At Internet Governance Forum, Developing Countries Explain Need To Tread Carefully On E-Commerce Policy

Who does not like to have the possibility to shop online, or benefit from online services? No one disputes the advantage of the digital age, but in a world in which a very small number of actors, such as Google and Facebook, hosted by rich countries, reap most of the advertising benefits, developing countries are wary of binding rules that would only serve to enhance the digital and economic divide, according to speakers on an opening panel today at this week’s Internet Governance Forum.

The Internet Governance Forum is taking place in Geneva from 17-21 December.

Some developing countries are still struggling with broadband and internet access issues, and are not ready to discuss global rules governing ecommerce at the World Trade Organization, speakers said at an event organised by Public Citizen, the South Centre, and the Third World Network.

The session sought to explore the question of whether electronic commerce is good or bad for development. The 11^th WTO Ministerial Conference (MC11) held last week in Buenos Aires did not conclude on any substantive outcome for ecommerce.

Proposed ecommerce Rules Damaging

Aileen Kwa of the South Centre said the WTO is about trade liberalisation, but the current WTO rules in relation to goods coming from the General Agreement on Tariffs and Trade, and to services from the General Agreement on Trade in Services both allow countries to protect their own goods and services sectors in certain areas.

Some proposals on ecommerce at the WTO challenge this functioning, she said. Under the current WTO mandate on ecommerce, delegates are asked to look at the WTO agreements and see how they can incorporate ecommerce. In the last two or three years, some developed country governments have come up with a different digital agenda, she said, adding that the United States has sought to bring the provisions they had developed for the Trans-Pacific Partnership agreement on ecommerce to the WTO in a 2016 proposed work programme [pdf] in ecommerce.

The European Union [pdf], and Japan [pdf] followed suit with proposals on a work programme for ecommerce, she said.

Rules like that proposed by the US, according to Kwa, follow corporate interests, in particular of banks. For example, the US proposal suggests preventing the obligation for companies to build physical infrastructure and data centres in the countries they intend to serve. Financial institutions have said that such obligations would degrade financial institutions’ ability to provide services in a seamless way to customers across countries and regions.

Opening up completely to data flows could mean the wiping out of local banking industry of developing countries, she said.

Digital Fracture, Oligopolies Push

Fernando Rosales from the Bolivia Mission in Geneva said ecommerce and the digital economy are crucial for the future but developed and developing countries face different realities and issues.

In Bolivia, she said, despite efforts by the government, only around 23 percent of the population has access to internet.

At the WTO, some proposals did not address concerns of many developing countries, they contained different levels of ambition for an ecommerce work programme, with some of them containing market access elements, others measures ensuring openness, some geared towards the consolidation of “current monopolies and oligopolies.” They were all seeking to limit the countries’ capacity to promote public policies to expand the benefits of ecommerce for all, he said.

In those proposals, the most contentious issues include the no data localisation requirement, which would limit the countries’ right to regulate; the free cross-border data flows; limitations to regulate over consumer protection and privacy; no customs duties on electronic transmissions, and no transfer of technology.

“Interestingly,” Rosales added, “there were no proposals to deal with the excessive concentration in this sector.”

Cross-border data flow requires a better understanding. “If any entity captures data in a particular jurisdiction, should this entity not respect the laws of that jurisdiction?” he asked.

At the MC11, members agreed to reinvigorate the work programme to continue discussions on ecommerce, but “unfortunately, WTO is a very particular organisation where civil society has no access,” he said. Solving internet governance issues should not only be left to the narrow trade perspective but rather be addressed in the multi-stakeholder format of the United Nations, he said.

Avoiding ‘Digital Colonisation’

Michael Wamai of the Uganda Mission in Geneva insisted that the African Group in the WTO is not against ecommerce as such, but said before discussing multilateral rules, it is necessary to consider what kind of rules are needed.

