At the World Trade Organization’s (WTO’s) 2019 Public Forum last week—where members of the public, academia and civil society discussed ideas on the theme of “Trading Forward: Adapting to a Changing World”—a group of 28 technology trade associations urged the WTO Membership to quickly progress talks on an “inclusive, high-standard, and commercially meaningful” WTO Agreement on E-Commerce. Highlighting the importance of digital trade to the global economy, the associations said an E-Commerce Agreement would “ensure that companies can continue to grow, innovate, and create jobs.”
The associations, who collectively represented tech interests from Asia, Australia, Europe, Japan, Nigeria, the United Kingdom and the United States, released a position paper highlighting 13 priority subject areas for the agreement. There are currently no specific multilateral rules governing electronic commerce, with traders largely relying on a patchwork of rules created by bilateral and regional free trade agreements. Therefore, the associations’ priority areas for a new global trade regulatory regime for e-commerce include:
- Enacting a permanent prohibition on tariffs and customs charges on electronic goods, a policy currently prohibited by WTO members only by a resolution that must be reapproved bi-annually.
- Facilitating cross-border data flows.
- Prohibiting localization requirements on data processing and storage.
- Ensuring adequate protection of personal data.
- Prohibiting requirements to disclose source code, algorithms or encryption keys.
- Promoting government regulatory cooperation and risk-based approaches to cybersecurity.
- Promoting good regulatory practices for digital services.
- Pursuing provisions that facilitate trade, such as increased de minimis levels and simpler customs procedures for small shipments.
- Promoting the acceptance of electronic contracts, signatures and authentication.
- Limiting legal liability (outside the area of intellectual property) for internet services and other intermediaries who host user-generated content.
- Expanding market access commitments for services.
- Expand market access commitments for information and communication technology (ICT) goods.
- Encouraging technological development by facilitating access to and use of open, machine-readable government data.
Eighty WTO members are currently engaging in the plurilateral e-commerce negotiations, which began in January 2019 among a smaller group of members. Since then, these members have met to discuss areas for negotiation and the desired scope of any final agreement, which is expected to cover many of the topics addressed by the technology associations’ position paper.
Progress has remained steady, but slow. In September, members discussed the largely non-controversial topics of e-signatures, contracts and invoicing. Negotiators plan to begin discussing the more controversial topics, including privacy, data localization, cross-border transfers and the moratorium on e-commerce duties in October and November 2019.
Substantive disagreements have arisen between the three largest economies involved in the talks—the United States, the European Union and China—on several key topics. For example, the United States and European Union have been unable to agree on the proper framework for privacy protection. China, meanwhile, does not want the agreement to address cross-border data flows or data localization and has introduced text that would require signatories to grant equal market access to its information and communications technology products.
Due to the WTO’s consensus-based approach to negotiations, many believe that achieving an ambitious E-Commerce Agreement will be difficult if China continues to be involved. Alternatively, members could significantly narrow the scope of the deal to attract the broadest possible support.
While members originally hoped for preliminary outcomes in the talks before the WTO’s June 2020 Ministerial Conference, significant developments are no longer expected at that time.
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