Three Questions on Digital Trade

The inclusion of an e-commerce chapter in the recently concluded TPP Agreement has sparked off a debate around the world on internet issues being a part of trade agreements. In my last post I had looked at the efforts of civil society groups trying to engage with various trade negotiation processes through the EFF Meeting in Brussels. In this piece, I identify three issue areas that borrow from both trade and internet governance worlds to form some of the foundational concerns in this emerging area.

  1. Incorporating Internet Governance norms

One of the criticisms of the inclusion of internet related provisions in trade agreements has been the way it is framed. As provisions that govern e-commerce, TPP and similar new generations trade agreements adopt a commoditized approach to internet regulation. This may not be a problem in and of itself. But, in the absence of hard law rules internationally on many internet-related issues, there is a danger that the trade law rules could become the default international rules on many of these issues. The TPP for instance contains provisions that could potentially impact privacy, the disclosure of source codes and network neutrality.

However, these issues are being resolved at either the national or regional levels through public consultations, guidelines and even legislations. One such example is the recent debate in India over network neutrality. To create a regulatory environment that gives states enough space to make rules on such issues, such domestic or regional rules as standards should be incorporated in future agreements. This will ensure that laws that are enacted from an internet governance standpoint are not superseded by commercial rules.

  1. Human Rights and Social Obligations

The problem with trade rules that often take a commoditized approach to privacy and network neutrality is that they are either human rights or have human rights implications. Privacy has over the last few years been recognised internationally as a human right. Network neutrality on the other hand has significant free speech implications and can also affect the right to access which is also being seen as a right. There has been discussion in the past for an “Internet Bill of Rights”. While this is yet to take any tangible form at the international level, there are a group of human rights -like free speech, privacy and the right to, access to name a few- that have taken on greater importance in the context of the internet.

The recognition or mention of these rights in trade agreements will, 1) ensure that these rights aren’t eroded and 2) encourage the diffusion of human rights through trading partners. This is not without precedent. The EU has for long incorporated human rights provisions in its engagement with third parties. On environment and labour issues, both the EU and US trade agreements over the last decade have included “Social Standards” that must be enforced domestically by the trading partner. Extending this treatment to internet rights will only be a continuation of existing trade policy.

  1. Excluding Developing Countries from Rule Making

The biggest impact of these agreements is the shift of the trade regime away from a multilateral setting like the WTO. By negotiating plurilateral and mega-regional agreements between a small group of countries, the TPP, TISA and TTIP (to name a few) are making new rules on trade and creating higher standards. But this also means that a large majority of countries are excluded from these rules which are likely to become the new standards for trade and also potentially affect development goals.

E-commerce chapters in the TPP and TISA (proposed) are the best examples of this phenomena. The internet over the last decade has been an engine of growth across the world and especially in developing countries. A significant part of this has been through the exchange of goods and services online. In the absence of rules to govern the internet internationally, all countries are at a relatively equal footing to benefit from the digital economy. However, as these new generation agreements create new rules and standards for participation in the digital economy, it could also potentially create barriers for developing countries to participate in it. While there is no obvious solution to this issue, keeping the internet open and accessible should go some way in resolving it.

Resolving the above three questions should bring coherence to policy debates around e-commerce rules in trade agreements. The debate is complicated as it involves the overlap of two competing global regimes. But there are policy gaps that can be filled by engaging on the above issues in a meaningful way.

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