How a TPP-Style E-commerce Outcome in the WTO would Endanger the Development Dimension of the GATS Acquis (and Potentially the WTO)

How a TPP-Style E-commerce Outcome in the WTO would Endanger the Development Dimension of the... Abstract The World Trade Organization (WTO) faces a watershed. Developed country Members want to abandon the Doha round and negotiate ‘new issues’, notably electronic commerce, as part of a broader US-led strategy to rewrite the global trade rules for the 21st century. Developing countries insist the Doha round be concluded before considering new issues and most reject the e-commerce agenda as foreclosing their options for digital development. This standoff dominated the MC11. The new e-commerce agenda has its genesis in the Trans-Pacific Partnership. Three factors complicate moves to export it to the WTO. First, those rules are blunt instruments designed to protect the first mover status and oligopolistic power of Big Tech. Second, they lack any development flexibilities or obligations. Third, their application to major developing country competitors and the potentially lucrative markets of larger developing countries requires multilateralization through the WTO, but that will be a highly contested process. That contest is now playing out through the plurilateral process announced by the e-commerce proponents during the MC11. The proposals assume a major expansion of Members’ commitments under the General Agreement on Trade in Services (GATS). Favourable interpretations of sectoral classifications, modes of trading services, and the application of technological neutrality to historical commitments would override the original GATS acquis that ensures developing countries can control their exposure, and seriously diminish their regulatory autonomy to maximize the opportunities of the digital economy and minimize the risks. Such an agenda could deepen the crisis at the WTO. The World Trade Organization (WTO) faces a watershed. For several years, developed country Members have signalled their intention to reshape the multilateral trading regime. Before the 10th ministerial conference in December 2015, the USA called for the Doha Development Round to be abandoned and for negotiating mandates on new issues.1 Pressure to move on from the Doha round in favour of new issues intensified before the 11th ministerial conference (MC11) in Buenos Aires, Argentina in December 2017.2 This article locates those moves within a broader US-led strategy to rewrite the global trade rules for the 21st century,3 which powerful developed countries have been pursuing through a raft of mega-regional and bilateral negotiations, and considers the implications for the WTO’s development acquis. Electronic commerce is paramount among the ‘new issues’ now slated for WTO negotiations. In 1998 the WTO established a Work Programme on Electronic Commerce ‘to examine all trade-related issues arising from electronic commerce, taking into account the economic, financial, and development needs of developing countries’.4 That was conducted through the councils for trade in goods, trade in services, trade-related intellectual property rights and the Committee on Trade and Development, supplemented by dedicated discussions at the General Council. Electronic commerce was narrowly defined as ‘the production, distribution, marketing, sale or delivery of goods and services by electronic means’.5 After a decade the Work Programme was moribund. In mid-2016 the USA, Japan, and the European Union (EU) led a concerted push in the WTO for formal negotiations on a broader digital agenda. Those and subsequent proposals were shaped by the US-led Trans-Pacific Partnership (TPP) agreement, concluded in late 2015. The US Trade Representative (USTR) described the TPP as ‘the most ambitious and visionary Internet trade agreement ever attempted’.6 That was not surprising. The text encapsulates the USTR’s Digital2Dozen principles that codify the US digital lobby’s demands. The TPP provided a precedent for other mega-regional and bilateral negotiations. Support from Japan and the EU, in particular, fostered the sense of an emerging global norm, and became more important when the US administration withdrew from an active leadership role in 2017. Moves to advance the e-commerce agenda in the WTO have been resisted by a majority of developing country Members, led by the African Group and the Least-Developed Countries (LDCs). They insist there can be no new issues until the Doha round has addressed the asymmetries of the existing WTO agreements, and reject the e-commerce proposals as foreclosing their options for digital development on a national and regional scale.7 A smaller group of Friends of E-commerce for Development has endorsed a development-oriented e-commerce agenda.8 However, the principal proposals have rarely offered more than development rhetoric and aid for trade to implement the developed country agenda.9 This standoff dominated the MC11. The conference ended in stalemate, without a formal Declaration. Ministers agreed by consensus to roll over the 1998 Work Programme.10 However, ministers representing 70 WTO Members,11 including the USA and a number of developing countries,12 announced that they would begin ‘exploratory work toward future WTO negotiations on trade-related aspects of electronic commerce’.13 The scene was set for a contest over the direction and control of the WTO, and the future of its development acquis. Section I of this article traces the genesis of the new e-commerce agenda from the original TPP and highlights three complicating factors. First, the TPP is a blunt instrument whose e-commerce rules were designed to protect the first mover status and oligopolistic power of Big Tech. Its novel e-commerce chapter is complemented by extensive rules and obligations on cross-border services, financial services, telecommunications, investment, and transparency. The total package imposes significant constraints on the regulatory authority of governments, irrespective of their levels of development, and includes matters that belong more to Internet governance, than to trade.14 While some developed countries have replicated much of the TPP template, its over-reach has been problematic even for some of them.15 Second, there is no pretence of a development agenda in those agreements that have followed the TPP approach. Third, the new e-commerce rules were targeted, at least in part, at developing countries that pose a significant competitive threat to the incumbents, notably China (see Gao, in this volume), or offer lucrative markets in Africa, Latin America, and Asia. But the current agreements do not apply to them. Multilateralization offers a way to achieve that, even if progress towards the end-goal has to be incremental. However, negotiating those rules through the WTO means that the process and mandate for negotiations, and any substantive rules, will be heavily contested. That contest has already begun to play out through the plurilateral process announced by the e-commerce proponents during the MC11. Section II of the article examines in more detail one of the key objectives of the e-commerce proposals: the substantial expansion of Members’ obligations and commitments under the General Agreement on Trade in Services (GATS).16 The lead proponents have previously tried and failed to achieve that in the GATS 2000 negotiations.17 Substantial new liberalization, especially in cross-border and digital services, needs to reconciled with the GATS acquis: the modalities of progressive liberalization and the hybrid architecture for scheduling each Member’s GATS commitments that allows countries to limit their obligations and control the pace of new liberalization. These flexibilities are supplemented by differential treatment that reflects a Member’s level of development. A likely strategy to bypass these structural obstacles involves reinterpreting Members’ existing GATS obligations on three unsettled matters: first, expanding the scope of the sectoral classifications that were used for scheduling in the early 1990s; second, blurring boundaries between the different modes of trading services on which governments have made commitments; and third, the notion that technological neutrality applies to schedules that were adopted in 1994 when the World Wide Web barely existed. None of these reinterpretations has a sound legal foundation. Moreover, any one of them would significantly alter the original bargain that developing countries made back in 1994 and seriously diminish their autonomy to regulate digital services in the future. The conclusion warns against history repeating itself. The digital economy offers opportunities and challenges for the developing world,18 which needs the space to maximize the benefits and minimize the risks. Legally and ethically, an e-commerce agenda should not proceed in the WTO unless the resolution of outstanding questions and the design of future rules accord with the development acquis. The current proposals for e-commerce are the antithesis of that: they would consolidate the dominance of developed countries and their corporations over the 21st century digital economy, just as the USA did with intellectual property rights and services in the Uruguay round. Such an outcome would deepen the crisis confronting the WTO. I. CONSTRUCTING THE DIGITAL TRADE AGENDA When the USA moved to put electronic commerce on the agenda of the newly-established WTO in 1998,19 the potential for the Internet and World Wide Web was embryonic. Few Members would have foreseen how digitization would revolutionize post-industrial capitalism, social engagement, knowledge creation and dissemination, as well as political and corporate power. Two decades later, the USA had developed a comprehensive legal template for governing the global digital domain on terms that were designed by and for the US tech industry. A. Big Tech’s influence The world’s largest companies by capitalization are Apple, Alphabet (the parent company of Google), Amazon, Microsoft, and Facebook.20 They and other Big Tech companies exercise oligopolistic power over the digital ecosystem, extending across data, platforms, payment systems, intellectual property, and the most lucrative market segments. Google, alone, controls five of the top six billion-user universal web platforms—search, video, mobile, maps, and browser—and leads in 13 of the top 14 commercial web functions.21 Industry players also dominate the current multi-stakeholder forums of Internet governance, alongside their governments.22 Their pre-eminence has been established under US domestic law that regulates telecommunications, but largely insulates the Internet from government intervention,23 and in the absence of any effective international, or in many cases domestic, competition law regime. As the corporate power of the tech lobby increased, they began intensely lobbying the USTR for global rules that would insulate them from intrusive regulation. The strategy of US companies to use trade agreements to shape foreign regulation of technology to their advantage dates back at least to the Uruguay round. Geza Feketekuty, who was Assistant USTR with responsibility for services from the late 1970s, identified two goals for what became the GATS: to pre-empt restrictive regulation of the technologies that were crucial to the transnational operation of capital, data and related services; and to secure a multilateral agreement on investment.24 The agenda was driven at that time by Wall Street. Peter Drahos and John Braithwaite in Information Feudalism document parallel pressure from the pharmaceutical and entertainment industries that resulted in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).25 More recently, the industry has wielded its influence on US trade negotiations in many ways. Google became the highest spender on lobbying of the US Congress in 2017.26 Tech industry players made up over a third of Team TiSA, a corporate lobby established to promote the plurilateral TiSA.27 They were granted privileged access to the US government individually and through overlapping industry lobby groups on various USTR and State Department advisory committees.28 There was also a classic revolving door. Most notably, Robert Holleyman was appointed Deputy USTR from 2014 to 2017 after twenty-three years as the President and Chief Executive of the BSA/Software Alliance,29 and established a Digital Trade Working Group in 2016. Under Holleyman’s leadership, the USTR formulated the Digital2Dozen principles for e-commerce negotiations,30 which mirror the industry’s published demands.31 The principles are couched in trade-agreement discourse, which pits freedom and choice against barriers, discrimination, and forced action: promoting a free and open internet; prohibiting digital customs duties; securing basic non-discrimination principles; enabling cross-border data flows; preventing localization barriers; barring forced technology transfers; protecting critical source code; ensuring technology choice; advancing innovative authentication methods; delivering enforceable consumer protections; safeguarding network competition; fostering innovative encryption products; building an adaptable framework for digital trade; promoting cooperation on cybersecurity; preserving market-driven standardization and global interoperability; eliminating tariffs on all manufactured products; securing robust market access commitments on investment and cross-border services, including those delivered digitally; ensuring faster, more transparent customs procedures; promoting transparency and stakeholder participation in the development of regulations and standards; ensuring fair competition with state-owned enterprises; promoting strong and balanced copyright protections and enforcement; advancing modern patent protection; combating trade secret theft; and recognizing conformity assessment procedures. B. The USTR’s promotion of digital norms The growing prominence of digital issues in the US trade agenda can be traced from their limited coverage in the Australia US Free Trade Agreement 2005 (AUSFTA)32 and the Dominican Republic-Central America Free Trade Agreement 2006 (CAFTA)33 to a more extensive e-commerce chapter in the US Korea Free Trade Agreement 2012 (KORUS).34 The TPP was the first agreement to fully reflect the Digital2Dozen principles. The comprehensive e-commerce chapter, and more extensive rules and commitments on cross-border services, financial services, telecommunications, and transparency, imposed severe constraints on the future regulation of the digital domain.35 Despite the involvement of several developing countries, there were no development flexibilities. Those texts and schedules remained intact in the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP), which the remaining 11 parties adopted after the USA withdrew from the TPP in January 2017. Ironically, the USA would still benefit from the implementation of the e-commerce rules without making any market access concessions in return.36 The USA proposed the same template for the TiSA Annex on Electronic Commerce.37 As with the TPP, that annex was complemented by other annexes on telecommunications, financial services and transparency, plus sectoral annexes, such as express delivery and air transportation. The leaked draft texts from the last round before the negotiations were indefinitely suspended showed broad acceptance of the US model, but disagreement on several important elements of the e-commerce annex, especially on cross-border data flows and privacy protections.38 The Digital2Dozen principles continued to inform US trade policy after the Trump administration quit the TPP. The USTR’s objectives for the renegotiation of NAFTA sought to largely replicated the TPP,39 which Mexico and Canada had already adopted as parties to the CPTPP. C. The limits of US-led norm creation The US embarked on a project of coalition building through the OECD, G7 and G20.40 Over time, the TPP template began to frame negotiations that did not involve the USA. Japan became its most active champion after the USA retreated from the TPP and active involvement in the WTO. The only TPP provision omitted from the Electronic Commerce chapter in Japan’s free trade agreement (FTA) with Mongolia was the obligation to allow cross-border movement of information.41 Mongolia had no experience in negotiating such agreements, and this one-sided FTA was concluded after a mere six rounds. The e-commerce obligations have no development flexibilities and there was no commitment to support Mongolia’s digital industrialization or bridge the digital divide. Japan also tabled TPP-style provisions in the Regional Comprehensive Economic Partnership (RCEP).42 As those negotiations involve 16 non-US countries, including China, India and three LDCs, the e-commerce negotiations made predictably slow progress. The EU’s approach was initially more cautious. The electronic commerce chapter in the Canada EU Comprehensive Economic and Trade Agreement (CETA) was limited.43 So was the EU’s e-commerce proposal for the Transatlantic Trade and Investment Partnership (TTIP) between the USA and EU, dated 2015.44 The finalized EU Japan Economic Partnership Agreement, published days before the MC11 in December 2017, was much closer to the TPP.45 The financial services section even included requirements to allow the cross-border transfer and processing of information, which had been omitted from the TPP on the insistence of the US Treasury.46 The major divergence was on the highly sensitive matter for the EU of data transfer and privacy protection. The parties agreed to reassess the need to include a provision on free flow of data within three years of the agreement coming into force.47 That would allow time to complete the approval of Japan’s privacy regime under the EU’s General Data Protection Regulation.48 By the time of the MC11, the USA had successfully seeded e-commerce as the major new issue in contemporary trade negotiations and established a precedent that served its strategic and corporate interests, eschewing any development dimension. However, those