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TWN
Info Service on WTO and Trade Issues (Sept21/12) Washington DC, 14 Sep (D. Ravi Kanth) – The three convenors of the Joint Statement Initiative (JSI) group on electronic commerce – Japan, Australia and Singapore – have presented a second revised consolidated draft text that includes new proposals that will impose more onerous commitments on developing countries, said analysts. During a plenary meeting on 13 September, the convenors presented the 92-page consolidated draft text, claiming that there is progress in some limited areas such as rules on spam, electronic authentication and consumer protection among others. The convenors hope to conclude an agreement in some ten areas at the WTO’s 12th ministerial conference (MC12) to be held in Geneva from 29 November. However, the JSI members remain far apart on the most important issues such as data flows and data localization, data privacy, market access, customs duties, cyber security, and trade facilitation, said people familiar with the consolidated draft text. There are a host of other areas where progress may take several years from now, said a JSI participant, suggesting that the progress is only in areas that are less difficult. The draft text contains six sections: (1) enabling electronic commerce; (2) openness and electronic commerce; (3) trust and electronic commerce; (4) cross-cutting issues; (5) telecommunications; and (6) market access. The second section includes highly controversial areas where there have been no progress so far. The areas include: (a) non-discrimination and liability; (b) flow of information such as cross-border data flows, location of computing facilities, location of financial computing facilities for covered financial service suppliers, customs duties on electronic transmissions, access to internet and data. The fifth section on telecommunications contains rules that have largely been proposed by the European Union, Norway, the United Kingdom, Uruguay and China (on network equipment and products). In the sixth area of market access, there appears to be a battle being waged between three countries, namely the United States, the European Union, and China. PLENARY MEETING ON 13 SEPTEMBER At the plenary meeting on 13 September, the developing countries – Nigeria, Cote d’Ivoire, China, Indonesia, Ecuador, and Guatemala raised their concerns over capacity-building and technical assistance. Nigeria said what developing countries have in terms of their core interests in the consolidated draft text are not enough, suggesting that they want binding commitments and not best endeavour provisions. On capacity-building, Indonesia, China, and Cote d’Ivoire proposed the following bracketed textual language: 1. Upon request of a developing [Party/Member] or LDC, developed and developing [Parties/Members] [in a position/with the capacity] to do so shall provide targeted technical assistance and capacity [and skill] building on mutually agreed terms and conditions to developing [Parties/Members], in particular [low-income developing countries and] LDCs, in [order to improve their digital ecosystems and to allow them to develop/improving, promoting, and protecting the development of] electronic commerce [to allow them to/and] implement WTO rules on electronic commerce. 2. 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 [those of low income and] LDCs [to improve development of electronic commerce and implement WTO rules on electronic commerce]. [This Program shall constitute a framework for consultation between [Parties/Members] and between [Parties/Members] and the international agencies and organizations concerned.] 3. [Alt 1: Bridge the Digital Divide: Members are encouraged to adopt recommendations and practical measures that contribute to improving the electronic commerce infrastructure and technical conditions of developing Members, to help enterprises and citizens realize digital transition.] [Alt 2: Developed and developing [Parties/Members] with the capacity to do so undertake to adopt practical measures that contribute to bridging the digital divide and improving the infrastructure and technical conditions of developing [Parties/Members], so as to help their micro, small and medium sized enterprises and their citizens realize digital transition and participate in electronic commerce and the digital economy.] 4. Research, Training and Communication: Members are encouraged to conduct information exchange, joint study and cooperative training, share best practices of electronic commerce development [and facilitation] and implement capacity building among Members and international organizations, to promote the common [and inclusive] development of electronic commerce. US APPEARS ISOLATED At the meeting, the US said that while it agrees with the need for capacity-building, it is important to frame the rules first following which the issue of capacity-building will be decided. Significantly, the US appears to be finding it difficult to advance it’s core interests on data flows and data localization, as more countries are now veering toward the EU’s General Data Protection Regulation (GDPR) of 2016 that stipulates data protection and privacy policies in the EU member countries. Although China remained silent on the discussion on data protection and privacy, Beijing seems to be preferring the GDPR proposed by the EU, said a JSI participant, who asked not to be identified. The JSI members appear not to be on the same page on the scope of electronic commerce, and the definitions, which are being pushed into the annexes at the end of the text. At the JSI plenary meeting, the three coordinators – Japan, Australia, and Singapore – were expected to drive home the message that there has been significant progress on about ten or 12 issues, which, by normal standards of a highly ambitious agreement, seem like inconsequential issues, said people familiar with the JSI discussion. In the introduction to the updated text, seen by the SUNS, the three coordinators claimed that the “Consolidated Negotiating Text (CNT) is a working document that captures progress so far in the WTO Joint Statement Initiative on Electronic Commerce.” The text, according to the coordinators, “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 text, which incorporates outcomes of small group discussions, suggests that “for transparency, a box has been included under most provisions to indicate which Members’ proposals the text is based on.” For the purposes of this document, proposed definitions have generally been placed with the provisions to which they relate. Some proposed cross-cutting definitions have been included in Annex 1, it said. The coordinators said that “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.” The issues include 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 provisions with Members’ market access commitments, and the legal architecture of the JSI outcome. CROSS-CUTTING ISSUES As regards the consolidated draft text, the low hanging fruits appear to be spam, electronic signature and authentication, consumer protection, and open government data, said people familiar with the negotiations. The text includes several revised sections on source code, which is one of the controversial areas, with Nigeria having submitted a waiver for developing countries to access source code for developing their digital sector; open internet access; and new updates on paperless trade. But there is no agreement on any of the above revised sections. Also, there are revisions with a single text on competition, while there is revised language in several parts, said people, who asked not to be quoted. Commenting on the main areas which are replete with unbridgeable differences at this juncture, the JSI participants pointed to data flows and data localization, market access, customs duties, cyber security, and trade facilitation among others, said participants familiar with the discussions. The textual proposals on data flows and data localization, as set out in pages 26 and 29 of the draft text, are based on the members of the former TPP (Trans-Pacific Partnership) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the European Union among others. The textual proposals on data flows and data localization remain in square brackets. Besides, many issues proposed by the US such as interactive computer services (infringement), non-discrimination and liability, interactive services (limiting liability) and so on remain in square brackets. On market access, the US, the EU, China, and Canada have made seemingly diverse and conflicting proposals. The section on market access includes: (1) services market access; (2) temporary entry and sojourn of electronic commerce related personnel; and (3) goods market access. The services market access includes business services, communications services, telecommunication services, distribution services, financial services, transport services, and maritime business services, with the demandeurs being the US, the EU, and China among others. The area of temporary entry and sojourn of electronic commerce related personnel has been proposed by China. Meanwhile, Canada, the EU, and the US circulated their proposals on goods market access. China’s list of market access areas include logistics, infrastructure, transport and movement of personnel. While they may not be related to digital trade, China has insisted that they have an intrinsic link with digital trade rules. PROPOSALS REMAIN INIMICAL TO DEVELOPING COUNTRIES Commenting on the second revised consolidated draft text, a Geneva-based electronic commerce analyst said “it contains proposals on enhanced trade facilitation which will pressurize developing countries to implement specific provisions of the Trade Facilitation Agreement at the earliest possible.” According to the analyst, “members will also have to make specific commitments for higher liberalization in identified services sectors.” “Also, further liberalization in goods market access is being sought, which will be GATT plus,” the analyst said. “Developing countries that are part of this agreement will definitely lose policy space as well as regulatory space for which they have fought so long in the WTO,” the analyst warned
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