WTO: Rush to Finalize E-Commerce JSI

The three co-conveners of the Joint Statement Initiative (JSI) on electronic commerce negotiations have released a fifth revised draft text. This version significantly dilutes the previously ambitious digital trade agreement, transforming it into a facilitation deal with proposals based on best endeavors, according to sources familiar with the new text.

After over six years of negotiations, the conveners are reportedly hastening to finalize a modest deal in time for the World Trade Organization's (WTO) 13th ministerial conference in Abu Dhabi early next year. The three conveners – Japan, Australia, and Singapore – and major industrialized nations, particularly the United States, announced the JSI on digital trade at the WTO's 11th ministerial conference in December 2017. Initially, the initiative promised to establish new global digital trade rules. However, the United States recently withdrew its ambitious proposals on cross-border data flows, computing facilities' location, and source code.

Brisk Pace

The JSI negotiations are advancing rapidly with the introduction of the new draft. Conveners seem intent on concluding the agreement to announce it alongside the JSIs on investment facilitation and domestic regulation in services at MC13. The success of these plurilateral deals hinges on achieving multilateral consensus under the WTO's Marrakesh Agreement, which governs the 164-member, rules-based, member-driven trade organization. Non-JSI members, India and South Africa, have expressed concerns about the JSIs violating core provisions of the Marrakesh Agreement, casting doubt on the passage of these agreements at MC13.

In their introduction to the revised draft, the co-conveners highlighted significant progress in negotiations throughout the year, with technical work completed on 12 articles and seven small groups, including Development and E-Payments, currently in progress. They described Rev.5 as a working document reflecting negotiation progress and stated it incorporates outcomes from small group discussions and additional member submissions. The draft is issued under co-convener responsibility and includes proposals not yet subject to small group negotiations in a separate annex.

Cross-Cutting Issues

The draft addresses several cross-cutting issues raised by Members during negotiations. These include security, general and prudential exceptions, and exclusions related to government procurement and services supplied in governmental authority exercise. Members also discussed the relationship of provisions with market access commitments, the legal architecture of the JSI outcome, and existing WTO agreements. The document is prepared on a without prejudice basis, and text not in square brackets does not indicate agreement or conclusion.

The 65-page draft comprises five sections: enabling electronic commerce, openness and electronic commerce, trust and electronic commerce, cross-cutting issues, telecommunications, and scope and general provisions. Notably, the first section covers various aspects of facilitating electronic transactions, including electronic authentication, signatures, contracts, invoicing, and payments. It also addresses digital trade facilitation and logistics, like paperless trading and single windows data exchange.

The second section deals with contentious issues like customs duties on electronic transmissions and internet access and data, including open government data. The fate of customs duties hinges on the e-commerce moratorium's continuation or termination at MC13, following the MC12 mandate.

Under trust and electronic commerce, topics include consumer protection, privacy, business trust, source code, cryptography in ICT products, and cybersecurity. The US withdrawal of source code proposals has seemingly weakened this section.

The cross-cutting issues section covers information flow, transparency, domestic regulation, cooperation, capacity building, and implementation periods for developing and least-developed countries. It also addresses special and differential treatment provisions for developing countries, including capacity building and technical assistance options.

Controversial elements in the scope and general provisions include the potential creation of a committee on trade-related aspects of electronic commerce, akin to the existing Committee on Trade-Related Aspects of Intellectual Properties.