Future of the WTO in a digitalised world

Author
Marilia Maciel

[Read more session reports from WTO Public Forum 2019]

Mr Parminder Jeet Singh (Executive Director, IT for Change) explained that the session would discuss the future of the digitalised economy and the future of the World Trade Organization (WTO) within this context. Digital issues need the right governance arrangements, but the venue for the discussion of these issues must be adequate and take the views of relevant actors into consideration.

Ms Aparna Sinha (Counsellor (Services), Permanent Mission of India to the WTO) mentioned that the growth of the global value of e-commerce has been accompanied by the deepening of the global digital divide. More than half of the world’s population does not have access to high-speed broadband. They also lack digital literacy, capacity, and skills. The development of the digital economy has been concentrated so far, and led by the USA and China. According to the 2019 United Nations Conference on Trade and Development (UNCTAD) Trade and Development Report, market power and network effects strengthen existing platforms, which makes it almost impossible for newcomers and small and medium-sized enterprises (SMEs) to enter the market.

According to Sinha, regulators need to tackle a number of issues such as privacy, data flows, building skills, and competition. Governments must also be able to help companies in their respective countries receive a fair share of the digital pie. For this to happen, countries need to be able to control their data and use it to benefit their populations. India believes that it is desirable for countries to preserve the policy space needed to tackle such issues by not committing to premature agreements on e-commerce. India is not participating in the Joint Statement Initiative taking place at the WTO because its government is convinced that these international rules would cement the leadership position of China, the US, and the UK. Before engaging in negotiations, policies on data ownership, on data use, and on data flows must be developed. Finally, Sinha explained that the WTO moratorium on customs duties on electronic transmissions has led to a loss of fiscal revenue that has been predominantly borne by developing countries. According to the aforementioned UNCTAD report, the termination of the moratorium could generate more fiscal revenue for developing countries.

Mr Paul-Olivier Dehaye (Founder, PersonalData.IO) explained that digitisation is about personalised services. There has been a multiplication of contracts between large corporations and individuals who cannot negotiate the terms of these contracts and whom as a result lose their autonomy and their agency. From the standpoint of nation-states, digitisation brings forth a loss of sovereignty and less agency for both individuals and collectives to define their own objectives. MyData sees data as a valuable resource capable of improving people’s lives. MyData works on the grassroots level through local hubs. It also has thematic initiatives in fields such as healthcare and fields related to personal data. The organisation implements concrete actions – for example, it helps Uber drivers to access both their personal data and important information about how the platform operates. This will empower individual drivers as well as collectives of drivers. Dehaye made a few comments on the portability rights outlined in the EU General Data Protection Regulation (GDPR). According to him, portability is not rooted in economic motivations, but rather it is essentially a right to decide who gets to profit from our personal data.

Ms Deborah James (Director of International Programs, Center for Economic and Policy Research (CEPR)) explained that multilateralism is in a crisis. The WTO failed to deliver on the promise of shared prosperity. Trade elites have distributed income upwards, while lowering the incomes and the protections of workers. National policies can redistribute benefits, but the international system has been built to concentrate wealth. According to the 2019 UNCTAD’s Digital Economy Report, the digital gap is growing. As a result, countries need to preserve rights and policy space that will allow them to implement digital industrialisation strategies and to use data as a public good. Concrete measures such as obligations to hire local workers, technology transfer provisions, and the ability to request access to source code are all paramount. According to James, data has been monopolised by big corporations in a new form of digital colonialism. Data should be harnessed for entrepreneurs as well as community development in the public interest.

The current WTO proposals on e-commerce could be clustered in two baskets. The first is reducing barriers to trade, which means, in practice, increasing the power and the dominance of corporations. The second is limiting the action of governments on a number of issues, such as the use of bans or tariffs to protect domestic markets or new requirements on technology transfers, data localisation, and access to source code. According to James, opening national markets before increasing local digital capacity would simply decimate local companies.

Mr Richard Hill (Civil society activist) explained that the WTO is based on the promise that everyone is better off if trade increases. However, what we are seeing in practice is that trade is increasing the concentration of wealth and that big companies are becoming more profitable. One should bear in mind that the only objective of a company is to make money for its shareholders. For example, the need for regulations on car and aviation safety shows that if companies are left to their own devices, society does not stand to benefit. Negotiations on e-commerce ignore the fact that almost half of world’s population does not have access to the Internet and that the cost of connectivity remains very high in developing countries. Moreover, the benefits of e-commerce realised by SMEs are hampered by a number of challenges, such as obstacles related to e-payments or barriers regarding the physical delivery of goods. There is nothing to benefit SMEs in the current e-commerce proposals. At the same time, e-commerce negotiations include issues which are not trade issues, such as spam and cybersecurity. According to Hill, they are in fact trojan horses that carry the real issue that developed countries want to discuss: the free flow of data.

Questions from the audience were dedicated to issues such as the rising inequality brought on by trade, informational asymmetries generated by the control and the misuse of data, and the potential ways to tackle digital monopolies.

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