outcomes were secured through negotiations that the USA dominated or by like-minded developed countries. Achieving the goal of multilateralizing the e-commerce template through the WTO would be much more contested. D. Re-focusing on e-commerce in the WTO On 4 July 2016, the USA circulated a non-paper proposing 16 rules that were based on its Digital2Dozen principles.49 Soon afterwards Japan, supported by five other countries, tabled a paper entitled ‘Reinvigorating Discussions on Electronic Commerce’ with a list of questions that Members were invited to address.50 Japan then responded to its own questions with a paper that annexed a table showing the common e-commerce provisions in recent FTAs. Simultaneously, an EU-led group that included Canada, Chile, South Korea and Cote d’Ivoire, submitted an even more comprehensive paper.51 All reflected the TPP framework, to varying degrees. The EU-led group subsequently refined its position, reframing its proposal in less aggressive terms as ‘an enabling environment to facilitate online transactions’.52 Japan maintained its comprehensive demands.53 These proposals were directed towards securing a negotiating mandate at the MC11.54 They met sustained resistance from the African Group and the LDCs. The Africans hosted a forum in July 2017 to ‘scope the digital divide, industrial policy and catching-up in the digital economy’. The discussion concluded that ‘trading developmental policy space in this area could pose a serious threat for developing countries, and attempts to curtail this policy space would prevent developing countries from building the capacities, and skills to close the widening technological gap’.55 Later, the group insisted that the onus rested on those proposing a negotiating mandate to justify new rules that ‘would entrench existing imbalances and further constrain the ability of our governments to implement industrial policy and catch-up’.56 A counter-voice of developing countries called Friends for E-Commerce for Development held their first ministerial meeting in April 201757 (and co-hosted a workshop with the US National Foreign Trade Council58). Their position focused on practical matters of e-commerce readiness and strategy, ICT infrastructure, trade logistics, and payment systems, but they also called for ‘work on legal and regulatory frameworks’.59 In October 2017, group member Costa Rica circulated a draft ministerial decision that proposed an e-commerce for development agenda as an integral part of the 1998 work programme.60 As Henry Gao explains in his paper in this volume, China focused on more traditional e-commerce issues of cross-border customs facilitation.61 That reflects China’s Digital Silk Road strategy,62 which relies heavily on digital outreach through its own technology giant Alibaba. A partnership between the World Economic Forum, the Electronic World Trade Platform created by Alibaba’s founder Jack Ma, and the WTO was announced at the MC11.63 Russia and Brazil staked out their own, different positions, as did India.64 Immediately before the MC11, the EU-led group released a draft Ministerial Decision on Electronic Commerce that proposed a Working Party on Electronic Commerce with a mandate to ‘conduct preparations for and carry out negotiations on trade-related aspects of electronic commerce on the basis of proposals by Members’.65 Under Article III.2 of the Marrakesh Agreement Establishing the World Trade Organization, a negotiating mandate can only be granted in relation to matters dealt with under the existing Agreements, or that concern multilateral trade relations between Members if the Ministerial Conference so decides.66 Once it was clear that they would not secure such a mandate, Australia, Japan, and Singapore co-chaired a meeting ‘on the margins’ of the MC11 for ministers representing 70 WTO Members, including the USA and a number of developing countries. Their joint statement announced they would begin ‘exploratory work toward future WTO negotiations on trade-related aspects of electronic commerce’. Participation would be open to all WTO Members and ‘without prejudice to participants’ positions on future negotiations’67—wording that carefully finessed the Trump administration’s antipathy to the multilateral arena.68 In April 2018, the Secretariat circulated a series substantive proposals to advance that ‘exploration’.69 The status of those plurilateral discussions, whether the WTO Secretariat has any authority to support them, and their relationship to the 1998 Work Programme, go to core of the WTO’s constitution. Developing countries who oppose the e-commerce negotiations could be expected to insist that the WTO’s institutional rules are applied.70 II. THE THREAT TO THE GATS ACQUIS The contest over the broad e-commerce agenda will take some time to resolve. Meanwhile, the proponents are highlighting some matters that do not need a new mandate—notably the GATS-related aspects of the e-commerce proposals. However, those rights and obligations can only be rewritten with the consent of WTO Members. Most developing countries remain resistant to any such moves, especially outside the comprehensive undertaking of the Doha round. They find crucial support for this position in the structural framework of the GATS, which enables them to control their exposure to the GATS rules and forms a crucial part of the GATS acquis. A. The GATS acquis The ‘GATS acquis’ refers to ‘what has been acquired or achieved so far’.71 The Uruguay round negotiations on services were hard fought. There were many concessions and compromises.72 Developing countries, led initially by India and Brazil, insisted on retaining some control over their exposure to rules which they believed were skewed in favour of wealthy countries and multinational corporations. The notion of a mutually beneficial bargain was fundamental to the final consensus. That bargain pivots on the concept of progressive liberalization under GATS Part IV, to be achieved through the periodic negotiation of sectoral commitments through an exchange of requests and offers. The final balance of the concessions is set out in schedules that define the Member’s legal obligations. Progressive liberalization and request and offer bargaining over schedules clearly imply that Members are only bound by what they could foresee at the time of negotiating their commitments. The Agreement explicitly requires asymmetries in favour of developing countries when reaching that bargain. Article IV.3 and Article XIX.3 require particular sensitivity to the serious difficulties of LDCs in ‘accepting negotiated specific commitments in view of their special economic situation and their development, trade and financial needs’. That instruction was strengthened by Paragraph 26 of the Hong Kong ministerial declaration 2005,73 which acknowledged that LDCs are not expected to undertake new commitments in the Doha round. The GATS Article V sets conditions before regional trade agreements, including plurilaterals such as TiSA, can be exempted from Article II (most-favoured-nation treatment). These conditions include mandatory flexibility in favour of developing countries in meeting the requirement for liberalization of substantial sectoral commitments, in accordance with their level of development. That requirement is routinely ignored, with developing countries making by far the higher levels of new liberalization in FTAs with developed countries.74 Likewise, the Guidelines on LDC Accession adopted by the General Council in 200275 require Members to ‘exercise restraint’ in seeking market access concessions from acceding LDCs, taking into account those of existing LDCs, in return for offers of ‘reasonable’ concessions ‘commensurate with their individual development, financial, and trade needs’. That obligation has consistently been honoured in the breach.76 In addition, Article IV requires developed countries to make commitments in activities of commercial interest to developing countries, with special attention to LDCs. There is minimal evidence of that occurring, especially on the principal demand for commitments on the temporary movement of natural persons (mode 4). A further unfulfilled promise in the GATS is the obligation on Members in Article X to agree on safeguards by three years after the GATS’ entry into force. That was the only one of four unfinished provisions that had a deadline for completion in the text.77 The deadline was extended five times, most recently in 2004 with no specified end date.78 It has become a phantom obligation.79 Emad Tinawi and Judson Berkey have suggested that preserving Members’ regulatory space and freezing the scope of existing commitments provides a disguised safeguard regime for e-services.80 But, as explained below, that protection is at risk, too. B. Development and e-commerce in the GATS The importance of honouring the acquis was recognized in the early in the discussions on e-commerce. In 2000 Aaditya Mattoo and Ludger Schuknecht acknowledged the GATS as the most relevant trade regime to e-commerce and that the agreement allows Members to decide what commitments to make on market access and national treatment.81 Many had, and still have, not done so in a large number of services sectors where electronic delivery is feasible. That is their right under the GATS. Other academics who advocated for the e-commerce agenda in the context of the GATS 2000 round also recognized the need to respect the GATS acquis. Tinawi and Berkey proposed four criteria that any solution to e-commerce should meet: allow for the expansion of e-Services; be unambiguous and transparent; not change the bargains struck within the existing GATS commitments; and not require a substantial rewriting of the GATS.82 In stark contrast, the USA raised the potential ‘shortcomings of traditional approaches’ in a paper tabled shortly after the Work Programme on e-commerce was established in late 1998 and asserted the most positive possible interpretation of the GATS.83 The USA claimed that all service sectors were already covered by the GATS—although it might be useful for Members’ to review the extent of their and others’ commitments. There was ‘no question’ that commitments encompassed delivery of services through electronic means, ‘in keeping with the principle of technological neutrality’.84 The moratorium on customs duties on electronic transmissions, adopted at the second WTO ministerial conference in 1998, should be made permanent. Other parts of the paper addressed services classifications, procurement, intellectual property, domestic regulation, standards, and access to and use of telecommunications networks. As for the development acquis, the USA assured developing countries they could ‘“leap frog” into the information age’ by liberalizing market access and adopting strategies to attract investment in building an infrastructure.85 The USA reiterated this interpretation in the paper tabled as part of the plurilateral ‘explorations’ in April 2018: The services classifications that form the basis for specific commitments under the GATS are seriously outdated, particularly for communications services. Countries should agree that old classifications and commitments can apply to new technologies. Further, new commitments should allow for the cross-border supply of Internet-enabled services that compete against traditional communication services.86 This suggests the extension of Members’ 1994 obligations through three techniques: an expansive reading of services classifications, the blurred borderline between supplying services through mode 1 (cross-border services) and mode 2 (consumption abroad), and assertions of the technological neutrality of commitments.87 Such a reinterpretation of the GATS rules and schedules strikes at the heart of the development acquis. The negative impacts will be most significant for developing countries, and especially LDCs, given the systemic asymmetries of the digital ecosystem and the often-rudimentary state of their regulatory regimes in addressing the rapidly evolving digital environment. C. Services classification To argue that all services are covered by the GATS would invest the existing classifications with content that the Members never envisaged when their commitments were first made. A Member’s commitments are defined in its GATS schedule on a sectoral basis. For their GATS 1994 schedules, most Members used the WTO classification list (W/120),88 which has 12 headings and over 160 subheadings that are linked to the UN Provisional Central Product Classification (UNCPC) 1991. The W/120 list and its UNCPC descriptors reflect the scope of public and commercial services three decades ago. Both are seriously outdated.89 However, changing to an updated version would require renegotiation of the 1994 schedules to ensure the balance of the original bargain has not changed. No one seems to be suggesting that as a viable solution. One argument might be to read the UNCPC descriptions to include new services in categories of substantive services, such as financial, professional, distribution, education, and tourism services, even if they did not exist in 1994. Alternatively, commitments to a means of delivering a service, such as computer and related services, could apply to everything deliverable by that means. Around half the WTO’s Members,90 and one quarter of developing countries,91 made full or partial commitments on cross-border supply of Computer and Related Services in 1994. Given how ubiquitous digital delivery has become, applying those commitments to all digitally-delivered services in 2018 or 2030 would mean de facto universal exposure. A third option arises where Members have made commitments to the opaque or open-ended classification of ‘other’ services, including communication and distribution services. However, Mattoo and Schuknecht observed that a positive listing approach makes it ‘questionable whether the “other” category that exists within most clusters of services activities could legitimately be considered to encompass new services’.92 In addition to their development impacts, all three options oversimplify the problems of categorization. Digital activities are highly fungible. Tech firms are notorious for designating their activities strategically for tax, labour, and regulatory purposes. Do Uber, Google, Expedia, or Airbnb supply a computer service, and/or a transportation, advertising, travel agency or accommodation service respectively? Is additive manufacturing or 3D printing a ‘digitally delivered design service rendered into a product in the country of delivery’, as the OECD suggests?93 If so, it potentially falls within the commitments on cross-border supply of design, software engineering, marketing, advertising, printing, and/or distribution services.94 D. Modes 1 and 2 There is no easy solution to the classification problem. But it is compounded by uncertainties over the different modes of delivering digitized services in these sectoral categories. The GATS 1994 was an experiment. That includes the identification of four modes for ‘trading’ services.95 Members could make different commitments for each mode of supplying each service subsector. According to the original scheduling guidelines, Mode 1 (cross-border delivery) applied to delivery of a service to a consumer located in one country by a supplier located in another through mediums such as post, telephone, or transportation. Under Mode 2 (consumption abroad) the service was supplied to the consumer offshore, such as overseas tourist or having a ship repaired in a foreign country.96 The functional distinction between the two modes has never been clear-cut. For example, a funds transfer from one country to another is mode 1, but the operation of the foreign bank account in which the funds are then held, invested and earn interest is mode 2. Digital trade and supply chains blur the modal boundary even further.97 The Scheduling Guidelines,98 and their revised version in 2001,99 provide detailed but non-binding guidance to Members. The 1993 guidelines advise that: ‘Where a service transaction requires in practical terms the use of more than one mode of supply, coverage of the transaction is only ensured when there are commitments in each relevant mode of supply.’100 Think of Amazon: the purchase and payment may be entirely within the country or across the border; Amazon’s own purchasing arrangements may be local or from a range of countries; delivery to the customer could be through a national or foreign-owned establishment or from across the border. Do the guidelines mean the GATS rules do not apply to an Amazon transaction unless all subsectors are committed? Or must regulators be able to disaggregate each phase of these complex transactions to know what obligations apply? Such complexities were not given much attention when the GATS was first designed, because the main demands and defensive interests centred on rights of foreign establishment (mode 3). That lack of clarity now has serious legal implications. A modal analysis of Members’ original GATS commitments shows very high levels of full commitments in mode 2, and an almost equivalent lack of commitments in mode 1.101 Classifying a transaction as mode 2 rather than mode 1 would therefore expand a country’s commitments significantly.102 Tinawi and Berkey described suggestions that such redefinitions would advance the progressive liberalization objectives of the GATS as ‘troublesome’, saying it would ‘alter by fiat the GATS commitments that countries made during the Uruguay round and subsequent accession negotiations’. Furthermore, countries may have made full commitments to mode 2 on the assumption they had no ability to control their offshore consumption. Expanding that ‘may again constitute a renegotiation of the GATS commitments’.103 The consequences would be: tantamount to changing the deals reached among countries without further trade negotiations. This seems contrary to GATS itself which calls for ‘successive negotiations with a view to promoting the interest of all participants on a mutually advantageous basis and to securing an overall balance of rights and obligations’.104 