Washington – On July 26, co-convenors of the World Trade Organization Joint Statement Initiative on Electronic Commerce (JSI) and member states party to the initiative released a “stabilized” text of an interim digital trade agreement to be integrated into the WTO framework. This action capped off five years of work towards a WTO digital trade agreement, but excluded core provisions relating to data flows, data localization, and source code protection. These essential provisions had long been previously part of the negotiations prior to their removal.
Many members of the JSI, such as the United States, Indonesia, and Brazil, declined to join.
The agreement also included an unnecessary exception that would provide cover for authoritarian and/or protectionist governments to impose data localization restrictions or other rules harmful to the open internet and freedom of expression online. CCIA published a memo surveying the various harmful measures that would be legitimized by this exception.
The following can be attributed to CCIA Vice President of Digital Trade Jonathan McHale:
“This now-stabilized WTO agreement includes some positive elements such as a prohibition on customs duties on electronic transmissions and other trade facilitation provisions. However, failure to conclude negotiations on data flows, data localization, digital products, and access to source code means that core rules for ensuring mutually beneficial digital trade are largely absent, and, as such, finalization of this agreement is premature. The decision to move forward with a pared-down agreement, without the most prominent player in the digital space—the United States—will likely undermine the goals of this initiative.”
“Furthermore, the inclusion in this agreement of a non-germane, overly broad exception, ostensibly to shield domestic privacy measures from challenge, is neither necessary nor justified. It will, contrariwise, provide a roadmap for the proliferation of both protectionist and authoritarian policies that undermine free expression, legitimate commerce, and an open internet. Without a path for addressing this fatal flaw, this initiative will be unable to progress.”