TWN Info Service on WTO and Trade Issues (Nov19/18)
27 November 2019
Third World Network

Pluri-talks on e-commerce takes up controversial issues
Published in SUNS #9024 dated 21 November 2019

Geneva, 20 Nov (D. Ravi Kanth) -  Participants in the proposed plurilateral agreement on "WTO electronic commerce" have begun discussions on controversial issues such as "source code" that could worsen the existing "asymmetries" and "lawlessness" in the global information order, trade envoys told the SUNS.

The top five American companies - such as Google, Facebook, Microsoft, Amazon, and IBM among others - as well as leading Chinese technology companies, control the global information order through their possession of AI (artificial intelligence), computing power and capital, said a trade envoy, who asked not to be quoted.

Ahead of the week-long discussions that began on Tuesday (19 November) at the World Trade Organization, the facilitators for the Joint Statement Initiative (JSI) group on e-commerce - Japan, Singapore, and Australia - circulated "streamlined working texts" on "trade-related aspects of electronic commerce."

The restricted 16-pages of streamlined texts, seen by the SUNS, cover "customs duties," "access to internet and data", "Business Trust", and "capacity-building and legal issues."

Four focus groups will discuss the four sets of proposals during four days of discussions from Tuesday to Friday.

During the discussions that will end on Friday, the United States and its partners in the failed Trans-Pacific Partnership (TPP) agreement proposed language on a range of issues from customs duties to source code.

Even though there is no clarity on what would constitute electronic transmissions among the JSI members, the US has proposed that "customs duty" includes a duty or charge of any kind imposed on or in connection with the importation of a good, any surtax or surcharge imposed in connection with such importation, but does not include any:

(a) Charge equivalent to an internal tax imposed consistently with Article III:2 (national treatment) of GATT 1994;

(b) Fee or other charge in connection with the importation commensurate with the costs of services rendered;

(c) Anti-dumping or countervailing duties.

Canada has proposed that "digital product" means a computer program, text, video, image, sound recording, or other product that is digitally encoded, produced for commercial sale or distribution, and that can be transmitted electronically.

In sharp contrast, the US, Japan, Brazil and Korea have proposed that "electronic transmission" or "transmitted electronically" means "a transmission made using any electromagnetic means [including by photonic means/ including transmissions by optical means]".

Effectively, the JSI participants are radically shifting the goalposts on electronic transmissions, said a participant, who asked not to be quoted.

The US along with Japan, Singapore, Hong Kong-China, Brazil, Korea, and New Zealand, have proposed that "No [Party/Member] shall impose customs duties on electronic transmissions [including content transmitted electronically,] between a person of one [party/member] and a person of another [party/member].

However, the European Union has proposed that "No [party/member] shall impose customs duties, [fees or other charges] on electronic transmissions [which include the transmitted content]," while Canada has proposed that "no [party/member] shall impose customs duties, fees or other charges on a digital product transmitted electronically."

As regards "open government data," the US has proposed that "government information" means non-proprietary information, including data, held by the central government.

Further, the US along with Japan has suggested that "to the extent a [Party/Member] chooses to make government [information, including] data, available to the public, it shall endeavour to ensure that the [information/data] is [in a machine-readable and open format and can be searched, retrieved, used, reused and redistributed/provided in a searchable and readable form]."

Surprisingly, the US has not proposed any language on "Open internet access" on which Japan, Korea, and Brazil among others have made several proposals in square brackets.

Brazil, for example, has proposed that, "The internet should remain free and open for all legitimate commercial and development purposes, including by allowing increased access to information, knowledge and new technologies."

Brazil, which has been hitherto the coordinator of the G20 coalition of developing countries on agriculture, has submitted language in square brackets on competition.

Brazil has proposed that "[Parties/Members] recognise that some characteristics of digital trade, such as platform-based business models, multi-sided markets, network effects and economies of scale, may pose additional challenges on competition policy. Accordingly, [Parties/Members] shall endeavour to: (a) develop adequate approaches to promoting and protecting competition in digital market."

Brasilia also called for "strengthen[ing] collaboration mechanisms for cooperating to identify and mitigate market distortions arising from abuses of market dominance."

On source code, which includes complex algorithms that propel machine intelligence in which Google, Facebook, Amazon, and Microsoft among others dominate the global information order, the US has proposed that "no [party/member] shall require the transfer of, or access to, source code of software owned by a person of another [party/member], [to an algorithm expressed in that source code] as a condition for the import, distribution, sales, or use of that software, or of products containing that software, in its territory."

Further, the US along with Canada has proposed that "this Article [on source code] does not preclude a regulatory body or judicial authority of a [Party/Member] from requiring a person of another [Party/Member] to preserve and make available the source code of software, or an algorithm expressed in that source code, [to the regulatory body] for a specific investigation, inspection, examination, enforcement action, or judicial proceeding subject to safeguards against unauthorised disclosure."

The US and Canada also argued that "such disclosure shall not be construed to negatively affect the software source code's status as a trade secret, if such status is claimed by the trade secret owner."

Previously, during the JSI group discussions, Russia and China had suggested that they would need to have access to source code for security purposes.

China, however, proposed language on "capacity building and legal issues". Under "options for capacity building and technical assistance", China proposed the following: "Electronic Commerce for Development Program: [Parties/Members] should explore the way to establish an Electronic Commerce for Development Program under the WTO framework to encourage, manage and coordinate the contributions that [Parties/Members] voluntarily provide, with the aim of assisting developing [Parties/Members], especially LDCs to improve development of electronic commerce and implement WTO rules on electronic commerce."

At a time when there is growing concern all over the world about the so-called dark operations of Google, Facebook, and Amazon among others "which rose to dominance in the US under conditions of relative lawlessness", according to the Harvard academic Shoshana Zuboff, the US is attempting to legalize the lawlessness in international trade rules through the plurilateral agreement.

"The plurilateral agreement is largely dictated and decided by the US, which wants to create rules that would perpetuate asymmetries and lawlessness to help its tech-giants," said a trade envoy, who asked not to be quoted.