E. Technological neutrality105 The most troubling and self-serving of the proponents’ arguments is that technological neutrality applies to scheduled commitments. That would mean commitments negotiated in the early 1990s that came into force in 1995 would apply, whatever new technology is used to deliver the service, even if the technology was totally unforeseeable and the government would not have made the commitment, or would have limited its application, if it had known. There is no credible source to support the concept. The GATS scheduling guidelines advise Members who inscribe mode 1 as ‘Unbound due to technical infeasibility’ that the entry reverts to being Unbound if cross-border delivery of the service becomes feasible.106 That is consistent with the presumption that governments are only bound by what they could foresee. The guidelines make no corresponding reference to technological neutrality. In contrast, technological neutrality is explicitly applied in the e-commerce chapters of recent US FTAs, notably the KORUS, CAFTA, and AUSFTA: The Parties affirm that measures affecting the supply of a service delivered or performed electronically are subject to the obligations contained in the relevant provisions of Chapters … (Investment, Cross-Border Trade in Services, and Financial Services), which are subject to any exceptions or non-conforming measures set out in this Agreement that are applicable to such obligations.107 That provision would be unnecessary if there was a genuine consensus that technological neutrality applies to commitments in trade in services schedules. Even with a negative list approach to scheduling in those agreements, the USA felt it necessary to apply the principle explicitly. Mattoo and Schuknecht have identified three further legal arguments why the principle of technological neutrality ‘cannot be taken for granted’.108 First, classifications under the UNCPC sometimes provide exhaustive definitions of the means of delivery, meaning they are not technology neutral.109 Second, the moratorium on customs duties on electronic transmissions treats the electronic delivery of software services differently from the delivery of software services through another means, such as postal delivery. That undermines the notion of technological neutrality and the presumption of ‘likeness’ required for national treatment of services. Third, the extended Uruguay round negotiations on telecommunications that were concluded in 1997 stated explicitly that technological neutrality applied. This resulted from an interpretive note proposed by the Chair of the Group on Basic Telecommunications that said the listed services could be applied through any technology. The group adopted the chair’s report and it was attached to its report to the CTS.110 There is no equivalent statement for the GATS. Even then, the Chair’s note says that it was not intended to have or acquire any binding legal status.111 However, the most compelling rebuttal to claims of a consensus over technological neutrality comes from the Members themselves. As early as 1999, the US was asserting that ‘there should be no question that where market access and national treatment commitments exist, they encompass the delivery of services through electronic means, in keeping with the principle of technological neutrality’. It was less certain about the state of ‘new services’.112 The same year Australia unsuccessfully proposed that the Seattle ministerial declaration should ‘reiterate the precept of technological neutrality which applies to commitments made under the GATS’.113 The WTO Secretariat has consistently boosted such claims. A note from a meeting of the Council on Trade in Services [CTS] in December 1998 recorded that: On the basis of the informal meeting the Chairman provided the following summary under his own responsibility: … Members agreed that the GATS applied to all services regardless of the means of technology by which they were delivered (emphasis added). This was further reinforced by the fact that in no area of the WTO were there different rules for different techniques of delivery. It was noted that the principle of technological neutrality also applied to scheduled commitments, unless the schedule specified otherwise: it was therefore possible for Members to schedule commitments in a non-technologically neutral manner. It was suggested that consideration should be given to how technological neutrality in electronic commerce would apply to existing commitments and to certain new services.114 Neither the WTO Secretariat, nor the chair in an informal meeting, has authority to interpret the GATS text. Moreover, the minutes of the CTS meeting actually said: ‘Several delegations said that it was important to affirm the technological neutrality of the GATS, but some delegations wished to see more discussion of this notion’115 (emphasis added). As recently as 2014 the Secretariat referred to this document again when asserting that ‘the principle of technological neutrality had been established for quite some time’.116 And in 2015, the Secretariat inaccurately noted ‘a report of the Services Council, contained in document S/L/74 dated 27 July 1999, which examined how different GATS provisions would apply to e-commerce. It was there that Members had agreed to the concept of technological neutrality’.117 These positions appear disingenuous, especially from a purportedly independent Secretariat, in the face of abundant WTO documentation that there is no consensus on the issue. The draft Interim report of the CTS meeting on 9 February 1999 actually said that ‘Members generally agreed that the principle of technological neutrality applied to GATS commitments, … including electronic means’118 (emphasis added). The report of its meeting in June 1999 again reported the chair’s comments: In summarising the outcome of previous discussions, the Chairman recalled that delegations generally agreed that the principle of technological neutrality applied to specific commitments and underlined that it was important not to undermine existing commitments by suggesting that electronic delivery of services was not covered by the GATS. However it had been pointed out that it was necessary to discuss how restrictions on the technical means of delivery should be treated. The emergence of electronic commerce should not provide a reason to schedule new restrictions. Rather, the specification of some modes in the schedules as unbound due to lack of technical unfeasibility may need to be reviewed in the light of technological developments119 (emphasis added). The WTO’s records show that India had insisted at the same meeting that ‘it could not be presumed that the principle of technological neutrality applied automatically to all specific commitments of Members, as this would have legal and political consequences arising out of negotiations in the Uruguay Round and resulting commitments. According to India a full consideration of the negotiating history of the GATS would be useful in this respect’120 (emphasis added). Again, the progress report from the Work Programme on Electronic Commerce to the General Council, adopted by the CTS on 19 July 1999, records that ‘[s]ome delegations expressed a view that these issues were complex and needed further examination’121 (emphasis added). This note was quoted by the panel in US–Gambling when it remarked that the principle of ‘technological neutrality … seems to be largely shared among WTO Members’122 (emphasis added). The Council’s report on the e-commerce discussions from March 1999 referred to it as an issue on which a common understanding ‘appeared to be emerging’ (emphasis added). It went on to suggest, without substantiation, that the technological neutrality of the Agreement would ‘mean that electronic supply of services is permitted by specific commitments unless the schedule states otherwise’.123 India recorded its dissent in various other WTO forums where e-commerce was being discussed. In the Committee on Trade and Development in December 2000, India’s representative objected to statements in briefings on e-commerce by the Secretariat (and international organizations), saying: … she had heard it stated that the GATS guaranteed the right to do business electronically, that this was neither accidental nor incidental, and that this had been in the mind of some negotiators involved in the GATS. She had also heard it said that technological neutrality was fundamentally important and that this was an issue which had emerged from the work programme. She said that she had revisited the reports made by the subsidiary bodies to the General Council, and could not find any agreement by Members that these were conclusions that had been collectively reached124 (emphasis added). In May 2001, a communication to the General Council from Mercosur regarding the Work Programme on e-commerce set out a number of horizontal and sectoral issues that required more analysis. The list included ‘the scope of the GATS with respect to the electronic delivery of services, in particular the issues relating to the so-called concept of technological neutrality of the Agreement and the distinction between modes of supply 1 and 2’.125 Venezuela echoed that call, on behalf of a number of Latin American countries.126 At the following General Council meeting Saint Lucia ‘challenged the notion of technological neutrality, as it could have far-reaching impact on future commitments, including across-the-board adoption of commitments in terms of the removal of barriers, the extension of commitments in one sector to a complimentary [sic] sector, or the adoption of regulatory principles without regard to the discretion built into the GATS’.127 Several months later Cuba stressed the development implications of the interpretation.128 Similar dissent was recorded in relation to financial services. India advised the Committee on Financial Services in 2001 that ‘its capital was in the process of examining the issue of technological neutrality vis-à-vis financial services’, and that ‘India’s preliminary view was that given the bottom-up approach of the GATS, the commitments for new services delivered through new technologies would have to be taken afresh and existing commitments would not apply to them’.129 Several years later, Uruguay rebutted an assertion from Switzerland that ‘[e]ven though there was no precise reference to technological neutrality in the GATS, that was assumed by the Agreement’. Uruguay said ‘the concept of “technological neutrality” was not in the GATS. That was a legal interpretation by the Swiss delegation, but there was no agreement among Members on that issue’.130 The Philippines131 and Malaysia132 supported Uruguay. Technological neutrality, and the problems with classifications and modes, are serious legal quandaries. Technologies have transformed the realities of the services to which the GATS applies. But those technologies are not development neutral. Nor are the foreign suppliers of those services. The digital domain is not a level playing field. An expansion of commitments on market access or national treatment based on a reinterpretation of classifications or modes, let alone technological neutrality would seriously violate the foundations of the agreement itself. Brazil acknowledged this in its paper tabled in April 2018: ‘it seems unreasonable to assume that commitments undertaken by Members in the early 90's can be automatically extended, under the technological neutrality argument, to cover the completely new and revolutionary businesses models based on digital environment.’133 How might this quandary be resolved? The legal answer rests in the Marrakesh agreement, which sets out a process for resolving matters of interpretation.134 That process has not been pursued to clarify the meaning of any contested provisions in the GATS. Brazil has suggested a technical solution, where existing commitments are not subject to technological neutrality, but new commitments would be. The political answer lies, as it always has in the WTO, with the construction of consensus. That will not be achieved through unilateral assertions that defy both legal logic and the official record. It requires a bone fide commitment to address the new realities of the digital domain in ways that pay more than lip service to the development acquis. III. WHERE TO FROM HERE? The WTO has become paralysed, for good reason. Its foundations were laid by powerful states who sought a system of global rules that would benefit their strategic and commercial interests. They promised developing countries that multilateralism would blunt the abuse of raw power by establishing a rules-based system that was negotiated on the basis of equality between states and conducted through consensus decision-making. They dictated the Uruguay round agenda and the outcomes on agriculture, textiles, intellectual property rights and services, among others. In return, developing countries secured concessions within those parameters, with the prospect that future negotiations might rebalance the embedded asymmetries. The Doha ‘Development’ Round was meant to do that, at least in part. It has not. Now the same powerful players want to bury the Doha round and to negotiate new rules on e-commerce that serve their current strategic, economic, and corporate interests. Importing such rules into the WTO could herald a transformation of the WTO that is as radical as the Uruguay round was for the General Agreement on Tariffs and Trade when it concluded more than twenty years ago. They are facing a principled response from a majority of developing countries for whom the stakes are high enough to resist. Electronic commerce is fast becoming a proxy battleground for the future of the WTO. The formal mandate of the Work Programme and the informal WTO and GATS acquis require a genuine commitment to advancing development. To date, the WTO has not lived up to that. Nor will a TPP-style e-commerce agenda. If the WTO is to survive as a multilateral institution, that mandate and acquis must drive, and circumscribe, the e-commerce agenda, including in the GATS. In the words of the African Group leading into the MC11: The centrality of development in the WTO is the raison d’être of our Membership. Indeed, we expect that development, in particular Special and Differential Treatment provisions, remain at the core of both existing and future WTO Agreements.135 WTO Members need to reflect on this observation as the pressure mounts to redefine and expand their GATS obligations in the name of e-commerce. They have three choices. They can address the unresolved questions and unfinished business of the GATS in a manner that is faithful to its development acquis. The current stalemate can remain, recognizing that ambiguities carry legal risks but also leave some space to move. Or the dominant players can assume that the WTO should and will remain an arena where their voice prevails and they alone can exercise a veto. If they choose the latter they will jeopardize the future of the WTO. Funding This research was partially supported by a Marsden Fund grant from the Royal Society of New Zealand and a travel grant from the IDB-INTAL to present the paper at the MC11 think Track in Buenos Aires in December 2017. Footnotes 1 Shawn Donnan, ‘US calls time on Doha trade negotiations’, Financial Times, 13 December 2015, https://www.ft.com/content/2f9a7ee4-a190-11e5-bc70-7ff6d4fd203a (visited 10 February 2018). 2 ‘The Road to the 11th Ministerial Conference, 10-13 December 2017, Buenos Aires, Argentina’, South North Development Monitor, 13 December 2017, https://www.twn.my/MC11.htm (visited 10 February 2018). 3 See ‘President Obama: Writing the rules for 21st century trade’, 18 February 2015, https://obamawhitehouse.archives.gov/blog/2015/02/18/president-obama-writing-rules-21st-century-trade (visited 10 February 2018). 4 Work Programme on Electronic Commerce. Adopted by the General Council on 25 September 1998, WT/L/274, 30 September 1998, pursuant to the Ministerial Declaration on Global Electronic Commerce, adopted on 20 May 1998, WT/MIN(98)/DEC/2. 5 WT/L/274, para 1.3. 6 USTR (2016), The Trans-Pacific Partnership, https://ustr.gov/sites/default/files/TPP-Ensuring-a-Free-and-Open-Internet-Fact-Sheet.pdf (visited 10 February 2018). 7 See, for example, Republic of Rwanda (2017), National Data Revolution Policy, April 2017, and more generally, African Union Commission (2015), Agenda 2063. Framework Document. The Africa We Want, September 2015. 8 The WTO lists the group members as Argentina, Chile, China, Colombia, Costa Rica, Kazakhstan, Kenya, Mexico, Moldova, Montenegro, Nigeria, Pakistan, Sri Lanka, and Uruguay. https://www.wto.org/english/thewto_e/minist_e/mc11_e/briefing_notes_e/bfecom_e.htm (visited 10 February 2018). 9 For example, General Council, Work Programme on Electronic Commerce. Trade Policy, the WTO and the Digital Economy. Communication from Canada, Chile, Colombia, Côte d'Ivoire, the European Union, the Republic of Korea, Mexico, Montenegro, Paraguay, Singapore and Turkey, JOB/GC/116, 13 January 2017, p. 6. 10 Work Programme on Electronic Commerce. Ministerial Decision of 13 December 2017, 18 December 2017, WT/MIN(17)/65. 11 The EU and its Member States constituted 29 of the 70 signatories. 12 In addition to the Friends group, developing country signatories included Bahrain, Brazil, Brunei, Cambodia, Guatemala, Lao, Malaysia, Myanmar, Panama, Peru, Qatar, and Turkey. 13 Joint Statement on Electronic Commerce, 13 December 2017, WT/MIN(17)/60. 14 For example, provisions on disclosure of source codes, network management practices, and unsolicited messages or spam. 15 Notably the privacy concerns of the EU. See European Union (2017), Communication on Exchanging and Protecting Personal Data in a Globalised World, COM(2017). 16 General Council, WTO Negotiations on Trade-related Aspects of E-Commerce. Elements of a Potential Approach Under the Framework of the Joint Statement on Electronic Commerce. Communication from Argentina, Colombia and Costa Rica, JOB/GC/174, 6 April 2018, para 3, calls for ‘bindings of market opening in e-commerce-related sectors of trade in goods and services’ (original emphasis). 