US Senator Chris Murphy published a piece in the Financial Times today arguing that the US must continue on its path of retreating from the recently concluded e-commerce agreement at the World Trade Organization, which Washington stopped supporting.
This is a good moment to set the record straight on this deal and on a slew of other digital trade agreements that have emerged in recent years among a subset of countries frustrated with the glacial pace of developments in Geneva.
These include the Digital Economic Partnership Agreement of Singapore, New Zealand, Chile and South Korea, the UK-Singapore digital agreement, the digital provisions of the EU in its trade agreements with New Zealand, Chile and Singapore, and even the Trump-era US-Japan digital trade agreement.
Standards for the digital era on data privacy and consumer protection
First and foremost it enjoins all parties to set a domestic legal framework for civilized digital trade. And this is precisely what the United States has in many ways failed to do in recent decades.
The e-commerce agreement that is awaiting adoption in Geneva sets basic standards for signatory countries to establish a data privacy framework and a consumer protection framework.
Article 16 of the negotiated e-commerce text does just that for ‘personal data protection’. “Each Party shall adopt or maintain a legal framework that provides for the protection of the personal data of users of electronic commerce,” its paragraph 3 says.
The US has been incapable of establishing a federal data privacy framework, thanks to its fractured politics and the lobbying power of big tech giants. I have not seen any effort of the outgoing Biden administration to fix that issue over the last years.
On reading all these agreements carefully over recent weeks, yours truly has often wondered if the real reason why the US pulled out of the e-commerce deal isn’t this one.
Washington doesn’t seem to want to be subject to international scrutiny on such matters, as indeed, if adopted, the e-commerce agreement would subject them to potential dispute settlement. The left-wing of the Democrats appear to have lost sight that its pull-out could perversely turn into a blessing for some of the US tech giants – most of them in fact now want to be regulated properly.
China signed on to the above-mentioned e-commerce standards in Geneva and, if the US was participating, this would be a great opportunity to put China and its Alibabas under greater scrutiny here.
US failure to regulate at home
The US politicial further argues that the proposed WTO e-commerce agreement allows for “data to move seamlessly across borders”.
One wonders if some in the US political class have read the text of the e-commerce agreement as negotiated, not least its provisions related to the exceptions on data privacy grounds as well as national security. Anyone can keep their China and Russia-related privacy and digital, data and cyber security policies in place.
The real issue here is whether a country is willing and able to engage in rules-based behaviour in geopolitically non-problematic situations.
Perhaps the US Senator has heard about the EU’s General Data Protection Regulation, which some in the US tech milieus furiously dubbed the biggest data localization measure on earth when it was enacted in 2018 (then came China).
Memory being in short supply in times of frenetic electoral politics, it might be useful to recall that the Biden administration has been eager to seal a deal with the EU that precisely allows that data to flow to the US in future, as long as EU citizens enjoy their data privacy rights.
Indeed, why has the US not been capable of giving those rights to its own citizens? And how would pulling out of an e-commerce agreement in Geneva that says everyone needs a data privacy framework help the Democrats get that through back home?
Because one can be sure that a second Trump administration, supported by one of those plutocratic “monsters” created by the unregulated US digital legal system, Elon Musk, wouldn’t care one second.
The tariff men have a free hand
The second most important thing that the e-commerce agreement in Geneva does – as well as the other ones cited above – is make permanent an existing temporary WTO ban on customs duties on digital transactions.
Perhaps here too, the tariff men of the Trump and Democratic parties in Washington might prefer to keep a free hand. Pulling up the drawbridges here would force any state to establish a Chinese-style bureaucracy to check on every transaction. It would probably kill off a lot of small and medium-sized businesses of hardworking US people. So much for a worker-centric trade policy.
There is one thing one would wish from any elected leader be he or she from the United States, Europe or elsewhere: please get an education in international law and read negotiated treaties. And you need to do another thing: take these agreements at their word and bring them to life.
What we have been served under Katherine Tai as USTR in the last four years is a simplistic ideology that is intrinsically hostile to the WTO, with an analysis of the world and the trading system that would not pass in exams for any undergraduate course in international economics, history or law.
That kind of world view is widespread but not worthy of a global superpower that created the system in the first place but now breaks it like a sulking child, scapegoating the world for its failure to keep its own house in order.
Iana Dreyer is founder and editor of Borderlex.
