The European Commission published on Friday 3 May its proposal on digital trade presented to the World Trade Organization (WTO) last week (see EUROPE 12242/3). The plurilateral negotiations will enter into substance during the next round, scheduled for 13-15 May in Geneva.
The Commission's text is divided into three parts. In the first part, proposals are put forward to: - introduce horizontal rules on electronic commerce to, inter alia, facilitate online transactions, guarantee the validity of e-contracts and e-signatures or effectively combat spam; - impose obligations to guarantee consumer trust, permanently ban customs duties on electronic transmissions and their content; -prohibit mandatory source code disclosure requirements; - tackle barriers that prevent cross-border sales while ensuring protection of personal data ; - finally, adhere to the principle of open internet access.
The second part deals with rules specific to the telecommunications sector, including the revision of existing disciplines under the General Agreement on Trade in Services (GATS) at the WTO. The third component deals with specific market access requests, i.e. computer and telecommunications services. The EU proposes that all participants commit themselves to joining the Information Technology Agreement (ITA) (see EUROPE 11575/12).
A test for the WTO
In addition to the substantial economic benefits that these negotiations could generate, this new project, aimed at developing plurilateral rules on digital trade within the WTO, would demonstrate to Washington that this multilateral organisation has not lost its relevance, explained a senior European official.
The proliferation of chapters in free trade agreements on digital trade may lead to conflicting systems and rules, which could obstruct trade.
Avoid free-riders
The main focus of the next round of talks will be to outline the contours of the upcoming negotiations, which will be “very broad”, warned a senior Commission official. Seventy-seven WTO Member States have engaged in these plurilateral talks, including Russia, Brazil and China.
According to the same European source, China's participation is of particular importance. Indeed, the commitments made between the 77 members in this plurilateral negotiation will have to be extended to all WTO members, which could present the risk of generating free-riders' behaviour due to the organisation's non-discrimination clauses.
“Reconciling high standards while ensuring a critical mass of participants implies flexibility”, the same source pointed out, “we need a pragmatic approach in these discussions to avoid that they lead to an 'all or nothing’”.
Some States are missing, such as India and South Africa, which refused to sit down at the negotiating table.
Friction in sight
There is no shortage of sensitive issues, such as data protection and privacy on the European side, or network neutrality on the American side. Issues related to source code or telecommunications modernisation should also be a source of tension.
“No miracles are expected, these discussions will take time”, the senior official warned. Further rounds of negotiations are already on the agenda before the summer break in June and July. Commission negotiators hope that most of the topics will have been cleared up before the end of summer, to allow negotiators to discuss specific topics in the second half of 2019.
To read the proposal: https://bit.ly/2UZATOr. (Original version in French by Hermine Donceel)