17 Jane Kelsey, ‘From GATS to TiSA. Pushing the Trade in Services Regime beyond the Limits’, in Marc Bungenberg et al. (eds), European Yearbook of International Economic Law (2016) 119–51, at 130–34. 18 There is a growing and contested literature on the development impacts of the new e-commerce template, specific trade impacts for service-intensive goods and the fiscal consequences of a permanent ban on customs duties for electronic transmissions. E.g. Rashmi Banga, Rising Product Digitalisation and Losing Trade Competitiveness (2017), UNCTAD/GDS/ECIDC/2017/3; Rashmi Banga, Permanent Moratorium, Trends in Cross-Border E-Commerce and Internet Governance (London: Commonwealth Secretariat, 2017); Abhijit Das, WTO Negotiations on E-Commerce: Uncertain Gains but Certain Losses for Developing Countries (New Delhi: Centre for WTO Studies, 2017); Alberto Lemma, E-commerce: The Implications of Current WTO Negotiations for Economic Transformation in Developing Countries (London: Supporting Economic Transformation, 2017); Biswajit Dhar, Electronic Commerce and the WTO: The Changing Contours of Engagement (Madhyam Briefing Paper #21, New Delhi, 2017); Jane Kelsey, The Risks for ASEAN of New Mega-Agreements the Promote the Wrong Model of e-Commerce (ERIA Discussion Paper Series ERIA-DP-2017-10, 2017) 17–18 and Table 1; Parminder Jeet Singh, Digital Industrialisation in Developing Countries: A Review of the Business and Policy Landscape (London: Commonwealth Secretariat, 2017); Parminder Jeet Singh, Report on Developing Countries in the Emerging Global Digital Order – a Critical Geopolitical Challenge to which the Global South Must Respond (New Delhi; South Centre: IT for Change, 2017), ‘WTO MC11: Issues at Stake for Developing Countries, Informal Note on MC11’, 6 November 2017; Kati Suominen, ‘Fuelling Trade in the Digital Era. Policy Roadmap for Developing Countries’ (Geneva: International Centre for Trade and Sustainable Development (ICTSD), 2017). 19 General Council, Global Electronic Commerce. Proposal by the United States, WT/GC/W/78, 9 February 1998. The USA proposed the permanent absence of customs duties on electronic transmissions. 20 PWC, ‘Global Top 100 Companies by Market Capitalization’, 31 March 2017, https://www.pwc.com/gx/en/audit-services/assets/pdf/global-top-100-companies-2017-final.pdf (visited 10 February 2018). 21 Jonathan Taplin, Why is Google Spending Record Sums Lobbying Washington?’, The Guardian, 30 July 2017, https://www.theguardian.com/technology/2017/jul/30/google-silicon-valley-corporate-lobbying-washington-dc-politics (visited 10 February 2018). 22 Jeremy Malcolm, Is Multi-Stakeholder Internet Governance Dying?, 20 December 2017, https://www.eff.org/deeplinks/2017/12/multi-stakeholder-internet-governance-dying (visited 10 February 2018). 23 The stated goals of the US Telecommunications Act of 1996 (Code 47 U.S.C.¶230(b)) are to ‘promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of telecommunications technologies’ but to ‘preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation’. 24 Interview quoted in Jane Kelsey, Serving Whose Interests? The Political Economy of Trade in Services Agreements (London: Routledge, 2008) 157–58. 25 Peter Drahos and John Braithwaite, Information Feudalism. Who Owns the Knowledge Economy? (New York: The New Press, 2003). 26 Shamel Azmeh and Christopher Foster, ‘The TPP and the Digital Trade Agenda: Digital Industry Policy and Silicon Valley’s Influence on New Trade Agreements’ (London School of Economics, Working Paper Series 2016, No. 16-175); Alana Abramson, ‘Google Spent Millions More Than its Rivals Lobbying Politicians Last Year’, Time Magazine, 24 January 2018, http://time.com/5116226/google-lobbying-2017/ (visited 10 February 2018). 27 The Team Tisa website is no longer functional, presumably because TiSA negotiations that were launched in 2013 have been suspended since November 2016. For a list of the Team TiSA members by sector see Jane Kelsey, TiSA - Foul Play (Brussels: UNI Global Union, 2017) 20, Table 2.2. 28 For example, the USTR Advisory Committee on Trade Policy and Negotiations, USTR Advisory Committee on Intellectual Property, the Industry Trade Advisory Committee on Information and Communications Technologies, Services and e-Commerce, and the US State Department's Advisory Committee on International Communications and Information Policy, https://ustr.gov/about-us/advisory-committees (visited 10 February 2018). 29 Crowell Moring, ‘Robert Holleyman’ (2017), https://www.crowell.com/Professionals/Robert-Holleyman 30 USTR, The Digital 2 Dozen, 13 April 2016, https://ustr.gov/sites/default/files/Digital-2-Dozen-Final.pdf (visited 10 February 2018). 31 An open letter dated 17 October 2016 was signed by seven groups: the Internet Association, Computer and Communications Industry Association, Information Technology Industry Council, BSA/Software Alliance, ACT/The App Association, Consumer Technology Association, https://internetassociation.org/tisa101716/. Another open letter from the Internet Association to Hon Robert Lighthizer was dated 16 May 2017, https://cdn1.internetassociation.org/wp-content/uploads/2017/05/Lighthizer-Letter-5.16.pdf (visited 10 February 2018). 32 The Australia—United States Free Trade Agreement, Entered into force on 1 January 2005. Chapter 16 of the AUSFTA is similar to KORUS, but significantly has no provisions on principles of access to and use of the Internet for electronic commerce or on cross-border information flows. 33 The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA/DR) first entered into force between the USA and El Salvador on 1 March 2006. Chapter 14 covers: electronic supply of services (technological neutrality); non-discrimination and no customs duties on digital products; transparency; and cooperation. 34 The US Korea Free Trade Agreement, Entered into force 15 March 2012 (KORUS). Chapter 15 covers: electronic supply of services (technological neutrality); non-discrimination and no customs duties on digital products; electronic authentication and signatures; online consumer protection; paperless trading; principles of access to and use of the Internet for electronic commerce; and cross-border information flows. 35 The TPP chapter on electronic commerce, inter alia, prohibits requirements that data are held locally and for the use of local computing facilities or content, the disclosure of source codes and the sharing of digital technology, alongside matters of Internet governance such as network management practices and unsolicited messages or spam. Complementary chapters of the TPP prohibit requirements for cross-border service suppliers to have local presence, albeit subject to reservations, and deepen regulatory constraints on financial services and telecommunications. Government are required to consult on new regulations with other the parties and their ‘interested persons’. 36 Twenty-three items of the original TPP were suspended. See Annex, Comprehensive and Progressive Agreement on Trans Pacific Partnership, 2017, https://www.mfat.govt.nz/assets/CPTPP/Comprehensive-and-Progressive-Agreement-for-Trans-Pacific-Partnership-CPTPP-English.pdf (visited 10 February 2018). The six ratifications required for entry into force were expected in early 2019. 37 Agreed article headings were: movement of information; online consumer protection; personal information protection; unsolicited commercial electronic messages; transfer or access to source code; open networks, network access and use of the Internet; location of computing facilities; electronic authentication and electronic signatures; customs duties on electronic transmissions; interactive computer services; international cooperation; security (not agreed). TiSA, draft Annex on Electronic Commerce, undated (November 2016), http://www.bilaterals.org/?tisa-draft-annex-on-electronic-32465 (visited 10 February 2018). 38 Art. 4. TiSA, draft Annex on Electronic Commerce, undated (November 2016). 39 These proposals were principally set out under the headings ‘Trade in Services, Including Telecommunications and Financial Services’, ‘Digital Trade in Goods and Services and Cross-border Data Flows’ and ‘Intellectual Property’. USTR, ‘Summary of Objectives for the NAFTA Renegotiation’, 17 July 2017, pp. 7–8, https://ustr.gov/sites/default/files/files/Press/Releases/NAFTAObjectives.pdf (visited 10 February 2018). 40 OECD, Principles for Internet Policy Making (Paris: OECD, 2014); G7, Principles and Actions on Cyber (2016); G20, Digital Economy Development and Cooperation Initiative (China: Hangzhou, 2016). 41 The Japan Mongolia Economic Partnership Agreement, Entered into force 7 June 2016. 42 Kelsey, above n 18. 43 Chapter 16, The Canada European Union Comprehensive Economic and Trade Agreement, signed on 30 October 2016 and provisionally entered into force on 21 September 2017. 44 The European Union proposal for Trade in Services, Investment and E-commerce: Chapter VI—Electronic Commerce, Tabled 12–17 July 2015 and published on 31 July 2015. http://trade.ec.europa.eu/doclib/docs/2015/july/tradoc_153669.pdf (visited 10 February 2018). 45 The EU Japan Economic Partnership Agreement: texts of the agreement, published 8 December 2017, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1684 (visited 10 February 2018). 46 EU Japan Economic Partnership Agreement, Section E, Subsection 5, Art. 6: Transfer of Information and Processing of Information. 47 Chapter 8, Art. 12; see European Union, Communication on Exchanging and Protecting Personal Data in a Globalised World, COM(2017). 48 Yumi Watanabe, ‘Japan-EU Data Transfers – Mutual adequacy findings under the APPI and GDPR’, 1 March 2018, Baker McKenzie, https://www.lexology.com/library/detail.aspx?g=9579f338-9fc3-4870-9520-f086d1a82584 (visited 10 February 2018). 49 General Council, Work Programme on Electronic Commerce. Non-Paper from theUSA, JOB/GC/94, 4 July 2016. The proposed rules covered: prohibiting digital customs duties; securing basic non-discrimination principles; enabling cross-border data flows; promoting a free and open internet; preventing localization barriers; barring forced technology transfers; protecting critical course code; enduring technology choice; advancing innovative authentication methods; safeguarding network competition; fostering innovative encryption products; building an adaptable framework for digital trade; preserving market-driven standardization and global interoperability; ensuring faster, more transparent customs procedures; promoting transparency and stakeholder participation in the development of regulations and standards; recognizing conformity assessment procedures. 50 General Council, Work Programme on Electronic Commerce. Reinvigorating Discussions on Electronic Commerce. Circulated at the request of Japan, JOB/GC/96/Rev 1, 14 July 2016. 51 General Council, Work Programme on Electronic Commerce, Trade Policy, the WTO, and the Digital Economy, JOB/GC/97, 14 July 2016. 52 Council for Trade in Services, Special Session. An enabling environment to facilitate online transactions. Communication from the European Union, TN/S/W/64, May 2017. 53 General Council, Possible Way Forward on Electronic Commerce. Communication from Japan, JOB/GC/130, 14 July 2017. 54 For a useful summary of the 2016 proposals see South Centre, ‘The WTO’s Discussions on Electronic Commerce’, Analytical Note SC/AN/TDP/2017/2, January 2017; see also South Centre, WTO MC11 (2017). 55 General Council, Work Programme on Electronic Commerce, Report of Panel Discussion on ‘Digital Policy and Development’. Communication from the African Group, JOB/GC/133, 21 July 2017, p. 2. 56 General Council, The Work Programme on Electronic Commerce, Statement by the Africa Group, JOB/GC/144, 20 October 2017, para 3.2. 57 General Council, Work Programme on Electronic Commerce, Electronic Commerce and Development, JOB/GC/117, 14 February 2017. See South Centre, WTO Discussions (2017). 58 Jake Colvin, ‘Geneva NFTC’s Global Innovation Forum Discusses Impact of Global E-Commerce on Small Business and Development’, 8(2) NFTC Council Highlights 10 (2018). 59 Friends for E-Commerce for Development, Mapping e-Trade for All Development Objectives into a WTO Framework for E-Commerce, April 2017. 60 General Council, Work Programme on Electronic Commerce. Draft Ministerial Decision. Communication from Costa Rica. JOB/GC/139, 10 October 2017. 61 General Council, Work Programme on Electronic Commerce, Aiming at the 11th Ministerial Conference. Communication from the People’s Republic of China and Pakistan, JOB/GC/110/Rev.1, 16 November 2016. 62 Owen Fishwick, ‘China in the Fast Lane on Digital Silk Road’, China Daily, 4 December 2017, http://www.chinadaily.com.cn/business/4thwic/2017-12/04/content_35201648.htm (visited 10 February 2018). 63 ‘WTO, eWTP, WEF Enabling E-commerce Launch Event’, 11 December 2017, https://www.wto.org/english/news_e/spra_e/spra206_e.htm (visited 10 February 2018). 64 India proposed the continuation of the Work Programme based on the existing mandate, subject to periodic reviews by the General Council of reports from the councils. General Council, Work Programme on Electronic Commerce, Communication from India, JOB/GC/153, 20 November 2017. 65 General Council, Work Programme on Electronic Commerce, JOB/GC/140/Rev5, 30 November 2017, supported by Australia, Canada, Chile, Colombia, the EU, Israel, South Korea, Mexico, Montenegro, New Zealand, Norway, Paraguay, Peru, Ukraine. 66 Spam, e-signatures, e-contracts, source codes, cyber-security, location of servers, use of data, and privacy protections are not self-evidently ‘matters that concern multilateral trade relations’. Many of the issues have previously been raised in directly relevant forums like the International Telecommunications Union and the United Nations, only to be blocked by those who are advocating their preferred version of those rules in the WTO: see Richard Hill, The New International Telecommunications Regulations and the Internet: A Commentary and Legislative History (New York: Schulthess/Springer 2013). 67 Joint Statement on Electronic Commerce, WT/MIN(17)/60, 13 December 2017. 68 E.g., John Brinkley, ‘Trump’s Disdain for WTO Portends Only Trouble’, Forbes, 8 March 2017, https://www.forbes.com/sites/johnbrinkley/2017/03/08/trumps-disdain-for-wto-makes-no-sense-portends-only-trouble/#678859b22f52 (visited 10 February 2018). 69 For example, JOB/GC/174; Exploratory Work on Electronic Commerce. Non-Paper from Brazil, JOB/GC/176, 12 April 2018; Joint Statement on Electronic Commerce Initiative. Communication from the United States, JOB/GC/178, 12 April 2018. 70 Ravi Kanth, ‘DG, Defying Mandates, Deputes his Officials to Attend Pluri-Meetings’, SUNS no. 8644, 19 March 2018. https://www.twn.my/title2/wto.info/2018/ti180313.htm (visited 10 February 2018). 71 See WTO, ‘Doha Round: What are they Negotiating?’, https://www.wto.org/english/tratop_e/dda_e/update_e.htm (visited 10 February 2018). 72 Critical academics, government officials, and non-government organizations believe the GATS intrudes too far into the domestic regulatory autonomy of sovereign states. This author is one of those: see Kelsey, above n 24, but accepts the reality of its existence. 73 https://www.wto.org/english/thewto_e/minist_e/min05_e/final_text_e.htm (visited 10 February 2018). 74 Kelsey, above n 17, at 138–39. 75 WTO, Guidelines on the accession of Least-Developed countries, https://www.wto.org/english/thewto_e/acc_e/cbt_course_e/c2s4p1_e.htm (visited 10 February 2018). 76 ICTSD, An Analysis of the WTO Accession Guidelines for Least Developed Countries, Information Note (Geneva: ICTSD, 2012) 10. 77 Art. XIII required negotiations on government procurement to begin within two years of GATS entering into force. Art. XV negotiations on trade-distorting subsidies had no time frame. Art. VI.4 provided for negotiation on certain forms of domestic regulation to develop ‘any necessary’ disciplines, again with no time frame—despite having the weakest mandate, the domestic regulations disciplines have been pursued by some developed countries with vigour. 78 https://www.wto.org/english/res_e/booksp_e/analytic_index_e/gats_02_e.htm#article10A (visited 10 February 2018). 79 E.g. WTO, Report of the Chairperson of the Working Party on GATS Rules, S/WPGR/21, 14 April 2011, pp. 1–2. 80 Emad Tinawi and Judson Berkey, ‘E-Services and the WTO: The Adequacy of the GATS Classification Framework’, OECD Forum on E-Commerce (2000) 7. 81 Aaditya Mattoo and Ludger Schuknecht, Trade Policies for Electronic Commerce (World Bank Policy Research Working Paper 2380, 2000) 2. 82 Tinawi and Berkey, above n 80, at 9. 83 WTO, Work Programme on Electronic Commerce, Submission by the United States, WT/GC/16, G/C/2, S/C/7, IP/C/16, WT/COMTF/17, 12 February 1999, p. 2. 84 WT/GC/16, p. 3. 85 WT/GC/16, p. 2. 86 JOB/GC/178, p. 3. 87 Domestic regulation is a fourth critical element, but it not covered here for space reasons. 88 WTO, Services Sectoral Classification List. Note by the Secretariat, MTN.GNS/W/120, 10 July 1991. 89 Some recent agreements use later versions of UNCPC or the International Standard Industrial Classification (ISIC). https://unstats.un.org/unsd/publication/seriesm/seriesm_4rev4e.pdf (visited 10 February 2018). 90 Mattoo and Schuknecht, above n 81, at 14 and Table 4. 91 Laura Altinger and Alice Enders, ‘The Scope and Depth of GATS Commitments’, The World Economy, May 1996, p. 316. 92 Mattoo and Schuknecht, above n 81, at 17. 93 OECD (2016), p.6. 94 For the challenge this poses to developing countries and LDCs see UNCTAD (2017), Rising Product Digitalisation and Losing Trade Competitiveness, UNCTAD, UNCTAD/GDS/ECIDC/2017/3 95 The two pre-existing ‘trade in services’ texts – the Canada US Free Trade Agreement (1988) and the services protocol to the Australia New Zealand Closer Economic Relations Trade Agreement (1989) - did not differentiate the delivery of services by ‘mode’. Instead, they covered services that were provided ‘within or into the territory’ of the other Party. 