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TWN
Info Service on WTO and Trade Issues (Nov23/09) Geneva, 17 Nov (D. Ravi Kanth) — The three co-conveners of the much-hyped Joint Statement Initiative (JSI) negotiations on “WTO electronic commerce” on 15 November issued a fifth revised draft text that seems to have turned the proposed deal into a digital trade facilitation agreement that is almost similar to the JSI investment facilitation agreement with best endeavour proposals, said people familiar with the new text. The JSI on e-commerce apparently seeks market access, which is also the case with the other two JSIs on domestic regulation in services and investment facilitation for development, said people, who asked not to be quoted. The three proposed agreements seemingly employ terms like “facilitation”, “development”, and in some cases, “sustainability”, to showcase how important they are to WTO members, while apparently concealing the real goals of market access, said people, who asked not to be quoted. When the three co-conveners – Japan, Australia, and Singapore – along with the major industrialized countries, particularly the United States, announced the JSI on digital trade on the margins of the World Trade Organization’s 11th ministerial conference (MC11) in Buenos Aires in December 2017, several ambitious claims were made by them about setting new global digital trade rules, said people who had attended MC11. After the US withdrew its three ambitious cross-cutting proposals on cross-border data flows, location of computing facilities and source code, progress in the JSI negotiations seems to be somewhat brisk with the introduction of the Rev.5 draft text, following the Rev.4 text that was introduced in August this year. The JSI on e-commerce was allegedly launched to undermine the multilateral negotiations on electronic commerce under the 1998 work program on electronic commerce at the WTO, which remained inconclusive largely due to the roadblocks created by a group of countries. Yet, after more than six years, the co-conveners seem to be rushing towards finalizing a low-ambition deal by the WTO’s 13th ministerial conference (MC13) that begins in Abu Dhabi in February 2024, said people familiar with the latest text. Perhaps, the JSI co-conveners seem to be attempting to conclude an agreement at any cost so that they could announce it along with the two other JSIs concerning investment facilitation, and domestic regulation in services at MC13, said a JSI e-commerce participant. It remains to be seen whether the attempts to announce these three plurilateral deals will succeed at MC13, as they would need multilateral consensus under the Marrakesh Agreement that established the 164-member intergovernmental, rules-based, and member-driven trade body, said people, who preferred not to be quoted. At present, two non-JSI members – India and South Africa – have raised fundamental issues about the JSIs having allegedly violated the core provisions of the Marrakesh Agreement. It is unclear whether India and South Africa will give their approval to these three proposed agreements at MC13 given the rules that they have allegedly violated in the Marrakesh Agreement, said people, who asked not to be quoted. INTRODUCTION OF REV.5 DRAFT TEXT In their introduction to the fifth revised draft text, the three co-conveners said, “This latest version (Rev.5) reflects the excellent progress we have made in our negotiations throughout the year.” They said that the JSI participants “concluded technical work on 12 articles, with another seven (7) small groups – including the recently formed Development and E-Payments small groups – currently in progress.” The co-conveners said, “Discussions this year have accelerated and laid a strong foundation for the contours of a credible and meaningful JSI package.” They said the Rev.5 draft text “is a working document that captures progress so far in the WTO Joint Statement Initiative on Electronic Commerce.” The Rev.5 draft text is issued under “the responsibility of the co-conveners,” and it “incorporates outcomes of small group discussions, consultations, and members’ additional submissions,” they added. They said that, “Proposals (other than cross-cutting issues) that have not yet been the subject of small group negotiations have been included in a separate Annex.” According to the co-conveners, the draft text 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 (Members) have expressed their intention that commitments would not apply to government procurement; a service supplied in the exercise of governmental authority; or, except as otherwise indicated, 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 may require sectoral carve-outs. * Several have noted the need to determine the relationship of provisions with Members’ market access commitments, the legal architecture of the JSI outcome, and existing WTO agreements. Further, they claimed that the latest draft 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. This working document does not prejudge the final legal framework which will give legal effect to each provision.” CONTENTS OF DRAFT TEXT The 65-page draft text contains the following sections that include: (1) “enabling electronic