News of the European Union Vietnam Free Trade Agreement seems to be the only news in an otherwise dismal time for international, plurilateral trade deals. With multilateral trade negotiations facing serious challenges at the WTO, and large plurilaterals like RCEP and TTIP not overcoming deep rooted negotiating positions, the EU Vietnam FTA is indeed news and cheer for trade negotiators. It is also only the second EU trade agreement in Asia after Singapore. At the other end of the spectrum, is a new US-Japan digital trade agreement covering binding norms on ecommerce.
Ecommerce is one of the emerging areas in the narratives on negotiations at the WTO. A plurilateral initiative for outcomes on ecommerce is also underway at the WTO with a group initiating exploratory work together toward future WTO negotiations on trade related aspects of electronic commerce. There is a sharp schism between groups of nations at the WTO on what rules should exist to address ecommerce issues in international trade, if at all required. Some think it is premature ot have any rules on ecommerce in the global arena.
Let us look at these two recent agreements covering e commerce of highly influential and norm-setting members of the WTO - the US and the EU.
The US-Japan digital trade agreement was signed in 2019. As the Fact Sheet of the USTR said;
On the other hand, the EU-Vietnam Agreement (the entire agreement is here) has a very brief chapter on ecommerce (Chapter 8.50). It only imposes a prohibition on customs duties on electronic transmissions, not even digital products as outlined in the US-Japan agreement. Further, it visualises regulatory co-operation in areas of ecommerce - a soft law endeavour to continue to talk about ecommerce.
It states that the Parties shall maintain a dialogue on regulatory issues raised by electronic commerce, which shall, inter alia, address the following issues: (a) the recognition of certificates of electronic signatures issued to the public and the facilitation of cross-border certification services; (b) the liability of intermediary service providers with respect to the transmission, or storage of information; (c) the treatment of unsolicited electronic commercial communications; (d) the protection of consumers in the ambit of electronic commerce; and (e) any other issue relevant for the development of electronic commerce. This dialogue may take the form of exchange of information on the Parties' respective laws and regulations on the issues referred to in paragraph 1 as well as on the implementation of such laws and regulations.
Evidently, this is very different from the enforceable rules in the US-Japan agreement. While the former consists of enforceable rules (without a dispute settlement mechanism though which is rather surprising), the latter is a soft law, aspirational document to take the discussion forward. The question then is what is the ideal trade rule setting for ecommerce? Is there a gold standard? Is a gold standard always required? Are national priorities guiding factors in determining the contours of norm setting rather than a notion of a single good? Is ecommerce norm setting less important for the EU than the US?
These two agreements indicate the vast diversity trade agreements could have on the same subject depending on the position the negotiating party takes. There is no one size fits all in international trade negotiations.
Ecommerce is one of the emerging areas in the narratives on negotiations at the WTO. A plurilateral initiative for outcomes on ecommerce is also underway at the WTO with a group initiating exploratory work together toward future WTO negotiations on trade related aspects of electronic commerce. There is a sharp schism between groups of nations at the WTO on what rules should exist to address ecommerce issues in international trade, if at all required. Some think it is premature ot have any rules on ecommerce in the global arena.
Let us look at these two recent agreements covering e commerce of highly influential and norm-setting members of the WTO - the US and the EU.
The US-Japan digital trade agreement was signed in 2019. As the Fact Sheet of the USTR said;
As two of the most digitally-advanced countries in the world, the United States and Japan share a deep common interest in establishing enforceable rules that will support digitally-enabled suppliers from every sector of their economies to innovate and prosper, and in setting standards for other economies to emulate.It aims to be a "gold standard" agreement on ecommerce that should be aspired for to bring enforceable rules in the realm of ecommerce. Some of the key outcomes of this agreement include:
The key outcomes of this agreement include rules that achieve the following:
This could be a template for any ecommerce chapter in a ambitious agreement. Future negotiations can treat this as the base text. it lays down the blue print for enforceable rules in the most contentious issues of ecommerce - data localisation, data transfer and source code transfer.
- Prohibiting customs duty - Prohibiting application of customs duties to digital products distributed electronically, such as e-books, videos, music, software, and games.
- Cross border data transfer - Ensuring that data can be transferred across borders, by all suppliers, including financial service suppliers.
- Prohibiting data localization - Prohibiting data localization measures that restrict where data can be stored and processed, enhancing and protecting the global digital ecosystem; and extending these rules to financial service suppliers, in circumstances where a financial regulator has the access to data needed to fulfill its regulatory and supervisory mandate.
- Preventing forced disclosure of source code - Protecting against forced disclosure of proprietary computer source code and algorithms.
On the other hand, the EU-Vietnam Agreement (the entire agreement is here) has a very brief chapter on ecommerce (Chapter 8.50). It only imposes a prohibition on customs duties on electronic transmissions, not even digital products as outlined in the US-Japan agreement. Further, it visualises regulatory co-operation in areas of ecommerce - a soft law endeavour to continue to talk about ecommerce.
It states that the Parties shall maintain a dialogue on regulatory issues raised by electronic commerce, which shall, inter alia, address the following issues: (a) the recognition of certificates of electronic signatures issued to the public and the facilitation of cross-border certification services; (b) the liability of intermediary service providers with respect to the transmission, or storage of information; (c) the treatment of unsolicited electronic commercial communications; (d) the protection of consumers in the ambit of electronic commerce; and (e) any other issue relevant for the development of electronic commerce. This dialogue may take the form of exchange of information on the Parties' respective laws and regulations on the issues referred to in paragraph 1 as well as on the implementation of such laws and regulations.
Evidently, this is very different from the enforceable rules in the US-Japan agreement. While the former consists of enforceable rules (without a dispute settlement mechanism though which is rather surprising), the latter is a soft law, aspirational document to take the discussion forward. The question then is what is the ideal trade rule setting for ecommerce? Is there a gold standard? Is a gold standard always required? Are national priorities guiding factors in determining the contours of norm setting rather than a notion of a single good? Is ecommerce norm setting less important for the EU than the US?
These two agreements indicate the vast diversity trade agreements could have on the same subject depending on the position the negotiating party takes. There is no one size fits all in international trade negotiations.
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