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Info Service on WTO and Trade Issues (Dec20/12) Geneva, 10 Dec (D. Ravi Kanth) – A consolidated negotiating text on electronic commerce issued by the three coordinators of the non-mandated informal plurilateral Joint Statement Initiative (JSI) group at the WTO is “very damaging” for the interests of developing countries. Even those developing country participants of the JSI group are being reduced by the dominant developed countries to being “rule-takers” and not “rule-makers”, a senior official at the United Nations Conference on Trade and Development (UNCTAD) told the SUNS. On 7 December, the three JSI coordinators – Japan, Australia, and Singapore – issued a restricted 90-page consolidated negotiating text (INF/ECOM/62) allegedly under a somewhat misleading title of “WTO Electronic Commerce Negotiations”, knowing full well that the only WTO electronic commerce negotiations are being held under the mandated, multilateral work programme of 1998. “The title of the text may confuse policymakers in believing that this is going to be an agreement soon in the WTO,” Rashmi Banga, a digital trade policy expert at UNCTAD, told the SUNS. “The consolidated text of the JSI titled “WTO Electronic Commerce Negotiations” may attempt to give the impression that countries are close to an agreement on E-Commerce in the WTO, but this text has no legal standing in the WTO,” she said. Banga said that the “WTO members can negotiate only on the mandated issues and E-Commerce is not a mandated topic for negotiations.” “There is a separate work programme on E-Commerce which was set up in 1998 for discussing the e-commerce related issues, where members freely discuss the development implications of e-commerce rules,” Banga argued. More ominously, “the text itself highlights that several (members) have noted the need to determine the relationship of provisions with Members’ market access commitments, and the legal architecture of the JSI outcome,” the UNCTAD official said. However, the JSI text is replete with fundamental differences as revealed in the heavily bracketed provisions on almost all issues, Banga added. The manner in which the three coordinators structured the consolidated negotiating text appears to be full of tricks, as issues concerning fundamental differences on what would constitute electronic transmissions – i.e. scope and definitions – have been pushed to the end of the text in Annex 1 on page 79. “But the proposals are mostly from developed countries with just a few exceptions like China!”, said Banga, suggesting that it has perverse and damaging implications for developing countries. The seemingly dubious Joint Statement Initiative on e-commerce was first announced at the WTO’s 11th Ministerial Conference (MC11) in Buenos Aires, Argentina, in December 2017 after trade ministers blocked a plurilateral proposal for launching negotiations on e-commerce at the meeting. At that meeting, India, South Africa and a large number of developing countries had said unequivocally that the real negotiations on e-commerce are being held under a multilateral mandate of the 1998 e-commerce work programme. In an attempt to undermine the multilateral mandate on e-commerce based on the 1998 work programme, the US and its allies – Japan, Australia and Singapore – along with other developed countries and some developing countries from South America in the JSI negotiations were forced to issue the initiative, not from the actual meeting hall, but on the margins of the Buenos Aires ministerial meeting. The former WTO director-general Roberto Azevedo played a substantial role in engineering the JSI from his office in the run-up to the Buenos Aires meeting as reported in the SUNS in September 2017. Therefore, to issue the negotiating text as “WTO electronic commerce negotiations” is not only highly misleading but also smacks of a mischievous and utterly false effort, said a trade negotiator, who asked not to be quoted. Also, the timing of the issuance of the negotiating text before the WTO General Council meeting on 16-17 December appears to be an attempt to undermine the South Africa and India initiative to reinvigorate the negotiations under the multilateral 1998 work programme (see SUNS #9250 dated 9 December 2020). UNCTAD’s Banga said that, in the upcoming WTO’s 12th ministerial conference (MC12) in Nur Sultan, Kazakhstan, in June next year, “WTO members need to focus on the mandated issues of the negotiations.” “With respect to E-Commerce, the only mandated issue, as agreed in December 2019, is to arrive at a decision with respect to the Moratorium (on customs duties) on Electronic Transmissions,” Banga said. “Other important issues for the developing countries which are mandated for negotiations include issues in agriculture like domestic support, export restrictions, market access, special safeguard mechanism, public stockholding, export competition, export restrictions, cotton and fisheries,” she said. Banga said that “members should not divert their attention to “new issues” while there remains an unfinished agenda.” “Attention should be paid for delivering on the core issues in the Doha Development Agenda which was promised to the developing countries and which seeks to improve the global market access of developing countries,” the UNCTAD official argued. THE JSI NEGOTIATING TEXT On the JSI negotiating text, the three coordinators said that it “is a working document that captures progress so far in the WTO Joint Statement Initiative on Electronic Commerce.” Although the coordinators said the text “brings together streamlined text based on all text proposals submitted by Members to date and has been prepared under the responsibility of the co-convenors,” the reality is that most of the textual proposals were submitted by the US, the European Union, Canada, Japan, Australia, New Zealand, Brazil, China, Russia, Singapore, and even Indonesia on the issue of the moratorium on customs duties on electronic transmissions. According to the three coordinators, “the draft text reflected in this document is subject to the consideration of several cross-cutting issues that many Members have highlighted in the negotiations, including the following: * Several Members have noted that they would expect security, general and prudential exceptions to apply. * Several have expressed their intention that commitments would not apply to government procurement, or information held by or on behalf of a Party, or measures related to such information, including measures related to its collection. * Some Members have said they want to carve out from scope financial services as defined in the GATS Annex on Financial Services. * Several have noted the need to determine the relationship of the provisions with Members’ market access commitments, and the legal architecture of the JSI outcome.” The coordinators said that the “document has been prepared on a without prejudice basis, and text that is not in square brackets does not indicate agreement to or conclusion of the text.” The negotiating text is divided into six parts, with the first part focusing on “facilitating electronic transactions” that include electronic transaction frameworks, electronic authentication and electronic signatures, electronic contracts, electronic invoicing, and electronic payment services. It also includes proposals on “digital trade facilitation and logistics” covering topics such as paperless trading, de minimis, customs procedures, improvements to trade policies, single window data exchange and system interoperability, logistics services, enhanced trade facilitation, use of technology for the release and clearance of goods, and provision of Trade Facilitating and Supportive services. In the second part concerning “openness and electronic commerce”, the topics include (i) non-discriminatory treatment and liability (non-discriminatory treatment of digital products, and interactive computer services); (ii) flow of information focusing on such highly divisive issues in square brackets such as cross-border transfer of information by electronic means/cross-border data flows, location of computing facilities (retaining data in local servers or Cloud Computing), bracketed provisions relating to financial information/location of financial computing facilities for covered financial suppliers (a US proposal), customs duties on electronic transmissions, and access to internet and data among others. The third part of the JSI text on “trust and electronic commerce” include items such as consumer protection, online consumer protection, spam, privacy issues such as personal information protection and personal data protection, business trust, the highly controversial issue of sharing source code, and ICT products that use cryptography. The fourth part covers “cross-cutting issues” such as transparency, domestic regulation and cooperation, cybersecurity, and capacity building. The fifth part on “telecommunications”, which is largely based on the EU proposals, focuses on updating the WTO reference paper on telecommunication services. The sixth part focuses on “market access” issues, which is also based on the EU proposals, with an attached annex on scope and general provisions and so on. In short, the negotiating text indicates iron-clad provisions largely aimed at protecting and enhancing the interests of Google, Amazon, Facebook, Apple, Microsoft, Alibaba, and Tencent among others, said several negotiators, who preferred not to be identified.
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