commerce”; (2) “openness and electronic commerce”; (3) “trust and electronic commerce”; (4) “cross-cutting issues”; (5) “telecommunications”; and (6) “scope and general provisions.” The first section on “enabling electronic commerce” comprises “facilitating electronic transactions” under which the elements include: (a) “electronic transactions frameworks”; (b) electronic authentication and electronic signatures”; ( c) “electronic contracts”; (d) “electronic invoicing”; and (e) “electronic payments.” It also includes “digital trade facilitation and logistics” that covers (1) “paperless trading”; and (2) “single windows data exchange and system interoperability/unique consignment reference numbers.” In the second section on “openness and electronic commerce,” some controversial issues are “customs duties on electronic transmissions,” and “access to internet and data” that includes “open government data” and “access to and use of the Internet for [electronic commerce/digital trade]”. The fate of customs duties on electronic transmissions could depend on whether the current moratorium on customs duties on electronic transmissions will be extended or be terminated at MC13 as per the MC12 mandate. The MC12 mandate states: “We agree to maintain the current practice of not imposing customs duties on electronic transmissions until MC13, which should ordinarily be held by 31 December 2023. Should MC13 be delayed beyond 31 March 2024, the moratorium will expire on that date unless Ministers or the General Council take a decision to extend.” In case the current moratorium is terminated at MC13, as demanded by several developing countries, particularly India and South Africa, then it remains to be seen what will happen to the issue of customs duties on electronic transmissions in the JSI e-commerce negotiations. TRUST & ELECTRONIC COMMERCE Under the section on “trust and electronic commerce”, the issues mentioned are “consumer protection” that includes online consumer protection; unsolicited commercial electronic messages (spam)”; “privacy” that covers personal data protection; “business trust” comprising “source code”; “ICT products that use cryptography”; and “cybersecurity.” With the US having pulled out its proposals on source code, the proposals here seem somewhat weak and are on a best endeavour basis. The proposals on source code are as follows:
[Alt 1 (a) to preserve and make available the source code of software [, or an algorithm expressed in that source code,] for [an/a specific] investigation, inspection, examination, enforcement action, or judicial proceeding, [including those relating to non-discrimination and the prevention of bias,] subject to safeguards against unauthorised disclosure. [; and (b) to transfer or provide access to the source code of software [, or an algorithm expressed in that source code,] for the purpose of the imposition or enforcement of a remedy granted in accordance with that [Party’s/Member’s] law following an investigation, inspection, examination, enforcement action, or a judicial proceeding].] [Alt 2 to preserve and make available the source code of software [, or an algorithm expressed in that source code,] for [an/a specific] investigation, inspection, examination, or judicial proceeding, [to determine compliance with its laws and regulations, including those relating to non-discrimination and the prevention of bias;] or to preserve, make available, or transfer the source code of software [, or an algorithm expressed in that source code,] for an enforcement action.] 5. When source code of software has been [preserved,] made available [, or transferred] [to a competent authority of a Party/Member] for the purposes referred to in paragraph 4, that [Party/Member] shall adopt or maintain measures to prevent the unauthorised disclosure of that source code. CROSS-CUTTING ISSUES The section on cross-cutting issues covers: (1) “flow of information”; (2) “transparency, domestic regulation and cooperation”; (3) “capacity building”; (4) “implementation periods for developing and least-developed countries”; and (5) “special and differential treatment provisions for developing country members,” including “options for capacity building and technical assistance.” TELECOMMUNICATIONS In this section, it is interesting to note that “disciplines relating to telecommunications services” have been included, even though they fall under the services negotiations. Perhaps, this is one more indication of how multilateral processes appear to have been set aside to include market access issues like telecommunications services. SCOPE AND GENERAL PROVISIONS The text on “scope and general provisions” includes issues on which there is currently no agreement. It covers the following issues:
Several issues in “scope and general provisions” seem controversial like the creation of a “Committee on Trade- related Aspects of Electronic Commerce” similar to the TRIPS Council. In conclusion, the race towards finalizing a JSI agreement on e-commerce suggests the contours of the seemingly emerging shift of a multilateral trade organization towards the arena of the major industrialized countries in which the developing countries are only marginal players.+
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