The Quiet Rapprochement of Internet Governance and Trade Policy

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This is a cross-posting from www.diplomacy.edu

Over the past decade, the impressive growth in Internet traffic has meant the increasing mobility of data, services, and wealth, connecting more than 3 billion potential customers and producers, while triggering the need for legally interoperable frameworks that facilitate trade.

It is now widely recognised that the promotion of Internet access and the adoption of Information and Communication Technologies (ICTs) can have very beneficial effects on economic growth, fostering the development of new technologies, the growth of markets, and ultimately enhancing human welfare. The link between development and Internet access has been acknowledged, for example, by the UN Broadband Commission, which explicitly aims at ‘boosting the importance of broadband on the international policy agenda, and expanding broadband access in every country as key to accelerating progress towards national and international development targets’. Indeed, Internet connectivity plays an instrumental role in facilitating the achievement of the UN sustainable development goals (SDGs) whose success increasingly depends on the universalisation of affordable Internet access.

In order to foster electronic trade, while harmonising the regulatory environment, several organisations have developed international frameworks, such as the Guidelines on the Protection of Transborder Data Flows of Personal Data, included in the Organisation for Economic Co-operation and Development (OECD) Electronic Commerce initiative. While the World Trade Organization (WTO) developed a Working Programme on Electronic Trade in 1998, governments and business actors have been calling for harmonised rules to enable international trade. Indeed, shared rules and principles seem to be as useful as they are needed to guarantee a common level of consumer protection, data protection, and cybercrime prevention. Nevertheless, as often happens in intergovernmental settings, the pace of negotiations has been relatively slow due to the difficulty of finding compromise amongst divergent economic interests. Notably, it is possible to see a clear division between developing and developed countries on the pace and the content of the digital trade agenda. While the latter are pushing for a speedy way forward and comprehensive talks, the former are being more conservative with issues that should be included and are emphasising the need for capacity building.

In parallel to multilateral venues, groups of countries have joined together to more swiftly negotiate plurilateral agreements. Some of these efforts seek the establishment of shared rules regarding quite controversial issues, such as cybersecurity, net neutrality, data localisation, and cryptography, the lack of which may have undesirable effects on trade flows. Governments and the private sector, notably in the USA, are actively calling for such rules and the recent signature of the Trans-Pacific Partnership (TPP), in February 2016, seems to demonstrate that such calls have not gone unanswered.

Notably, US efforts to include TPP-like provisions in trade-related agreements, such as the Transatlantic Trade and Investment Partnership (TTIP), and the Trade in Services Agreement (TISA) have been particularly pronounced. TPP signatories have promoted TPP-based clauses in other instruments in order to establish compatible frameworks, such as the recent proposal on a Mexico-Brazil e-commerce agreement. The ultimate goal of such rules is to facilitate the free flow of information and limit the leeway of national governments to establish measures that could potentially restrict the transnational provision of goods and services.

Enhanced cooperation?

After years of intensive trade negotiations outside the WTO, it seems that some of the topics originally advanced within plurilateral arrangements are finding their way onto the agenda of the organisation. In preparation for the 11th WTO Ministerial Conference in 2017, several member states have circulated non-papers with the aim of enhancing the understanding of the different positions with regard to electronic commerce. Their proposals can be clustered into four areas: regulatory frameworks, open markets, initiatives facilitating the development of e-commerce, and transparency of the multilateral trading system. The topics included under the umbrella of regulatory frameworks show an interesting interplay with key issues that are part of the Internet governance agenda, such as network neutrality, data localisation, interoperability, and access to source code.

It seems essential to stress that the challenges of e-commerce encompass several elements that go well beyond the traditional trade agenda, such as technical standardisation as well as the impact that global economic policies may have on other bodies of international law, such as human rights and labour standards. To meet such a level of complexity with appropriate responses,  it seems essential to develop multi-player and multi-layer governance and policy-making mechanisms. In the lack of any formal alternative, the WTO could end up positioning itself as an aggregator of information and a connector of policy communities that are able to address issues that the WTO could not do alone.