Developing countries need to choose which path to take to pursue their industrialisation, which model to follow, and understand how the other players managed to develop their own digital economy. African countries are very familiar with colonialism, he said, and it is necessary to avoid the digital colonisation perpetuated by major players. Developing countries should not trade away their digital rights, he added.

He underlined the situation of least developed countries, unable to generate content, let alone derive benefit from it. Developing countries need a better skilled population and infrastructure, he said. The narrative saying that aid for trade could help poor countries is not true, he said, as only two countries out of the top 10 beneficiaries from aid for trade are LDCs. Most of the aid for trade goes to middle-income countries, he said.

Trump Administration Disengaged from Multilateralism

David Snead of the i2coalition, a business alliance based in the United States, said the Trump administration’s position towards the WTO is the same as its position towards trade in general.

The Trump administration, he said, believes that the US has not benefitted enough from trade and trade agreements, and now favours a one-to-one approach instead of a multilateral approach.

The US participated in MC11 and “did not blow it up,” he said, which is encouraging. However, the lack of interest in the WTO is illustrated by several positions taken by the Trump administration, such as not having permanent political representation at the WTO. The US ambassador to the WTO has not been confirmed by the US Senate, and the administration is not really in a rush “to move that person through Congress,” he said.

On ecommerce, leadership might come from the EU, he said, which would be a good thing on issues such as privacy.

According to Snead, the issue of data localisation is not a black and white issue. In some instances, requiring local data is important, he said.

Sanya Smith Reid of TWN, moderating the session, also remarked on the “TRIPS-plus” measures included in the US proposal, in particular on the protection of trade secrets. TRIPS-plus measures refer to measures going beyond the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

She said there is no reason discussions on ecommerce should not be transparent, citing other fora, such as the World Intellectual Property Organization, where she said discussions are transparent and all stakeholders invited to discuss.

Different Positions According to Fora

Parminder Sigh of the Just Net Coalition, a civil society organisation from India, said it is important to understand what is meant by ecommerce. At the WTO, developed countries are insisting that ecommerce rules are adopted as soon as possible, while developing countries say they are not ready.

However, at the Working Group on Enhanced Cooperation on Public Policy Issues Pertaining to the Internet (WGEC) 2016-2018 (of the UN Conference on Trade and Development), developed countries have the opposite position, claiming that no rules are needed while developing countries request rules.

Everybody agrees that everything is changing, he said, and the transformation is as big as industrialisation, everything has to be reorganised around digital intelligence.

At the WTO a group of developing countries “Friends of E-commerce for Development” (FED) first established by Costa Rica and Pakistan, now includes Argentina, China, Colombia, Costa Rica, Kenya, Mexico, Moldova, Montenegro, Nigeria, Pakistan, Sri Lanka, Tajikistan, and Uruguay (IPW, WTO/TRIPS, 31 October 2017). The FED issued a roadmap in April (IPW, WTO/TRIPS, 25 April 2017).

Like-Minded Countries Consensus Worrying

Pablo Viollier of Derechos Digitales, CSO in Chile, said his organisation, after having been accredited to attend M11, was at the last minute dis-accredited, upon request by Argentina “based on security issues.” He said this decision was “quite a shock” as he said his organisation “is just a bunch of nerds,” which never called for public action in the streets. After seeking a diplomatic solution with the Chilean embassy, Viollier was able to attend the last day of MC11, he said.

Viollier said issues relating to ecommerce and human rights, such as the net neutrality and internet access, are not discussed at the WTO in the context of the ecommerce discussions. It would for example hinder their abilities to implement open source software. US-based Google and Facebook dominate some 85 percent of the advertisement market revenues, which has effect on democracy and society, he said.

At MC11, 71 countries signed a declaration to move on with ecommerce discussions, he said (IPW, WTO/TRIPS, 14 December 2017). That is “really troubling,” he said, to see that there is a shift at the WTO to agree to consensus between like-minded countries, instead of with the whole membership.

 

Image Credits: Catherine Saez