96 GATT, Scheduling of Initial Commitments on Trade in Services. Explanatory Note, MTN.GNS/W/164, 3 September 1993, pp.8-9; and Addendum of 30 November 1993 97 OECD (2016), Towards a G20 initiative on measuring Digital Trade: mapping challenges and framing the way forward, OECD: Paris, p.1-2, http://www.oecd.org/g20/summits/hamburg/Towards-a-G20-Initiative-on-Measuring-Digital-Trade.pdf (visited 10 February 2018). 98 MTN.GNS/W/164 99 WTO, Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services. Adopted by the Council for Trade in Services on 23 March 2001, S/L/92, 28 March 2001. 100 MTN.GNS/W/164, 9 101 Altinger Enders, above n 91, at p. 320 Table 5. 102 Many contemporary FTAs combine the modes. That simplifies application of the rules to services for the purpose of that agreement, but makes it difficult to compare those obligations with agreements that use the four modes, including in the application of most-favoured-nation treatment. 103 Tinawi and Berkey, above n 80, at 6–7. 104 Tinawi and Berkey, above n 80, at 6 (original emphasis). 105 I am indebted to Sanya Reid Smith for her research into the WTO archives for discussions of technological neutrality in the GATS. 106 SL/92, para 47. 107 KORUS Art. 15.2. 108 Mattoo and Schuknecht, above n 81, at 16–17. India used these arguments, albeit without attribution, in the General Council in 2001: WT/GC/M/65, 18 June 2001, para 205. 109 Mattoo and Schuknecht, above n 81, at 16. 110 General Council, WTO Agreements and Electronic Commerce, WT/GC/W/90, 14 July 1998, para 8. 111 Group on Basic Telecommunications, Report of the Group on Basic Telecommunications, S/GBT/4, 15 February 1997, p. 3. 112 WT/GC/16, 12 February 1999, p. 3. 113 General Council, Preparations for the 1999 Ministerial Conference. WTO Services Negotiations. A Communication from Australia, WT/GC/W/353, S/C/W/126 11 October 1999, para 15. 114 Council for Trade in Services, Report of The Meeting Held On 14 and 15 December 1998. Note by the Secretariat, S/C/M/32, 14 January 1999, p. 4. 115 Council for Trade in Services, Report of The Meeting Held On 23 and 24 November 1998. Note by the Secretariat, S/C/M/31, 9 December 1998, p. 2. 116 Committee on Specific Commitments, Report of the Meeting held on 18 September 2014, S/CSC/M/71, 15 October 2014, para 1.13. 117 Committee on Specific Commitments, Report of the Meeting held on 14 October 2015, S/CSC/M/74, 27 November 2015, para 2.35. 118 Council for Trade in Services, Draft: Interim Report on Electronic Commerce, S/C/W/100, 17 March 1999, para 16. 119 Council for Trade in Services, Report of the Meeting held on 22 and 24 June 1999, S/C/M/37, 20 July 1999, para 25. 120 S/C/M/37, 20 July 1999, para 28. 121 Council for Trade in Services, Revised Draft. Work Programme on Electronic Commerce, Progress Report to the General Council, S/C/W/115/Rev.1, 20 July 1999, para 4. 122 United States—Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/R, 10 November 2004, para 6.285. 123 Council for Trade in Services, Interim Report to the General Council: Work Programme on Electronic Commerce, S/C/8, 31 March 1999, para 4. 124 Committee on Trade and Development, Note on the meeting of 27 October and 8 November 2000, WT/COMTD/M/31, 14 December 2000, para 57. 125 Electronic Commerce, Horizontal and Sectoral Issues which Require Further Analysis. Communication from MERCOSUR, WT/GC/W/434, 7 May 2001, para 8. 126 General Council, Minutes of Meeting of 8 and 9 May 2001, WT/GC/M/65, 18 June 2001, para 116. 127 Council for Trade in Services, Special Session, Report of the Meeting held on 9 to 12 July 2001, S/CSS/M/10, 21 September 2001, para 204. 128 Council for Trade in Services, Special Session, Report of the Meeting held on 5, 8, and 12 October 2001, S/CSS/M/12, 28 November 2001: ‘the definition of technological neutrality was not included in the GATS, as it had been introduced in the negotiation on basic telecom in a very specific context. Developing countries could consider when that concept would affect their flexibility and their right to condition entry to their markets depending on the technology to be used, and perhaps transferred,’ para 143. 129 Committee on Trade in Financial Services, Report of the Meeting Held on 9 May 2001, S/FIN/M/31, 1 June 2001, para 11. 130 Committee on Trade in Financial Services, Report of the Meeting Held on 16 May 2003, S/FIN/M/40, 30 June 2003, para 28. 131 S/FIN/M/40, 30 June 2003: ‘There was no reference to technological neutrality in the GATS, and such a concept had not really been assumed by the GATS. In any case, that was only Switzerland's interpretation,’ para 34; see also Committee on Trade in Financial Services, Report of the Meeting Held on 6 October 2003, S/FIN/M/42, 12 November 2003: ‘technological neutrality was not a basic assumption of the GATS. It was not provided for, either explicitly or implicitly, in the GATS,’ para 16. 132 S/FIN/M/40, 30 June 2003: ‘There was no agreement among Members on the actual meaning of technological neutrality. The Malaysian delegation did not share Switzerland's views on that issue,’ para 35. 133 JOB/GC/176, p. 4. 134 Art. XIX vests the Ministerial Conference and the General Council with exclusive authority to adopt interpretations of the WTO agreements. 135 General Council, Ministerial Conference and Outcome Document, Communication from the African Group [and others] JOB/GC/158. © The Author(s) 2018. Published by Oxford University Press. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of International Economic Law Oxford University Press

How a TPP-Style E-commerce Outcome in the WTO would Endanger the Development Dimension of the GATS Acquis (and Potentially the WTO)

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Oxford University Press
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© The Author(s) 2018. Published by Oxford University Press. All rights reserved.
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1369-3034
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Abstract

Abstract The World Trade Organization (WTO) faces a watershed. Developed country Members want to abandon the Doha round and negotiate ‘new issues’, notably electronic commerce, as part of a broader US-led strategy to rewrite the global trade rules for the 21st century. Developing countries insist the Doha round be concluded before considering new issues and most reject the e-commerce agenda as foreclosing their options for digital development. This standoff dominated the MC11. The new e-commerce agenda has its genesis in the Trans-Pacific Partnership. Three factors complicate moves to export it to the WTO. First, those rules are blunt instruments designed to protect the first mover status and oligopolistic power of Big Tech. Second, they lack any development flexibilities or obligations. Third, their application to major developing country competitors and the potentially lucrative markets of larger developing countries requires multilateralization through the WTO, but that will be a highly contested process. That contest is now playing out through the plurilateral process announced by the e-commerce proponents during the MC11. The proposals assume a major expansion of Members’ commitments under the General Agreement on Trade in Services (GATS). Favourable interpretations of sectoral classifications, modes of trading services, and the application of technological neutrality to historical commitments would override the original GATS acquis that ensures developing countries can control their exposure, and seriously diminish their regulatory autonomy to maximize the opportunities of the digital economy and minimize the risks. Such an agenda could deepen the crisis at the WTO. The World Trade Organization (WTO) faces a watershed. For several years, developed country Members have signalled their intention to reshape the multilateral trading regime. Before the 10th ministerial conference in December 2015, the USA called for the Doha Development Round to be abandoned and for negotiating mandates on new issues.1 Pressure to move on from the Doha round in favour of new issues intensified before the 11th ministerial conference (MC11) in Buenos Aires, Argentina in December 2017.2 This article locates those moves within a broader US-led strategy to rewrite the global trade rules for the 21st century,3 which powerful developed countries have been pursuing through a raft of mega-regional and bilateral negotiations, and considers the implications for the WTO’s development acquis. Electronic commerce is paramount among the ‘new issues’ now slated for WTO negotiations. In 1998 the WTO established a Work Programme on Electronic Commerce ‘to examine all trade-related issues arising from electronic commerce, taking into account the economic, financial, and development needs of developing countries’.4 That was conducted through the councils for trade in goods, trade in services, trade-related intellectual property rights and the Committee on Trade and Development, supplemented by dedicated discussions at the General Council. Electronic commerce was narrowly defined as ‘the production, distribution, marketing, sale or delivery of goods and services by electronic means’.5 After a decade the Work Programme was moribund. In mid-2016 the USA, Japan, and the European Union (EU) led a concerted push in the WTO for formal negotiations on a broader digital agenda. Those and subsequent proposals were shaped by the US-led Trans-Pacific Partnership (TPP) agreement, concluded in late 2015. The US Trade Representative (USTR) described the TPP as ‘the most ambitious and visionary Internet trade agreement ever attempted’.6 That was not surprising. The text encapsulates the USTR’s Digital2Dozen principles that codify the US digital lobby’s demands. The TPP provided a precedent for other mega-regional and bilateral negotiations. Support from Japan and the EU, in particular, fostered the sense of an emerging global norm, and became more important when the US administration withdrew from an active leadership role in 2017. Moves to advance the e-commerce agenda in the WTO have been resisted by a majority of developing country Members, led by the African Group and the Least-Developed Countries (LDCs). They insist there can be no new issues until the Doha round has addressed the asymmetries of the existing WTO agreements, and reject the e-commerce proposals as foreclosing their options for digital development on a national and regional scale.7 A smaller group of Friends of E-commerce for Development has endorsed a development-oriented e-commerce agenda.8 However, the principal proposals have rarely offered more than development rhetoric and aid for trade to implement the developed country agenda.9 This standoff dominated the MC11. The conference ended in stalemate, without a formal Declaration. Ministers agreed by consensus to roll over the 1998 Work Programme.10 However, ministers representing 70 WTO Members,11 including the USA and a number of developing countries,12 announced that they would begin ‘exploratory work toward future WTO negotiations on trade-related aspects of electronic commerce’.13 The scene was set for a contest over the direction and control of the WTO, and the future of its development acquis. Section I of this article traces the genesis of the new e-commerce agenda from the original TPP and highlights three complicating factors. First, the TPP is a blunt instrument whose e-commerce rules were designed to protect the first mover status and oligopolistic power of Big Tech. Its novel e-commerce chapter is complemented by extensive rules and obligations on cross-border services, financial services, telecommunications, investment, and transparency. The total package imposes significant constraints on the regulatory authority of governments, irrespective of their levels of development, and includes matters that belong more to Internet governance, than to trade.14 While some developed countries have replicated much of the TPP template, its over-reach has been problematic even for some of them.15 Second, there is no pretence of a development agenda in those agreements that have followed the TPP approach. Third, the new e-commerce rules were targeted, at least in part, at developing countries that pose a significant competitive threat to the incumbents, notably China (see Gao, in this volume), or offer lucrative markets in Africa, Latin America, and Asia. But the current agreements do not apply to them. Multilateralization offers a way to achieve that, even if progress towards the end-goal has to be incremental. However, negotiating those rules through the WTO means that the process and mandate for negotiations, and any substantive rules, will be heavily contested. That contest has already begun to play out through the plurilateral process announced by the e-commerce proponents during the MC11. Section II of the article examines in more detail one of the key objectives of the e-commerce proposals: the substantial expansion of Members’ obligations and commitments under the General Agreement on Trade in Services (GATS).16 The lead proponents have previously tried and failed to achieve that in the GATS 2000 negotiations.17 Substantial new liberalization, especially in cross-border and digital services, needs to reconciled with the GATS acquis: the modalities of progressive liberalization and the hybrid architecture for scheduling each Member’s GATS commitments that allows countries to limit their obligations and control the pace of new liberalization. These flexibilities are supplemented by differential treatment that reflects a Member’s level of development. A likely strategy to bypass these structural obstacles involves reinterpreting Members’ existing GATS obligations on three unsettled matters: first, expanding the scope of the sectoral classifications that were used for scheduling in the early 1990s; second, blurring boundaries between the different modes of trading services on which governments have made commitments; and third, the notion that technological neutrality applies to schedules that were adopted in 1994 when the World Wide Web barely existed. None of these reinterpretations has a sound legal foundation. Moreover, any one of them would significantly alter the original bargain that developing countries made back in 1994 and seriously diminish their autonomy to regulate digital services in the future. The conclusion warns against history repeating itself. The digital economy offers opportunities and challenges for the developing world,18 which needs the space to maximize the benefits and minimize the risks. Legally and ethically, an e-commerce agenda should not proceed in the WTO unless the resolution of outstanding questions and the design of future rules accord with the development acquis. The current proposals for e-commerce are the antithesis of that: they would consolidate the dominance of developed countries and their corporations over the 21st century digital economy, just as the USA did with intellectual property rights and services in the Uruguay round. Such an outcome would deepen the crisis confronting the WTO. I. CONSTRUCTING THE DIGITAL TRADE AGENDA When the USA moved to put electronic commerce on the agenda of the newly-established WTO in 1998,19 the potential for the Internet and World Wide Web was embryonic. Few Members would have foreseen how digitization would revolutionize post-industrial capitalism, social engagement, knowledge creation and dissemination, as well as political and corporate power. Two decades later, the USA had developed a comprehensive legal template for governing the global digital domain on terms that were designed by and for the US tech industry. A. Big Tech’s influence The world’s largest companies by capitalization are Apple, Alphabet (the parent company of Google), Amazon, Microsoft, and Facebook.20 They and other Big Tech companies exercise oligopolistic power over the digital ecosystem, extending across data, platforms, payment systems, intellectual property, and the most lucrative market segments. Google, alone, controls five of the top six billion-user universal web platforms—search, video, mobile, maps, and browser—and leads in 13 of the top 14 commercial web functions.21 Industry players also dominate the current multi-stakeholder forums of Internet governance, alongside their governments.22 Their pre-eminence has been established under US domestic law that regulates telecommunications, but largely insulates the Internet from government intervention,23 and in the absence of any effective international, or in many cases domestic, competition law regime. As the corporate power of the tech lobby increased, they began intensely lobbying the USTR for global rules that would insulate them from intrusive regulation. The strategy of US companies to use trade agreements to shape foreign regulation of technology to their advantage dates back at least to the Uruguay round. Geza Feketekuty, who was Assistant USTR with responsibility for services from the late 1970s, identified two goals for what became the GATS: to pre-empt restrictive regulation of the technologies that were crucial to the transnational operation of capital, data and related services; and to secure a multilateral agreement on investment.24 The agenda was driven at that time by Wall Street. Peter Drahos and John Braithwaite in Information Feudalism document parallel pressure from the pharmaceutical and entertainment industries that resulted in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).25 More recently, the industry has wielded its influence on US trade negotiations in many ways. Google became the highest spender on lobbying of the US Congress in 2017.26 Tech industry players made up over a third of Team TiSA, a corporate lobby established to promote the plurilateral TiSA.27 They were granted privileged access to the US government individually and through overlapping industry lobby groups on various USTR and State Department advisory committees.28 There was also a classic revolving door. Most notably, Robert Holleyman was appointed Deputy USTR from 2014 to 2017 after twenty-three years as the President and Chief Executive of the BSA/Software Alliance,29 and established a Digital Trade Working Group in 2016. Under Holleyman’s leadership, the USTR formulated