[Chapter-delegates] Civil society letter re WTO and e-commerce

[Richard Hill]

Dear colleagues,

 

Please find attached a letter signed by a large number of civil society organizations that calls on WTO to refrain from adopting a negotiating agenda for e-commerce. In my view, some of the proposals for e-commerce are directly related to Internet governance matters.

 

The letter also covers other matters, so I reproduce below that part that is specifically about E-Commerce.


Best,

Richard

 

==============

 

A number of new e-commerce proposals have been made at the WTO in the last year. Proponents often disguise

their proposals under the rubric of e-commerce as being necessary to unleash development through the power of

small- and medium-sized enterprises (SMEs). But SMEs are the least likely to be able to compete with giant

transnational corporations, which enjoy the benefits of scale, historic subsidies, technological advances, strong statesponsored

infrastructure, tax avoidance strategies, and a system of trade rules written for them and by their

lawyers.

 

Key provisions of the proposals include prohibiting requirements to hold data locally; to have a local presence in the

country; no border taxes on digital products; prohibitions on regulating cross-border data transfers; and even

prohibitions on requiring open source software in government procurement contracts. There is no economic

rationale as to why digitally traded goods should not have to contribute to the national tax base, while traditionally

traded goods usually do. Data is now the most valuable resource; furthermore, privacy and data protection are

fundamental human rights and they cannot be abandoned in the interests of trade. Locking in rules in the WTO to

allow corporations to transfer data around the world without restrictions would forever deny the right of countries

and citizens to benefit from their own data and intelligence in the future, and it would restrict the ability of countries

to implement appropriate data privacy and consumer protection measures. What e-commerce proposal proponents

call “localization barriers” are actually the tools that countries use to ensure that they can benefit from the presence

of transnational corporations to advance their own development and the economic, social, and political rights of

their citizens.

 

We need trade rules that allow for the creation of decent jobs, including in the technology sector. But the hallmarks

of companies like Amazon, Facebook, Google, and Uber include dislocation of local businesses and labor markets,

and increasing precariousness of work. These would accelerate if e-commerce proposals were accepted in the WTO.

Existing technology giants would be able to further consolidate their monopoly power. Their infamous tax

optimization (which is tantamount to evasion), including base erosion and profit shifting, would be facilitated by a

binding international treaty, and it would be nearly impossible to rein in the political instability engendered by the

economic and financial consequences of such a scenario.

 

WTO members do not currently have a mandate to negotiate new global rules on “e-commerce,” and they should

not obtain one in Buenos Aires. All of the issues proposed for the e-commerce agenda have either already been

discussed and resolved, or are currently being discussed, in other forums, most of which are more responsive and

accountable to public interest concerns than the WTO. E-commerce is already flourishing and SMEs can already sell

their products online without new WTO rules. Of course, e-commerce can be a force for job creation and

development, and certainly has the power to expand innovation, increase consumer choice, and connect remote

producers and consumers. But supporting e-commerce is not the same as having binding global rules that would

primarily benefit U.S.-based high-tech corporations, at the expense of public interest regulation to protect

consumers and promote development. While we support efforts by developing countries to address the digital

divide, transfer technology, and obtain financing for infrastructure and information and communications

technologies (ICTs), the WTO is not the proper forum to negotiate these issues; similar to the way other

development issues have been treated in the WTO, they will not become binding obligations, while the agenda of

the high-tech corporations will be binding. There should absolutely be no new mandate on e-commerce in MC11.

 

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