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Info Service on WTO and Trade Issues (May24/05) The co-convenors intend to conclude “negotiations on a WTO Electronic Commerce Agreement in a timely manner before the European Summer (before 1 August)”. The co-convenors said that they propose to host a Heads of Delegation (HoD) meeting on 21 May “to update members on the Co-convenors’ statement” that would be circulated in the coming weeks. However, the plurilateral JSI on e-commerce still hangs in the balance, as there is no formal approval by all WTO members, as per the provisions in Articles IX and X of the Marrakesh Agreement, said a non-participating country member, who asked not to be quoted. After the United States pulled out its ambitious proposals on cross-border data flows, localization of servers, and source code from the JSI negotiations on digital trade last year, the co-convenors attempted to cobble together an agreement based on other proposals in order to make it “palatable” for the participants, said people familiar with the negotiations. In the latest restricted draft text (INF/Ecom/85/Rev.3) circulated on 6 May, seen by the SUNS, the co-convenors said “the Chair’s Text reflects the judgement of Australia, Singapore and Japan, as Co-convenors, concerning the landing zones where consensus is most likely to be achieved in the agreement.” Stating that they “take responsibility for the Chair’s Text,” the co-convenors maintained that “it does not prejudice the positions or views of Australia, Japan, and Singapore as individual WTO Members participating in the negotiation.” The 33-page draft text, according to the co-convenors, “incorporates amendments arising from the 22-25 April 2024 negotiating round.” They said that the specific amendments made in the latest third version of the draft text include new language on “Article 8 indigenous peoples, Article 15 electronic payments, Article 16 customs duties, Article 25 development, Article 26 telecommunications, Article 36 review, and to remove Article 22 ICT products that use cryptography.” The co-convenors acknowledged that “development (in Article 25) remains critical to the final agreement.” “However, some members’ divergent positions on this article cannot be easily reconciled,” the co-convenors admitted, suggesting that they held “several sessions on this issue during the 22-25 April negotiating round and consulted proponents and other members subsequently.” The three countries suggested several “amendments that we assess have the best prospect of achieving consensus.” “In parallel, we are seeking more information from members and international organizations on the relevant capacity building and technical assistance to be made available to participants so that we can put together a comprehensive compendium of e-commerce-related resources for members to consider holistically with the package of commitments in this agreement,” they argued. The proposed language on development in Article 25 seems like an unwieldy package of best-endeavour provisions for providing capacity-building and technical assistance that depends on other international organizations, said a person familiar with the provisions. Commenting on customs duties, which is covered in Article 16, the co-convenors said “some members are still consulting or have expressed reservations.” They did not indicate what these reservations were, but maintained that they conducted “a number of consultations with members to confirm their support for the revisions to Article 16.” PROPOSED AGREEMENT The proposed agreement comprises 39 articles that are clubbed together under different major areas. Section A, for example, covers ” Scope and General Provisions”, with eight articles focusing on: Scope; Definitions; Relation to Other Agreements; General Provisions; Security Exception; Prudential Measures; Personal Data Exception; and Indigenous Peoples. As regards “Personal Data Exception” in Article 7, it is unambiguously stated that: “Nothing in this Agreement shall prevent a Party from adopting or maintaining measures on the protection of personal data and privacy, including with respect to cross-border data transfers, provided that the law of the Party provides for instruments enabling transfers under conditions of general application for the protection of the data transferred.” Effectively, such a strong personal data exception provision could pose problems concerning the sharing of personal data by Big Tech giants like Google, Amazon, Apple, and Microsoft among others. In a similar vein, the proposed language on “Indigenous Peoples” in Article 8 states: “8.1 Provided that such measures are not used as a means of arbitrary or unjustified discrimination against persons of another Party or as a disguised restriction on trade by electronic means, nothing in this Agreement shall preclude a Party from adopting or maintaining measures it considers necessary to accord more favourable treatment to Indigenous Peoples in its territory in respect of matters covered by this Agreement, including in fulfilment of its obligations under its legal, constitutional or treaty arrangements with those Indigenous Peoples. 