the Digital2Dozen principles for e-commerce negotiations,30 which mirror the industry’s published demands.31 The principles are couched in trade-agreement discourse, which pits freedom and choice against barriers, discrimination, and forced action: promoting a free and open internet; prohibiting digital customs duties; securing basic non-discrimination principles; enabling cross-border data flows; preventing localization barriers; barring forced technology transfers; protecting critical source code; ensuring technology choice; advancing innovative authentication methods; delivering enforceable consumer protections; safeguarding network competition; fostering innovative encryption products; building an adaptable framework for digital trade; promoting cooperation on cybersecurity; preserving market-driven standardization and global interoperability; eliminating tariffs on all manufactured products; securing robust market access commitments on investment and cross-border services, including those delivered digitally; ensuring faster, more transparent customs procedures; promoting transparency and stakeholder participation in the development of regulations and standards; ensuring fair competition with state-owned enterprises; promoting strong and balanced copyright protections and enforcement; advancing modern patent protection; combating trade secret theft; and recognizing conformity assessment procedures. B. The USTR’s promotion of digital norms The growing prominence of digital issues in the US trade agenda can be traced from their limited coverage in the Australia US Free Trade Agreement 2005 (AUSFTA)32 and the Dominican Republic-Central America Free Trade Agreement 2006 (CAFTA)33 to a more extensive e-commerce chapter in the US Korea Free Trade Agreement 2012 (KORUS).34 The TPP was the first agreement to fully reflect the Digital2Dozen principles. The comprehensive e-commerce chapter, and more extensive rules and commitments on cross-border services, financial services, telecommunications, and transparency, imposed severe constraints on the future regulation of the digital domain.35 Despite the involvement of several developing countries, there were no development flexibilities. Those texts and schedules remained intact in the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP), which the remaining 11 parties adopted after the USA withdrew from the TPP in January 2017. Ironically, the USA would still benefit from the implementation of the e-commerce rules without making any market access concessions in return.36 The USA proposed the same template for the TiSA Annex on Electronic Commerce.37 As with the TPP, that annex was complemented by other annexes on telecommunications, financial services and transparency, plus sectoral annexes, such as express delivery and air transportation. The leaked draft texts from the last round before the negotiations were indefinitely suspended showed broad acceptance of the US model, but disagreement on several important elements of the e-commerce annex, especially on cross-border data flows and privacy protections.38 The Digital2Dozen principles continued to inform US trade policy after the Trump administration quit the TPP. The USTR’s objectives for the renegotiation of NAFTA sought to largely replicated the TPP,39 which Mexico and Canada had already adopted as parties to the CPTPP. C. The limits of US-led norm creation The US embarked on a project of coalition building through the OECD, G7 and G20.40 Over time, the TPP template began to frame negotiations that did not involve the USA. Japan became its most active champion after the USA retreated from the TPP and active involvement in the WTO. The only TPP provision omitted from the Electronic Commerce chapter in Japan’s free trade agreement (FTA) with Mongolia was the obligation to allow cross-border movement of information.41 Mongolia had no experience in negotiating such agreements, and this one-sided FTA was concluded after a mere six rounds. The e-commerce obligations have no development flexibilities and there was no commitment to support Mongolia’s digital industrialization or bridge the digital divide. Japan also tabled TPP-style provisions in the Regional Comprehensive Economic Partnership (RCEP).42 As those negotiations involve 16 non-US countries, including China, India and three LDCs, the e-commerce negotiations made predictably slow progress. The EU’s approach was initially more cautious. The electronic commerce chapter in the Canada EU Comprehensive Economic and Trade Agreement (CETA) was limited.43 So was the EU’s e-commerce proposal for the Transatlantic Trade and Investment Partnership (TTIP) between the USA and EU, dated 2015.44 The finalized EU Japan Economic Partnership Agreement, published days before the MC11 in December 2017, was much closer to the TPP.45 The financial services section even included requirements to allow the cross-border transfer and processing of information, which had been omitted from the TPP on the insistence of the US Treasury.46 The major divergence was on the highly sensitive matter for the EU of data transfer and privacy protection. The parties agreed to reassess the need to include a provision on free flow of data within three years of the agreement coming into force.47 That would allow time to complete the approval of Japan’s privacy regime under the EU’s General Data Protection Regulation.48 By the time of the MC11, the USA had successfully seeded e-commerce as the major new issue in contemporary trade negotiations and established a precedent that served its strategic and corporate interests, eschewing any development dimension. However, those outcomes were secured through negotiations that the USA dominated or by like-minded developed countries. Achieving the goal of multilateralizing the e-commerce template through the WTO would be much more contested. D. Re-focusing on e-commerce in the WTO On 4 July 2016, the USA circulated a non-paper proposing 16 rules that were based on its Digital2Dozen principles.49 Soon afterwards Japan, supported by five other countries, tabled a paper entitled ‘Reinvigorating Discussions on Electronic Commerce’ with a list of questions that Members were invited to address.50 Japan then responded to its own questions with a paper that annexed a table showing the common e-commerce provisions in recent FTAs. Simultaneously, an EU-led group that included Canada, Chile, South Korea and Cote d’Ivoire, submitted an even more comprehensive paper.51 All reflected the TPP framework, to varying degrees. The EU-led group subsequently refined its position, reframing its proposal in less aggressive terms as ‘an enabling environment to facilitate online transactions’.52 Japan maintained its comprehensive demands.53 These proposals were directed towards securing a negotiating mandate at the MC11.54 They met sustained resistance from the African Group and the LDCs. The Africans hosted a forum in July 2017 to ‘scope the digital divide, industrial policy and catching-up in the digital economy’. The discussion concluded that ‘trading developmental policy space in this area could pose a serious threat for developing countries, and attempts to curtail this policy space would prevent developing countries from building the capacities, and skills to close the widening technological gap’.55 Later, the group insisted that the onus rested on those proposing a negotiating mandate to justify new rules that ‘would entrench existing imbalances and further constrain the ability of our governments to implement industrial policy and catch-up’.56 A counter-voice of developing countries called Friends for E-Commerce for Development held their first ministerial meeting in April 201757 (and co-hosted a workshop with the US National Foreign Trade Council58). Their position focused on practical matters of e-commerce readiness and strategy, ICT infrastructure, trade logistics, and payment systems, but they also called for ‘work on legal and regulatory frameworks’.59 In October 2017, group member Costa Rica circulated a draft ministerial decision that proposed an e-commerce for development agenda as an integral part of the 1998 work programme.60 As Henry Gao explains in his paper in this volume, China focused on more traditional e-commerce issues of cross-border customs facilitation.61 That reflects China’s Digital Silk Road strategy,62 which relies heavily on digital outreach through its own technology giant Alibaba. A partnership between the World Economic Forum, the Electronic World Trade Platform created by Alibaba’s founder Jack Ma, and the WTO was announced at the MC11.63 Russia and Brazil staked out their own, different positions, as did India.64 Immediately before the MC11, the EU-led group released a draft Ministerial Decision on Electronic Commerce that proposed a Working Party on Electronic Commerce with a mandate to ‘conduct preparations for and carry out negotiations on trade-related aspects of electronic commerce on the basis of proposals by Members’.65 Under Article III.2 of the Marrakesh Agreement Establishing the World Trade Organization, a negotiating mandate can only be granted in relation to matters dealt with under the existing Agreements, or that concern multilateral trade relations between Members if the Ministerial Conference so decides.66 Once it was clear that they would not secure such a mandate, Australia, Japan, and Singapore co-chaired a meeting ‘on the margins’ of the MC11 for ministers representing 70 WTO Members, including the USA and a number of developing countries. Their joint statement announced they would begin ‘exploratory work toward future WTO negotiations on trade-related aspects of electronic commerce’. Participation would be open to all WTO Members and ‘without prejudice to participants’ positions on future negotiations’67—wording that carefully finessed the Trump administration’s antipathy to the multilateral arena.68 In April 2018, the Secretariat circulated a series substantive proposals to advance that ‘exploration’.69 The status of those plurilateral discussions, whether the WTO Secretariat has any authority to support them, and their relationship to the 1998 Work Programme, go to core of the WTO’s constitution. Developing countries who oppose the e-commerce negotiations could be expected to insist that the WTO’s institutional rules are applied.70 II. THE THREAT TO THE GATS ACQUIS The contest over the broad e-commerce agenda will take some time to resolve. Meanwhile, the proponents are highlighting some matters that do not need a new mandate—notably the GATS-related aspects of the e-commerce proposals. However, those rights and obligations can only be rewritten with the consent of WTO Members. Most developing countries remain resistant to any such moves, especially outside the comprehensive undertaking of the Doha round. They find crucial support for this position in the structural framework of the GATS, which enables them to control their exposure to the GATS rules and forms a crucial part of the GATS acquis. A. The GATS acquis The ‘GATS acquis’ refers to ‘what has been acquired or achieved so far’.71 The Uruguay round negotiations on services were hard fought. There were many concessions and compromises.72 Developing countries, led initially by India and Brazil, insisted on retaining some control over their exposure to rules which they believed were skewed in favour of wealthy countries and multinational corporations. The notion of a mutually beneficial bargain was fundamental to the final consensus. That bargain pivots on the concept of progressive liberalization under GATS Part IV, to be achieved through the periodic negotiation of sectoral commitments through an exchange of requests and offers. The final balance of the concessions is set out in schedules that define the Member’s legal obligations. Progressive liberalization and request and offer bargaining over schedules clearly imply that Members are only bound by what they could foresee at the time of negotiating their commitments. The Agreement explicitly requires asymmetries in favour of developing countries when reaching that bargain. Article IV.3 and Article XIX.3 require particular sensitivity to the serious difficulties of LDCs in ‘accepting negotiated specific commitments in view of their special economic situation and their development, trade and financial needs’. That instruction was strengthened by Paragraph 26 of the Hong Kong ministerial declaration 2005,73 which acknowledged that LDCs are not expected to undertake new commitments in the Doha round. The GATS Article V sets conditions before regional trade agreements, including plurilaterals such as TiSA, can be exempted from Article II (most-favoured-nation treatment). These conditions include mandatory flexibility in favour of developing countries in meeting the requirement for liberalization of substantial sectoral commitments, in accordance with their level of development. That requirement is routinely ignored, with developing countries making by far the higher levels of new liberalization in FTAs with developed countries.74 Likewise, the Guidelines on LDC Accession adopted by the General Council in 200275 require Members to ‘exercise restraint’ in seeking market access concessions from acceding LDCs, taking into account those of existing LDCs, in return for offers of ‘reasonable’ concessions ‘commensurate with their individual development, financial, and trade needs’. That obligation has consistently been honoured in the breach.76 In addition, Article IV requires developed countries to make commitments in activities of commercial interest to developing countries, with special attention to LDCs. There is minimal evidence of that occurring, especially on the principal demand for commitments on the temporary movement of natural persons (mode 4). A further unfulfilled promise in the GATS is the obligation on Members in Article X to agree on safeguards by three years after the GATS’ entry into force. That was the only one of four unfinished provisions that had a deadline for completion in the text.77 The deadline was extended five times, most recently in 2004 with no specified end date.78 It has become a phantom obligation.79 Emad Tinawi and Judson Berkey have suggested that preserving Members’ regulatory space and freezing the scope of existing commitments provides a disguised safeguard regime for e-services.80 But, as explained below, that protection is at risk, too. B. Development and e-commerce in the GATS The importance of honouring the acquis was recognized in the early in the discussions on e-commerce. In 2000 Aaditya Mattoo and Ludger Schuknecht acknowledged the GATS as the most relevant trade regime to e-commerce and that the agreement allows Members to decide what commitments to make on market access and national treatment.81 Many had, and still have, not done so in a large number of services sectors where electronic delivery is feasible. That is their right under the GATS. Other academics who advocated for the e-commerce agenda in the context of the GATS 2000 round also recognized the need to respect the GATS acquis. Tinawi and Berkey proposed four criteria that any solution to e-commerce should meet: allow for the expansion of e-Services; be unambiguous and transparent; not change the bargains struck within the existing GATS commitments; and not require a substantial rewriting of the GATS.82 In stark contrast, the USA raised the potential ‘shortcomings of traditional approaches’ in a paper tabled shortly after the Work Programme on e-commerce was established in late 1998 and asserted the most positive possible interpretation of the GATS.83 The USA claimed that all service sectors were already covered by the GATS—although it might be useful for Members’ to review the extent of their and others’ commitments. There was ‘no question’ that commitments encompassed delivery of services through electronic means, ‘in keeping with the principle of technological neutrality’.84 The moratorium on customs duties on electronic transmissions, adopted at the second WTO ministerial conference in 1998, should be made permanent. Other parts of the paper addressed services classifications, procurement, intellectual property, domestic regulation, standards, and access to and use of telecommunications networks. As for the development acquis, the USA assured developing countries they could ‘“leap frog” into the information age’ by liberalizing market access and adopting strategies to attract investment in building an infrastructure.85 The USA reiterated this interpretation in the paper tabled as part of the plurilateral ‘explorations’ in April 2018: The services classifications that form the basis for specific commitments under the GATS are seriously outdated, particularly for communications services. Countries should agree that old classifications and commitments can apply to new technologies. Further, new commitments should allow for the cross-border supply of Internet-enabled services that compete against traditional communication services.86 This suggests the extension of Members’ 1994 obligations through three techniques: an expansive reading of services classifications, the blurred borderline between supplying services through mode 1 (cross-border services) and mode 2 (consumption abroad), and assertions of the technological neutrality of commitments.87 Such a reinterpretation of the GATS rules and schedules strikes at the heart of the development acquis. The negative impacts will be most significant for developing countries, and especially LDCs, given the systemic asymmetries of the digital ecosystem and the often-rudimentary state of their regulatory regimes in addressing the rapidly evolving digital environment. C. Services classification To argue that all services are covered by the GATS would invest the existing classifications with content that the Members never envisaged when their commitments were first made. A Member’s commitments are defined in its GATS schedule on a sectoral basis. For their GATS 1994 schedules, most Members used the WTO classification list (W/120),88 which has 12 headings and over 160 subheadings that are linked to the UN Provisional Central