in

areas like data localization and cross-border data

flows, supported by technical assistance mechanisms

to ease compliance pressures. For instance, the EU’s

Digital Europe Program allocated €2 billion to

African nations for data center construction and

cybersecurity systems, facilitating gradual alignment

with GDPR standards. Similarly, Vietnam invoked

transition clauses upon joining CPTPP to postpone

data localization requirements until 2028, granting

SMEs a technological adaptation window (Avi-

Yonah, 2021). Such arrangements respect developing

countries’ practical needs while fostering incremental

rule convergence.

Technology-Enabled Rule Enforcement focuses

on leveraging blockchain smart contracts to automate

and enhance transparency in rule implementation.

Under the RCEP framework, enterprises can upload

key documents (e.g., certificates of origin, logistics

records) to blockchain platforms, where smart

contracts automatically verify data authenticity and

trigger tariff reductions. For example, Chinese

electronics exporter shipping goods to Southeast Asia

Research on the Adjustment of International Digital Trade Rules Under the Background of Global Supply Chain Restructuring

521

received a 5% import tariff reduction within 10

minutes after blockchain validation of its origin

certificate, achieving an 80% efficiency gain over

manual processes (Zeng & Stevens, 2022). This

approach minimizes corruption risks from human

intervention and deters trade fraud through data

immutability.

Multilateral Coordination Mechanism Innovation

aims to resolve data sovereignty disputes and rule

fragmentation. A proposed "Digital Dispute

Prevention Panel" within WTO e-commerce

negotiations could adopt ICSID’s rapid arbitration

model, requiring disputing parties to submit technical

evidence (e.g., data flow logs, privacy protocols)

within 90 days. Independent expert panels would then

issue non-binding recommendations based on

technology-neutral principles. For example, in

conflicts between the EU’s Digital Services Act and

ASEAN data localization policies, the panel might

propose a "tiered data classification" compromise—

localizing only core personal data while permitting

cross-border flows for other categories (Meltzer,

2021). Such mechanisms mitigate rule conflicts’

impacts on global supply chains through procedural

efficiency and technical rationality, laying the

groundwork for multilateral consensus.

5 CONCLUSION

This study systematically explores the interactive

relationship between global supply chain

restructuring and digital trade rule adjustments

through literature analysis, case studies, and

theoretical framework construction. The research

finds that the digital transformation of supply chains

has given rise to new rule demands such as cross-

border data flow, digital tax coordination, and market

access. However, the existing system exhibits

significant lag and fragmentation, specifically

manifested in intensified data sovereignty disputes,

high compliance costs for developing countries, and

insufficient interoperability of technical standards.

China, through the "single window + trade chain"

model, application of blockchain technology, and

participation in regional agreements, is gradually

becoming a "bridge" for rule integration, but still

needs to balance the tension between security and

openness. Looking ahead, it is recommended to

promote rule optimization from three aspects. First,

establish a flexible rule framework that allows for

differentiated transitional arrangements and leverages

blockchain smart contracts to automatically enforce

compliance clauses. Second, enhance technological

empowerment by using digital currency bridges and

AI risk control models to reduce cross-border

payment and regulatory costs. Third, deepen

multilateral coordination mechanisms, such as

establishing a digital dispute prevention panel in

WTO e-commerce negotiations to bridge the gap

between data sovereignty and trade liberalization.

Only through collaborative innovation in technology,

institutions, and cooperation can we achieve both the

goal of enhancing global supply chain resilience and

the sustainable development of digital trade.

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