Since the World Summit on the Information Society (WSIS), the need to strengthen coordination and policy coherence on Internet policy issues has been the core tenet of the never-ending discussions about ‘enhanced cooperation’.  Enhanced cooperation was meant to be one of the main outcomes of the second phase of WSIS and is explicitly mentioned in paragraph 69 of the Tunis Agenda. The establishment of such a process was meant to enable decision-making mechanisms, driving the ‘development of globally-applicable principles on public policy issues’ (Tunis Agenda para 70). The process for implementing enhanced cooperation should have started ‘by the end of the first quarter of 2006 […] involving all relevant organizations, [and]stakeholders in their respective roles’ (Tunis Agenda para 71). Nevertheless, after more than a decade, discussions are still ongoing with regard to the very meaning of enhanced cooperation and a working group on the issue has been established under the auspices of the UN Commission on Science and Technology for Development (UNCSTD).

Although spontaneous examples of multistakeholder cooperation have been springing up over the past decade, the post-WSIS reality witnessed the emergence of no innovative mechanism able to further ‘enable governments, on an equal footing, to carry out their roles and responsibilities, in international public policy issues pertaining to the Internet’ (Tunis Agenda para 69).  To date, no coordination mechanism has been created and no clearinghouse function has been institutionalised. Nevertheless, the need for better coordination amongst the players of the Internet governance ecosystem has been widely recognised in forums as different as the WTO Public Forum or the NETmundial meeting, which culminated with a Multistakeholder Statement calling for the creation of ‘Internet governance coordination tools to perform on-going monitoring, analysis, and information-sharing functions’.

So what?

The lack of a concerted international response capable of coordinating and facilitating policy-making efforts may be having a two-pronged effect over digital policy discussions. At the international level, governments are looking for existing forums in which they could have meaningful outcome-oriented policy discussions. This may lead to the broadening of the agendas of some organisations, such as the aforementioned WTO electronic commerce discussions. One the other hand, it calls on the interest of promoting bilateral or plurilateral agreements aimed at reducing barriers and fostering free trade. These variable geometry negotiations allow the most digitally advanced countries to move forward and set policy standards for the latecomers. Governments seem to increasingly consider trade negotiations as more favourable forums for Internet policy-making, due to the higher likelihood that conventional intergovernmental negotiations will lead participants to reach a tangible outcome.

However, it is important to stress that the purpose of trade agreements is to regulate the behaviour of states and, for this reason, they are traditionally a mono-stakeholder environment. Although discussions at the WTO are more transparently documented than the usually opaque plurilateral negotiations, big private sector players have been generally renowned for exerting a great influence on trade negotiations, while other  stakeholders, such as non-governmental organisations, academics, and small businesses have had no voice in such discussions.

For this reason, trade agreements have been often criticised – and sometimes vehemently opposed – due to their propensity to favour major economic interests and overlook human rights considerations. In Internet governance venues, however, these values are commonly considered as a core pillars. If the WTO – or any other international body – wants to succeed in becoming a credible venue for the discussion of digital policy issues, openness and transparency, and promotion of human rights have to be key drivers of its process. Low consideration of these issues, on the contrary, may lead to quite troublesome consequences. On the one hand, the strong opposition of civil society may lead to the rejection of an agreement, thus determining a significant waste of resources, as the ACTA saga exemplifies tellingly. On the other hand, the approval of a text ignoring the human rights impact of trade policy may lead to tragicomic consequences, such as allowing an enterprise which sells carcinogen products to sue countries whose pro-health policies supposedly ‘devalue’ its investments, as in the Philip Morris v. Uruguay case.

Lastly, it remains to be seen if the true purpose of including issues such as net neutrality in trade agreements is to ease the free flow of information or rather to bind governments to different rules from those that have emerged from – or are being discussed in – a variety of participatory-democracy experiences. Sceptics may think that the development of trade agreements may turn out to be a parallel decision-making system aimed at circumventing democratic decisions.

If governments want to prove the sceptics wrong, while minimising the chances of trade agreements being rejected and maximising the resources they invest in negotiations, it seems essential that trade negotiations integrate at the procedural principles that are supposed to characterise all Internet governance mechanisms.

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