8.2 The interpretation of a Party’s legal, constitutional or treaty arrangements with Indigenous Peoples in its territory, including as to the nature of the rights and obligations arising under such legal, constitutional or treaty arrangements, shall not be subject to the dispute settlement provisions of this Agreement. Article 27 (Dispute Settlement) shall otherwise apply.” In Section B on “Enabling Electronic Commerce”, Articles 9-15 of the proposed agreement cover: (1) “Electronic Transaction Frameworks”; (2) “Electronic Authentication and Electronic Signatures”; (3) “Electronic Contracts”; (4) “Electronic Invoicing”; (5) “Paperless Trading”; (6) “Single Window Data Exchange and System Interoperability”; and (7) Electronic Payments”. In Section C on “Openness and Electronic Commerce”, Articles 16-18 include: (1) “Customs Duties on Electronic Transmissions”; (2) “Open Government Data”; and (3) “Access To and Use of the Internet for Electronic Commerce.” As regards “Customs Duties on Electronic Transmissions” in Article 16, on which the Group of Seven (G7) industrialized countries proposed a permanent moratorium on customs duties on electronic transmissions, the draft text states: “16.1 For the purposes of this Article, “electronic transmission” means a transmission made using any electromagnetic means and includes the content of the transmission. 16.2 The Parties acknowledge the importance of the Work Programme on Electronic Commerce (WT/L/274) and recognise that the practice of not imposing customs duties on electronic transmissions has played an important role in the development of the digital economy. 16.3 No Party shall impose customs duties on electronic transmissions between a person of one Party and a person of another Party. 16.4 For greater certainty, paragraph 16.3 shall not preclude a Party from imposing internal taxes, fees or other charges on electronic transmissions in a manner not inconsistent with the WTO Agreement. Negotiators’ Note: Negotiators understand that the reference to “internal taxes” in this paragraph includes value-added tax and equivalents. 16.5 Taking into account the evolving nature of electronic commerce and digital technology, the Parties shall review this Article in the tenth year after entry into force of this Agreement, and periodically thereafter, with a view to assessing the impacts of this Article and whether any amendments are appropriate. Negotiators’ Note: Negotiators understand that the review provided for in this paragraph is in addition to any review pursuant to Article 36. Negotiators understand that this Article may be considered in any review pursuant to Article 36.” Surprisingly, Article 16 refers to the WTO’s multilateral 1998 Work Programme on Electronic Commerce, which appears to have been scuttled by key JSI members, said a person who asked not to be quoted. Section D of the proposed agreement includes Articles 19-22 covering issues such as (1) “Online Consumer Protection”; (2) “Unsolicited Commercial Electronic Messages” (Spam); (3) “Personal Data Protection”; and (4) “cybersecurity”. The proposed language on “Personal Data Protection” states: “21.1 For the purposes of this Article, “personal data” means any information relating to an identified or identifiable natural person. 21.2 The Parties recognise that strong and effective protection of personal data and related individual rights contribute to enhancing consumer confidence and trust in the digital economy. 21.3 Each Party shall adopt or maintain a legal framework that provides for the protection of the personal data of the users of electronic commerce. 21.4 In the development of its legal framework for the protection of personal data, each Party should take into account principles and guidelines developed by relevant international bodies or organisations. 21.5 Each Party shall endeavour to ensure that its legal framework under paragraph 21.3 provides non- discriminatory protection of personal data for natural persons. 21.6 Each Party shall publish information on the personal data protections it provides to users of electronic commerce, including guidance on how: (a) a natural person can pursue remedies; and (b) enterprises can comply with legal requirements. 21.7 Recognising that Parties may take different legal approaches to protecting personal data, each Party should encourage the development of mechanisms to promote compatibility between these different regimes. 21.8 The mechanisms referred to in paragraph 21.7 may include the recognition of regulatory outcomes, whether accorded autonomously or by mutual arrangement, or broader international frameworks. 21.9 Parties shall endeavour to exchange information on mechanisms referred to in paragraph 21.7 that are applied in their jurisdictions.” In Section E on “Transparency, Cooperation and Development”, Articles 23-25 cover issues such as (1) “Transparency”; (2) “Cooperation”; and (3) “Development”. While Section F deals with “Telecommunications” in Article 26, Section G covers “Institutional Arrangements and Final Provisions”. A new “Committee on Trade-related Aspects of Electronic Commerce” is being proposed in Article 28. In short, the JSI e-commerce negotiations that started in 2019 and likely to conclude in 2024, seem more like the proverbial “the mountain labours and brings forth a mouse”, said a former e-commerce negotiator. +
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