E-commerce in the WTO: what Argentina wanted to silence

Proposed negotiations on e-commerce in the WTO are inconvenient for developing countries, for our SMEs and for people in general.

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What might be the "disruptive" opinions that the Argentine government wanted to keep out of the World Trade Organization (WTO) deliberations, when it denied the registration of some 60 participants to the Ministerial Meeting, and prevented the entry of several of them into the country, either by denying their visa or, in two cases including mine, through deportation?


One of the topics on the agenda of the WTO Ministerial Meeting, which closed on December 13 in Buenos Aires, with scant agreements, is the proposal to open negotiations on electronic commerce. A matter on which many of us, and our organizations, have been warning that it is not convenient for developing countries, for our SMEs, or for the general public.


Today, in many areas of the economy, trade in digital goods and services is rapidly replacing trade in physical goods and services, a change which will spread even faster with the "Internet of Things" and artificial intelligence. In principle, e-commerce could bring numerous benefits, such as job creation, innovation and consumer choice. However, the problem is that, in the absence of regulations, the transition to the digital realm often favors greater concentration – and even monopolization. It is precisely what we are seeing, when 50% of the e-commerce in the world today goes through Amazon.com, while Google and Facebook concentrate a major part of the online advertising market.


Those who are promoting these negotiations argue that they will favor SMEs; but small companies are the ones that can least compete with these giant corporations, which have the benefits of scale, subsidies, national infrastructure, technological advances, etc. What SMEs need are national regulations and policies that give them opportunities to develop their own technological capacity, as well as preferential access to markets and competition.


Yet the binding measures that developed countries want to impose in the WTO (and which in fact had already been negotiated in the TPP and TISA trade agreements), aim, on the contrary, for deregulation, and prioritize clauses whose effect will be to further strengthen the concentration of power in a few large transnational corporations (TNCs).


This pro-TNC agenda, promoted since 2016 by the US, and now by Europe and Japan (given the unilateralist policy of the Trump government), would mean, among other things:


- The "free flow of data", which in practice means that everyone’s personal data become a commodity that large corporations can export and exploit, generating huge profits, without any personal or collective benefit for the people who generate the data. It also means that our countries will be able to do little to protect the privacy of their citizens, since the data will be under the jurisdiction of the country where the data are stored; in the case of the US, these laws are scarcely favorable to the national population and offer almost zero guarantees to extraterritorial users.


It is worth keeping in mind that data is highly coveted as the basic input of the digital economy. If the developing countries renounce the possibility of adequately regulating their extraction and use (for example, with the requirement of local data storage), they will be sacrificing the possibility of taking advantage of them to develop their own technological sector.


- Developing countries would be denied the possibility of requiring investors to transfer technology, which means losing an opportunity to develop local knowledge and capacity (worker training) or to develop their own technology sector.


- Governments will not be able to demand that large foreign e-commerce companies have a physical presence in the country. This means, on the one hand, loss of jobs or greater job instability due to the outsourcing or hiring of self-employed workers, and on the other hand, that consumers will have no legal recourse for claims within their country.


- Nor could they require companies offering digital service contracts to open up their source code, or to use national software. This is particularly worrying in the case of artificial intelligence, since these systems are capable of making certain decisions autonomously, using algorithms. Without the ability to know how they operate, how can one demand accountability for bad decisions or guarantees that they do not have built-in bias?


Next steps


For now, at least, the attempt to open these negotiations failed. A majority of developing countries, led by India and almost all of Africa, refused to give this mandate to the WTO. This is an achievement, considering that the pressures to accept were very strong.


But the matter does not end there. Another 70 countries (mainly those that are part of the TISA negotiations, and also Argentina), adopted a statement in favor of electronic commerce "and the opportunities it creates for inclusive trade and development", where they emphasize opportunities for the MSMEs.  Moreover, they agreed to undertake a parallel initiative, starting in 2018, open to all countries, to "initiate exploratory work together towards future WTO negotiations on trade-related aspects of electronic commerce". By all accounts, this is a means of circumventing the formal procedures of the WTO (where there is already a working group on e-commerce, but without a negotiating mandate), in order to return in strength to the WTO with a pre-negotiated agreement, in which the MSMEs are the bait to attract adherence.


Like many other issues discussed in the WTO, e-commerce (and the new digital economy) has important implications for human rights, development and social justice, among others. And these issues should not be discussed in closed spaces and without the voices of the people. It would be a mistake to think that the e-commerce agenda is a technical matter that can be left to "experts". The future of our countries and their development could be severely jeopardized if these negotiations prosper.


There are clear signs that it was the criticism of proposals such as these that Argentina wanted to minimize within the WTO meetings in Buenos Aires.


- Sally Burch is a British-Ecuadorian journalist, executive director of the Latin American Information Agency – ALAI (www.alainet.org).



Article first published in Spanish on 13/12/2017




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