The World Trade Organization (WTO) is going to hold a ministerial conference from 10 to 13 December 2017. This conference could be of high importance for e-commerce and Internet governance. The WTO ministerial conference happens every 4 years. Delegates have discussed the e-commerce work program at every ministerial conference since 1998. They have not, however, made any decisions. In this blog we encourage the WTO to get involved with e-commerce in a more binding fashion. An e-commerce agreement at the WTO can help prevent data localization and maintain better privacy protection for consumers. We also briefly mention that intellectual property rights in the context of e-commerce should be balanced and and contain strong fair use provisions.
A brief background on WTO e-commerce activities
In 1998 WTO issued a declaration which established a work program to identify all the trade issues related to e-commerce. Four councils were mandated to carry out the work program: the Council for Trade in Services, the Council for Trade in Goods, the Council for TRIPS and the Committee for Trade and Development. The Ministers have considered the work program at each of the Ministerial Conferences and have instructed the work program to be continued. However, there is no sign of binding action being taken that is related to e-commerce at WTO. Despite an early involvement and initiation of the work program, WTO’s involvement with setting trade rules about e-commerce has been minimal.
The only decision about e-commerce since 1998, which has remained unchanged and has had positive effect, was the WTO declaration that “Members will not impose customs duties on electronic transmissions.”
WTO should have a more active role in e-commerce
The passive role of WTO might not last. Various trade agreements are being negotiated and discussed in different forums and these negotiations include e-commerce chapters. Europe and US among other countries, have already asked for e-commerce related topics to be discussed at the Ministerial meeting in December 2017. It is timely for WTO to look into coming up with trade related policies.
The need to discuss the role of WTO in e-commerce and whether this role has to change has been raised at the WTO Goods Council. Some member states have agreed to discuss forming a working party on e-commerce at WTO. A working party at WTO has more authority in taking decisions and starting negotiations about e-commerce. A decision to form a working party during the Ministerial in December is a good step forward towards getting involved with e-commerce.
Why is WTO a suitable forum?
Data localization hampers digital trade, and information service providers have to incur substantial costs to be able to provide their services globally. The cross border nature of the Internet will be defeated by data localization laws. Additionally, data localization can have effects on freedom of expression and human rights. In countries with weak or no privacy protection laws, data localization can lead to surveillance and activists arrests. With the rise of IoT devices and cloud computing, cross border data flow is gaining even more importance. Data localization, a non tariff barrier to trade, can be framed as digital protectionism.
WTO can discuss and agree on rules that facilitate cross border data flow and prevent data localization requirements. Trade agreements are a means by which the information services and the free flow of information have been protected and sustained historically. With a multilateral agreement on minimum privacy protection for consumers, WTO can commit its members to consider privacy measures in their local laws. This will be especially to the benefit of those countries with no privacy laws. The practice of not imposing customs duties on electronic transmissions should also be indefinitely binding on the member states.
IPR, digital trade and WTO
WTO should be cautious when approaching the Intellectual Property Rights (IPRs) regarding e-commerce. The TRIPS council has been discussing IPRs as a part of the e-commerce work program mandate. In its approach, the Council and WTO should maintain the balance that exists in of the Agreement on Trade-Related Aspects of Intellectual Property. With the unprecedented flow of information on the Internet, it is pivotal for WTO to consider strong fair use provisions.