Product Classification (UNCPC) 1991. The W/120 list and its UNCPC descriptors reflect the scope of public and commercial services three decades ago. Both are seriously outdated.89 However, changing to an updated version would require renegotiation of the 1994 schedules to ensure the balance of the original bargain has not changed. No one seems to be suggesting that as a viable solution. One argument might be to read the UNCPC descriptions to include new services in categories of substantive services, such as financial, professional, distribution, education, and tourism services, even if they did not exist in 1994. Alternatively, commitments to a means of delivering a service, such as computer and related services, could apply to everything deliverable by that means. Around half the WTO’s Members,90 and one quarter of developing countries,91 made full or partial commitments on cross-border supply of Computer and Related Services in 1994. Given how ubiquitous digital delivery has become, applying those commitments to all digitally-delivered services in 2018 or 2030 would mean de facto universal exposure. A third option arises where Members have made commitments to the opaque or open-ended classification of ‘other’ services, including communication and distribution services. However, Mattoo and Schuknecht observed that a positive listing approach makes it ‘questionable whether the “other” category that exists within most clusters of services activities could legitimately be considered to encompass new services’.92 In addition to their development impacts, all three options oversimplify the problems of categorization. Digital activities are highly fungible. Tech firms are notorious for designating their activities strategically for tax, labour, and regulatory purposes. Do Uber, Google, Expedia, or Airbnb supply a computer service, and/or a transportation, advertising, travel agency or accommodation service respectively? Is additive manufacturing or 3D printing a ‘digitally delivered design service rendered into a product in the country of delivery’, as the OECD suggests?93 If so, it potentially falls within the commitments on cross-border supply of design, software engineering, marketing, advertising, printing, and/or distribution services.94 D. Modes 1 and 2 There is no easy solution to the classification problem. But it is compounded by uncertainties over the different modes of delivering digitized services in these sectoral categories. The GATS 1994 was an experiment. That includes the identification of four modes for ‘trading’ services.95 Members could make different commitments for each mode of supplying each service subsector. According to the original scheduling guidelines, Mode 1 (cross-border delivery) applied to delivery of a service to a consumer located in one country by a supplier located in another through mediums such as post, telephone, or transportation. Under Mode 2 (consumption abroad) the service was supplied to the consumer offshore, such as overseas tourist or having a ship repaired in a foreign country.96 The functional distinction between the two modes has never been clear-cut. For example, a funds transfer from one country to another is mode 1, but the operation of the foreign bank account in which the funds are then held, invested and earn interest is mode 2. Digital trade and supply chains blur the modal boundary even further.97 The Scheduling Guidelines,98 and their revised version in 2001,99 provide detailed but non-binding guidance to Members. The 1993 guidelines advise that: ‘Where a service transaction requires in practical terms the use of more than one mode of supply, coverage of the transaction is only ensured when there are commitments in each relevant mode of supply.’100 Think of Amazon: the purchase and payment may be entirely within the country or across the border; Amazon’s own purchasing arrangements may be local or from a range of countries; delivery to the customer could be through a national or foreign-owned establishment or from across the border. Do the guidelines mean the GATS rules do not apply to an Amazon transaction unless all subsectors are committed? Or must regulators be able to disaggregate each phase of these complex transactions to know what obligations apply? Such complexities were not given much attention when the GATS was first designed, because the main demands and defensive interests centred on rights of foreign establishment (mode 3). That lack of clarity now has serious legal implications. A modal analysis of Members’ original GATS commitments shows very high levels of full commitments in mode 2, and an almost equivalent lack of commitments in mode 1.101 Classifying a transaction as mode 2 rather than mode 1 would therefore expand a country’s commitments significantly.102 Tinawi and Berkey described suggestions that such redefinitions would advance the progressive liberalization objectives of the GATS as ‘troublesome’, saying it would ‘alter by fiat the GATS commitments that countries made during the Uruguay round and subsequent accession negotiations’. Furthermore, countries may have made full commitments to mode 2 on the assumption they had no ability to control their offshore consumption. Expanding that ‘may again constitute a renegotiation of the GATS commitments’.103 The consequences would be: tantamount to changing the deals reached among countries without further trade negotiations. This seems contrary to GATS itself which calls for ‘successive negotiations with a view to promoting the interest of all participants on a mutually advantageous basis and to securing an overall balance of rights and obligations’.104 E. Technological neutrality105 The most troubling and self-serving of the proponents’ arguments is that technological neutrality applies to scheduled commitments. That would mean commitments negotiated in the early 1990s that came into force in 1995 would apply, whatever new technology is used to deliver the service, even if the technology was totally unforeseeable and the government would not have made the commitment, or would have limited its application, if it had known. There is no credible source to support the concept. The GATS scheduling guidelines advise Members who inscribe mode 1 as ‘Unbound due to technical infeasibility’ that the entry reverts to being Unbound if cross-border delivery of the service becomes feasible.106 That is consistent with the presumption that governments are only bound by what they could foresee. The guidelines make no corresponding reference to technological neutrality. In contrast, technological neutrality is explicitly applied in the e-commerce chapters of recent US FTAs, notably the KORUS, CAFTA, and AUSFTA: The Parties affirm that measures affecting the supply of a service delivered or performed electronically are subject to the obligations contained in the relevant provisions of Chapters … (Investment, Cross-Border Trade in Services, and Financial Services), which are subject to any exceptions or non-conforming measures set out in this Agreement that are applicable to such obligations.107 That provision would be unnecessary if there was a genuine consensus that technological neutrality applies to commitments in trade in services schedules. Even with a negative list approach to scheduling in those agreements, the USA felt it necessary to apply the principle explicitly. Mattoo and Schuknecht have identified three further legal arguments why the principle of technological neutrality ‘cannot be taken for granted’.108 First, classifications under the UNCPC sometimes provide exhaustive definitions of the means of delivery, meaning they are not technology neutral.109 Second, the moratorium on customs duties on electronic transmissions treats the electronic delivery of software services differently from the delivery of software services through another means, such as postal delivery. That undermines the notion of technological neutrality and the presumption of ‘likeness’ required for national treatment of services. Third, the extended Uruguay round negotiations on telecommunications that were concluded in 1997 stated explicitly that technological neutrality applied. This resulted from an interpretive note proposed by the Chair of the Group on Basic Telecommunications that said the listed services could be applied through any technology. The group adopted the chair’s report and it was attached to its report to the CTS.110 There is no equivalent statement for the GATS. Even then, the Chair’s note says that it was not intended to have or acquire any binding legal status.111 However, the most compelling rebuttal to claims of a consensus over technological neutrality comes from the Members themselves. As early as 1999, the US was asserting that ‘there should be no question that where market access and national treatment commitments exist, they encompass the delivery of services through electronic means, in keeping with the principle of technological neutrality’. It was less certain about the state of ‘new services’.112 The same year Australia unsuccessfully proposed that the Seattle ministerial declaration should ‘reiterate the precept of technological neutrality which applies to commitments made under the GATS’.113 The WTO Secretariat has consistently boosted such claims. A note from a meeting of the Council on Trade in Services [CTS] in December 1998 recorded that: On the basis of the informal meeting the Chairman provided the following summary under his own responsibility: … Members agreed that the GATS applied to all services regardless of the means of technology by which they were delivered (emphasis added). This was further reinforced by the fact that in no area of the WTO were there different rules for different techniques of delivery. It was noted that the principle of technological neutrality also applied to scheduled commitments, unless the schedule specified otherwise: it was therefore possible for Members to schedule commitments in a non-technologically neutral manner. It was suggested that consideration should be given to how technological neutrality in electronic commerce would apply to existing commitments and to certain new services.114 Neither the WTO Secretariat, nor the chair in an informal meeting, has authority to interpret the GATS text. Moreover, the minutes of the CTS meeting actually said: ‘Several delegations said that it was important to affirm the technological neutrality of the GATS, but some delegations wished to see more discussion of this notion’115 (emphasis added). As recently as 2014 the Secretariat referred to this document again when asserting that ‘the principle of technological neutrality had been established for quite some time’.116 And in 2015, the Secretariat inaccurately noted ‘a report of the Services Council, contained in document S/L/74 dated 27 July 1999, which examined how different GATS provisions would apply to e-commerce. It was there that Members had agreed to the concept of technological neutrality’.117 These positions appear disingenuous, especially from a purportedly independent Secretariat, in the face of abundant WTO documentation that there is no consensus on the issue. The draft Interim report of the CTS meeting on 9 February 1999 actually said that ‘Members generally agreed that the principle of technological neutrality applied to GATS commitments, … including electronic means’118 (emphasis added). The report of its meeting in June 1999 again reported the chair’s comments: In summarising the outcome of previous discussions, the Chairman recalled that delegations generally agreed that the principle of technological neutrality applied to specific commitments and underlined that it was important not to undermine existing commitments by suggesting that electronic delivery of services was not covered by the GATS. However it had been pointed out that it was necessary to discuss how restrictions on the technical means of delivery should be treated. The emergence of electronic commerce should not provide a reason to schedule new restrictions. Rather, the specification of some modes in the schedules as unbound due to lack of technical unfeasibility may need to be reviewed in the light of technological developments119 (emphasis added). The WTO’s records show that India had insisted at the same meeting that ‘it could not be presumed that the principle of technological neutrality applied automatically to all specific commitments of Members, as this would have legal and political consequences arising out of negotiations in the Uruguay Round and resulting commitments. According to India a full consideration of the negotiating history of the GATS would be useful in this respect’120 (emphasis added). Again, the progress report from the Work Programme on Electronic Commerce to the General Council, adopted by the CTS on 19 July 1999, records that ‘[s]ome delegations expressed a view that these issues were complex and needed further examination’121 (emphasis added). This note was quoted by the panel in US–Gambling when it remarked that the principle of ‘technological neutrality … seems to be largely shared among WTO Members’122 (emphasis added). The Council’s report on the e-commerce discussions from March 1999 referred to it as an issue on which a common understanding ‘appeared to be emerging’ (emphasis added). It went on to suggest, without substantiation, that the technological neutrality of the Agreement would ‘mean that electronic supply of services is permitted by specific commitments unless the schedule states otherwise’.123 India recorded its dissent in various other WTO forums where e-commerce was being discussed. In the Committee on Trade and Development in December 2000, India’s representative objected to statements in briefings on e-commerce by the Secretariat (and international organizations), saying: … she had heard it stated that the GATS guaranteed the right to do business electronically, that this was neither accidental nor incidental, and that this had been in the mind of some negotiators involved in the GATS. She had also heard it said that technological neutrality was fundamentally important and that this was an issue which had emerged from the work programme. She said that she had revisited the reports made by the subsidiary bodies to the General Council, and could not find any agreement by Members that these were conclusions that had been collectively reached124 (emphasis added). In May 2001, a communication to the General Council from Mercosur regarding the Work Programme on e-commerce set out a number of horizontal and sectoral issues that required more analysis. The list included ‘the scope of the GATS with respect to the electronic delivery of services, in particular the issues relating to the so-called concept of technological neutrality of the Agreement and the distinction between modes of supply 1 and 2’.125 Venezuela echoed that call, on behalf of a number of Latin American countries.126 At the following General Council meeting Saint Lucia ‘challenged the notion of technological neutrality, as it could have far-reaching impact on future commitments, including across-the-board adoption of commitments in terms of the removal of barriers, the extension of commitments in one sector to a complimentary [sic] sector, or the adoption of regulatory principles without regard to the discretion built into the GATS’.127 Several months later Cuba stressed the development implications of the interpretation.128 Similar dissent was recorded in relation to financial services. India advised the Committee on Financial Services in 2001 that ‘its capital was in the process of examining the issue of technological neutrality vis-à-vis financial services’, and that ‘India’s preliminary view was that given the bottom-up approach of the GATS, the commitments for new services delivered through new technologies would have to be taken afresh and existing commitments would not apply to them’.129 Several years later, Uruguay rebutted an assertion from Switzerland that ‘[e]ven though there was no precise reference to technological neutrality in the GATS, that was assumed by the Agreement’. Uruguay said ‘the concept of “technological neutrality” was not in the GATS. That was a legal interpretation by the Swiss delegation, but there was no agreement among Members on that issue’.130 The Philippines131 and Malaysia132 supported Uruguay. Technological neutrality, and the problems with classifications and modes, are serious legal quandaries. Technologies have transformed the realities of the services to which the GATS applies. But those technologies are not development neutral. Nor are the foreign suppliers of those services. The digital domain is not a level playing field. An expansion of commitments on market access or national treatment based on a reinterpretation of classifications or modes, let alone technological neutrality would seriously violate the foundations of the agreement itself. Brazil acknowledged this in its paper tabled in April 2018: ‘it seems unreasonable to assume that commitments undertaken by Members in the early 90's can be automatically extended, under the technological neutrality argument, to cover the completely new and revolutionary businesses models based on digital environment.’133 How might this quandary be resolved? The legal answer rests in the Marrakesh agreement, which sets out a process for resolving matters of interpretation.134 That process has not been pursued to clarify the meaning of any contested provisions in the GATS. Brazil has suggested a technical solution, where existing commitments are not subject to technological neutrality, but new commitments would be. The political answer lies, as it always has in the WTO, with the construction of consensus. That will not be achieved through unilateral assertions that defy both legal logic and the official record. It requires a bone fide commitment to address the new realities of the digital domain in ways that pay more than lip service to the development acquis. III. WHERE TO FROM HERE? The WTO has become paralysed, for good reason. Its foundations were laid by powerful states who sought a system of global rules that would benefit their