sbaker@steptoe.com
December 1997
Attached below is a joint statement on electronic commerce signed earlier this month during a summit between President Clinton and leaders of the European Union. The statement sets out general principles focusing on facilitating the market-driven development of electronic commerce. For example, one principle states that "taxes on electronic commerce should be clear, consistent, neutral and non-discriminatory" and any other regulation that is deemed necessary "should not be to the advantage or disadvantage of electronic commerce compared with other forms of commerce."
There are no substantive principles regarding encryption or authentication policies, but there is agreement to continue "substantive bilateral discussions at experts level, including, as appropriate, both government and private sector participants, on the issues mentioned above as well as other issues, such as . . . encryption [and] electronic authentication/digital signatures . . ."
US and EU sources say that the phrasing of the statement is important in a couple of respects. First, there was agreement to separate authentication from encryption as two quite separate issues. Second, the reference to "authentication/digital signatures" was intended to reflect a view that asymmetric cryptography is merely one way to provide authentication.
Electronic Commerce
Joint Statement released in conjunction with the U.S.-E.U. Summit
Washington, DC, December 5, 1997
1. Global electronic commerce, driven by the development of the Internet, will be an important engine for growth in the world economy in the 21st century. Electronic commerce offers considerable new opportunities for business and citizens in all regions of the world. In particular, small companies will be able to obtain unprecedented access to world-wide markets at low costs and consumers will be able to choose from an even wider range of products and services. Electronic commerce will enhance productivity across all sectors of our economies, further encourage both trade in goods and services and investment, create new sectors of activities, new forms of marketing and selling, new revenue streams and, most importantly, new jobs. Services liberalization, particularly of the basic telecom services, plays a key role in underpinning the growth of electronic commerce.
2. We encourage an open dialogue between governments and the private sector world-wide in order to construct a predictable legal and commercial environment for the conduct of business on the Internet. We recognize that electronic commerce requires a coherent, coordinated approach internationally. Where government agreements are appropriate, we also commit ourselves to work together constructively along with our trade partners within the appropriate multilateral institutions and other fora to reach coherent and effective solutions preferably at a global level. In this regard, we agree on the importance of fully involving all countries, including developing countries.
3. We agree to work towards the development of a global marketplace where competition and consumer choice drive economic activity, on the basis of the following guidelines:
(i) That the expansion of global electronic commerce will be essentially market-led and driven by private initiative. It should take into account the interests of all stakeholders, in particular of consumers, libraries, schools and other public institutions, as well as the need to ensure the widest use possible of new technologies.
(ii) That the role of government is to provide a clear, consistent and predictable legal framework, to promote a pro-competitive environment in which electronic commerce can flourish and to ensure adequate protection of public interest objectives such as privacy, intellectual property rights, prevention of fraud, consumer protection, and public safety.
(iii) That industry self-regulation is important. Within the legal framework set by government, public interest objectives can, as appropriate, be served by international or mutually compatible codes of conduct, model contracts, guidelines, etc. agreed upon between industry and other private sector bodies.
(iv) That unnecessary existing legal and regulatory barriers should be eliminated and the emergence of new ones should be prevented. Where legislative action is deemed necessary, it should not be to the advantage or disadvantage of electronic commerce compared with other forms of commerce.
(v) That taxes on electronic commerce should be clear, consistent, neutral and non-discriminatory.
(vi) That it is important to enhance the awareness and confidence of citizens and SMEs in electronic commerce and to support the development of relevant skills and network literacy.
(vii) That interoperability, innovation and competition are important for the development of a global marketplace, and that, in this context, voluntary, consensus-based standards, preferably at an international level, can play an important role.
4. Specifically, we agree to work towards:
(i) A global understanding, as soon as possible, that:
- when goods are ordered electronically and delivered physically, there will be no additional import duties applied in relation to the use of electronic means.
- in all other cases relating to electronic commerce, the absence of duties on imports should remain.
(ii) The effective implementation by 1 January 1998 of the commitments on basic telecommunication services included in the schedules of commitments attached to the WTO General Agreement on Trade and Services (GATS) and the completion of the second phase of the Agreement on Information Technology Products by summer 1998.
(iii) The ratification and implementation, as soon as possible, of the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.
(iv) Ensuring the effective protection of privacy with regard to the processing of personal data on global information networks.
(v) The creation of a global market-based system of registration, allocation and governance of Internet domain names which fully reflects the geographically and functionally diverse nature of the Internet.
5. Furthermore, we agree on:
(i) Active support for the development, preferably on a global basis, of self-regulatory codes of conduct and technologies to gain consumer confidence in electronic commerce, and in doing so, to involve all market players, including those representing consumer interests.
(ii) Close cooperation and mutual assistance to ensure effective tax administration and to combat and prevent illegal activities on the Internet.
(iii) The important positive role that electronic commerce can play in developing a coherent approach to international work on trade facilitation.
(iv) Close cooperation in jointly defined areas of R&D and electronic commerce technologies, in the framework of the U.S.-EU Science and Technology Agreement, as well as in appropriate business pilot projects.
(v) Continuing substantive bilateral discussions at experts level, including, as appropriate, both government and private sector participants, on the issues mentioned above as well as other issues, such as government procurement; contract law and regulated professions; liability; commercial communication; electronic payments; encryption; electronic authentication/digital signatures; and filtering and rating technologies.
(vi) Close cooperation with a view to encouraging the exchange of statistical data on electronic commerce.
6. Where necessary to achieve these goals, we will continue our discussions with a view to reaching consensus in the appropriate multilateral fora, which may include, for example, the WTO, the OECD, WIPO, and UNCITRAL. We strongly encourage continued work within the U.S.-EU Information Society Dialogue, the Trans-Atlantic Business Dialogue and the U.S.-EU Joint Study.
7. We will examine progress towards achieving these goals at our forthcoming Summits.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information please contact L. Benjamin Ederington on Tel: +202-429-6411, fax: 202-429-3902 or E-mail: bedering@steptoe.com.