strategic and commercial interests. They promised developing countries that multilateralism would blunt the abuse of raw power by establishing a rules-based system that was negotiated on the basis of equality between states and conducted through consensus decision-making. They dictated the Uruguay round agenda and the outcomes on agriculture, textiles, intellectual property rights and services, among others. In return, developing countries secured concessions within those parameters, with the prospect that future negotiations might rebalance the embedded asymmetries. The Doha ‘Development’ Round was meant to do that, at least in part. It has not. Now the same powerful players want to bury the Doha round and to negotiate new rules on e-commerce that serve their current strategic, economic, and corporate interests. Importing such rules into the WTO could herald a transformation of the WTO that is as radical as the Uruguay round was for the General Agreement on Tariffs and Trade when it concluded more than twenty years ago. They are facing a principled response from a majority of developing countries for whom the stakes are high enough to resist. Electronic commerce is fast becoming a proxy battleground for the future of the WTO. The formal mandate of the Work Programme and the informal WTO and GATS acquis require a genuine commitment to advancing development. To date, the WTO has not lived up to that. Nor will a TPP-style e-commerce agenda. If the WTO is to survive as a multilateral institution, that mandate and acquis must drive, and circumscribe, the e-commerce agenda, including in the GATS. In the words of the African Group leading into the MC11: The centrality of development in the WTO is the raison d’être of our Membership. Indeed, we expect that development, in particular Special and Differential Treatment provisions, remain at the core of both existing and future WTO Agreements.135 WTO Members need to reflect on this observation as the pressure mounts to redefine and expand their GATS obligations in the name of e-commerce. They have three choices. They can address the unresolved questions and unfinished business of the GATS in a manner that is faithful to its development acquis. The current stalemate can remain, recognizing that ambiguities carry legal risks but also leave some space to move. Or the dominant players can assume that the WTO should and will remain an arena where their voice prevails and they alone can exercise a veto. If they choose the latter they will jeopardize the future of the WTO. Funding This research was partially supported by a Marsden Fund grant from the Royal Society of New Zealand and a travel grant from the IDB-INTAL to present the paper at the MC11 think Track in Buenos Aires in December 2017. Footnotes 1 Shawn Donnan, ‘US calls time on Doha trade negotiations’, Financial Times, 13 December 2015, https://www.ft.com/content/2f9a7ee4-a190-11e5-bc70-7ff6d4fd203a (visited 10 February 2018). 2 ‘The Road to the 11th Ministerial Conference, 10-13 December 2017, Buenos Aires, Argentina’, South North Development Monitor, 13 December 2017, https://www.twn.my/MC11.htm (visited 10 February 2018). 3 See ‘President Obama: Writing the rules for 21st century trade’, 18 February 2015, https://obamawhitehouse.archives.gov/blog/2015/02/18/president-obama-writing-rules-21st-century-trade (visited 10 February 2018). 4 Work Programme on Electronic Commerce. Adopted by the General Council on 25 September 1998, WT/L/274, 30 September 1998, pursuant to the Ministerial Declaration on Global Electronic Commerce, adopted on 20 May 1998, WT/MIN(98)/DEC/2. 5 WT/L/274, para 1.3. 6 USTR (2016), The Trans-Pacific Partnership, https://ustr.gov/sites/default/files/TPP-Ensuring-a-Free-and-Open-Internet-Fact-Sheet.pdf (visited 10 February 2018). 7 See, for example, Republic of Rwanda (2017), National Data Revolution Policy, April 2017, and more generally, African Union Commission (2015), Agenda 2063. Framework Document. The Africa We Want, September 2015. 8 The WTO lists the group members as Argentina, Chile, China, Colombia, Costa Rica, Kazakhstan, Kenya, Mexico, Moldova, Montenegro, Nigeria, Pakistan, Sri Lanka, and Uruguay. https://www.wto.org/english/thewto_e/minist_e/mc11_e/briefing_notes_e/bfecom_e.htm (visited 10 February 2018). 9 For example, General Council, Work Programme on Electronic Commerce. Trade Policy, the WTO and the Digital Economy. Communication from Canada, Chile, Colombia, Côte d'Ivoire, the European Union, the Republic of Korea, Mexico, Montenegro, Paraguay, Singapore and Turkey, JOB/GC/116, 13 January 2017, p. 6. 10 Work Programme on Electronic Commerce. Ministerial Decision of 13 December 2017, 18 December 2017, WT/MIN(17)/65. 11 The EU and its Member States constituted 29 of the 70 signatories. 12 In addition to the Friends group, developing country signatories included Bahrain, Brazil, Brunei, Cambodia, Guatemala, Lao, Malaysia, Myanmar, Panama, Peru, Qatar, and Turkey. 13 Joint Statement on Electronic Commerce, 13 December 2017, WT/MIN(17)/60. 14 For example, provisions on disclosure of source codes, network management practices, and unsolicited messages or spam. 15 Notably the privacy concerns of the EU. See European Union (2017), Communication on Exchanging and Protecting Personal Data in a Globalised World, COM(2017). 16 General Council, WTO Negotiations on Trade-related Aspects of E-Commerce. Elements of a Potential Approach Under the Framework of the Joint Statement on Electronic Commerce. Communication from Argentina, Colombia and Costa Rica, JOB/GC/174, 6 April 2018, para 3, calls for ‘bindings of market opening in e-commerce-related sectors of trade in goods and services’ (original emphasis). 17 Jane Kelsey, ‘From GATS to TiSA. Pushing the Trade in Services Regime beyond the Limits’, in Marc Bungenberg et al. (eds), European Yearbook of International Economic Law (2016) 119–51, at 130–34. 18 There is a growing and contested literature on the development impacts of the new e-commerce template, specific trade impacts for service-intensive goods and the fiscal consequences of a permanent ban on customs duties for electronic transmissions. E.g. Rashmi Banga, Rising Product Digitalisation and Losing Trade Competitiveness (2017), UNCTAD/GDS/ECIDC/2017/3; Rashmi Banga, Permanent Moratorium, Trends in Cross-Border E-Commerce and Internet Governance (London: Commonwealth Secretariat, 2017); Abhijit Das, WTO Negotiations on E-Commerce: Uncertain Gains but Certain Losses for Developing Countries (New Delhi: Centre for WTO Studies, 2017); Alberto Lemma, E-commerce: The Implications of Current WTO Negotiations for Economic Transformation in Developing Countries (London: Supporting Economic Transformation, 2017); Biswajit Dhar, Electronic Commerce and the WTO: The Changing Contours of Engagement (Madhyam Briefing Paper #21, New Delhi, 2017); Jane Kelsey, The Risks for ASEAN of New Mega-Agreements the Promote the Wrong Model of e-Commerce (ERIA Discussion Paper Series ERIA-DP-2017-10, 2017) 17–18 and Table 1; Parminder Jeet Singh, Digital Industrialisation in Developing Countries: A Review of the Business and Policy Landscape (London: Commonwealth Secretariat, 2017); Parminder Jeet Singh, Report on Developing Countries in the Emerging Global Digital Order – a Critical Geopolitical Challenge to which the Global South Must Respond (New Delhi; South Centre: IT for Change, 2017), ‘WTO MC11: Issues at Stake for Developing Countries, Informal Note on MC11’, 6 November 2017; Kati Suominen, ‘Fuelling Trade in the Digital Era. Policy Roadmap for Developing Countries’ (Geneva: International Centre for Trade and Sustainable Development (ICTSD), 2017). 19 General Council, Global Electronic Commerce. Proposal by the United States, WT/GC/W/78, 9 February 1998. The USA proposed the permanent absence of customs duties on electronic transmissions. 20 PWC, ‘Global Top 100 Companies by Market Capitalization’, 31 March 2017, https://www.pwc.com/gx/en/audit-services/assets/pdf/global-top-100-companies-2017-final.pdf (visited 10 February 2018). 21 Jonathan Taplin, Why is Google Spending Record Sums Lobbying Washington?’, The Guardian, 30 July 2017, https://www.theguardian.com/technology/2017/jul/30/google-silicon-valley-corporate-lobbying-washington-dc-politics (visited 10 February 2018). 22 Jeremy Malcolm, Is Multi-Stakeholder Internet Governance Dying?, 20 December 2017, https://www.eff.org/deeplinks/2017/12/multi-stakeholder-internet-governance-dying (visited 10 February 2018). 23 The stated goals of the US Telecommunications Act of 1996 (Code 47 U.S.C.¶230(b)) are to ‘promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of telecommunications technologies’ but to ‘preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation’. 24 Interview quoted in Jane Kelsey, Serving Whose Interests? The Political Economy of Trade in Services Agreements (London: Routledge, 2008) 157–58. 25 Peter Drahos and John Braithwaite, Information Feudalism. Who Owns the Knowledge Economy? (New York: The New Press, 2003). 26 Shamel Azmeh and Christopher Foster, ‘The TPP and the Digital Trade Agenda: Digital Industry Policy and Silicon Valley’s Influence on New Trade Agreements’ (London School of Economics, Working Paper Series 2016, No. 16-175); Alana Abramson, ‘Google Spent Millions More Than its Rivals Lobbying Politicians Last Year’, Time Magazine, 24 January 2018, http://time.com/5116226/google-lobbying-2017/ (visited 10 February 2018). 27 The Team Tisa website is no longer functional, presumably because TiSA negotiations that were launched in 2013 have been suspended since November 2016. For a list of the Team TiSA members by sector see Jane Kelsey, TiSA - Foul Play (Brussels: UNI Global Union, 2017) 20, Table 2.2. 28 For example, the USTR Advisory Committee on Trade Policy and Negotiations, USTR Advisory Committee on Intellectual Property, the Industry Trade Advisory Committee on Information and Communications Technologies, Services and e-Commerce, and the US State Department's Advisory Committee on International Communications and Information Policy, https://ustr.gov/about-us/advisory-committees (visited 10 February 2018). 29 Crowell Moring, ‘Robert Holleyman’ (2017), https://www.crowell.com/Professionals/Robert-Holleyman 30 USTR, The Digital 2 Dozen, 13 April 2016, https://ustr.gov/sites/default/files/Digital-2-Dozen-Final.pdf (visited 10 February 2018). 31 An open letter dated 17 October 2016 was signed by seven groups: the Internet Association, Computer and Communications Industry Association, Information Technology Industry Council, BSA/Software Alliance, ACT/The App Association, Consumer Technology Association, https://internetassociation.org/tisa101716/. Another open letter from the Internet Association to Hon Robert Lighthizer was dated 16 May 2017, https://cdn1.internetassociation.org/wp-content/uploads/2017/05/Lighthizer-Letter-5.16.pdf (visited 10 February 2018). 32 The Australia—United States Free Trade Agreement, Entered into force on 1 January 2005. Chapter 16 of the AUSFTA is similar to KORUS, but significantly has no provisions on principles of access to and use of the Internet for electronic commerce or on cross-border information flows. 33 The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA/DR) first entered into force between the USA and El Salvador on 1 March 2006. Chapter 14 covers: electronic supply of services (technological neutrality); non-discrimination and no customs duties on digital products; transparency; and cooperation. 34 The US Korea Free Trade Agreement, Entered into force 15 March 2012 (KORUS). Chapter 15 covers: electronic supply of services (technological neutrality); non-discrimination and no customs duties on digital products; electronic authentication and signatures; online consumer protection; paperless trading; principles of access to and use of the Internet for electronic commerce; and cross-border information flows. 35 The TPP chapter on electronic commerce, inter alia, prohibits requirements that data are held locally and for the use of local computing facilities or content, the disclosure of source codes and the sharing of digital technology, alongside matters of Internet governance such as network management practices and unsolicited messages or spam. Complementary chapters of the TPP prohibit requirements for cross-border service suppliers to have local presence, albeit subject to reservations, and deepen regulatory constraints on financial services and telecommunications. Government are required to consult on new regulations with other the parties and their ‘interested persons’. 36 Twenty-three items of the original TPP were suspended. See Annex, Comprehensive and Progressive Agreement on Trans Pacific Partnership, 2017, https://www.mfat.govt.nz/assets/CPTPP/Comprehensive-and-Progressive-Agreement-for-Trans-Pacific-Partnership-CPTPP-English.pdf (visited 10 February 2018). The six ratifications required for entry into force were expected in early 2019. 37 Agreed article headings were: movement of information; online consumer protection; personal information protection; unsolicited commercial electronic messages; transfer or access to source code; open networks, network access and use of the Internet; location of computing facilities; electronic authentication and electronic signatures; customs duties on electronic transmissions; interactive computer services; international cooperation; security (not agreed). TiSA, draft Annex on Electronic Commerce, undated (November 2016), http://www.bilaterals.org/?tisa-draft-annex-on-electronic-32465 (visited 10 February 2018). 38 Art. 4. TiSA, draft Annex on Electronic Commerce, undated (November 2016). 39 These proposals were principally set out under the headings ‘Trade in Services, Including Telecommunications and Financial Services’, ‘Digital Trade in Goods and Services and Cross-border Data Flows’ and ‘Intellectual Property’. USTR, ‘Summary of Objectives for the NAFTA Renegotiation’, 17 July 2017, pp. 7–8, https://ustr.gov/sites/default/files/files/Press/Releases/NAFTAObjectives.pdf (visited 10 February 2018). 40 OECD, Principles for Internet Policy Making (Paris: OECD, 2014); G7, Principles and Actions on Cyber (2016); G20, Digital Economy Development and Cooperation Initiative (China: Hangzhou, 2016). 41 The Japan Mongolia Economic Partnership Agreement, Entered into force 7 June 2016. 42 Kelsey, above n 18. 43 Chapter 16, The Canada European Union Comprehensive Economic and Trade Agreement, signed on 30 October 2016 and provisionally entered into force on 21 September 2017. 44 The European Union proposal for Trade in Services, Investment and E-commerce: Chapter VI—Electronic Commerce, Tabled 12–17 July 2015 and published on 31 July 2015. http://trade.ec.europa.eu/doclib/docs/2015/july/tradoc_153669.pdf (visited 10 February 2018). 45 The EU Japan Economic Partnership Agreement: texts of the agreement, published 8 December 2017, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1684 (visited 10 February 2018). 46 EU Japan Economic Partnership Agreement, Section E, Subsection 5, Art. 6: Transfer of Information and Processing of Information. 47 Chapter 8, Art. 12; see European Union, Communication on Exchanging and Protecting Personal Data in a Globalised World, COM(2017). 48 Yumi Watanabe, ‘Japan-EU Data Transfers – Mutual adequacy findings under the APPI and GDPR’, 1 March 2018, Baker McKenzie, https://www.lexology.com/library/detail.aspx?g=9579f338-9fc3-4870-9520-f086d1a82584 (visited 10 February 2018). 49 General Council, Work Programme on Electronic Commerce. Non-Paper from theUSA, JOB/GC/94, 4 July 2016. The proposed rules covered: prohibiting digital customs duties; securing basic non-discrimination principles; enabling cross-border data flows; promoting a free and open internet; preventing localization barriers; barring forced technology transfers; protecting critical course code; enduring technology choice; advancing innovative authentication methods; safeguarding network competition; fostering innovative encryption products; building an adaptable framework for digital trade; preserving market-driven standardization and global interoperability; ensuring faster, more transparent customs procedures; promoting transparency and stakeholder participation in the development of regulations and standards; recognizing conformity assessment procedures. 50 General Council, Work Programme on Electronic Commerce. Reinvigorating Discussions on Electronic Commerce. Circulated at the request of Japan, JOB/GC/96/Rev 1, 14 July 2016. 51 General Council, Work Programme on Electronic Commerce, Trade Policy, the WTO, and the Digital Economy, JOB/GC/97, 14 July 2016. 52 Council for Trade in Services, Special Session. An enabling environment to facilitate online transactions. Communication from the European Union, TN/S/W/64, May 2017. 53 General Council, Possible Way Forward on Electronic Commerce. Communication from Japan, JOB/GC/130, 14 July 2017. 54 For a useful summary of the 2016 proposals see South Centre, ‘The WTO’s Discussions on Electronic Commerce’, Analytical Note SC/AN/TDP/2017/2, January 2017; see also South Centre, WTO MC11 (2017). 55 General Council, Work Programme on Electronic Commerce, Report of Panel Discussion on ‘Digital Policy and Development’. Communication from the African Group, JOB/GC/133, 21 July 2017, p. 2. 56 General Council, The Work Programme on Electronic Commerce, Statement by the Africa Group, JOB/GC/144, 20 October 2017, para 3.2. 57 General Council, Work Programme on Electronic Commerce, Electronic Commerce and Development, JOB/GC/117, 14 February 2017. See South Centre, WTO Discussions (2017). 58 Jake Colvin, ‘Geneva NFTC’s Global Innovation Forum Discusses Impact of Global E-Commerce on Small Business and Development’, 8(2) NFTC Council Highlights 10 (2018). 59 Friends for E-Commerce for Development, Mapping e-Trade for All Development Objectives into a WTO Framework for E-Commerce, April 2017. 60 General Council, Work Programme on Electronic Commerce. Draft Ministerial Decision. Communication from Costa Rica. JOB/GC/139, 10 October 2017. 61 General Council, Work Programme on Electronic Commerce, Aiming at the 11th Ministerial Conference. Communication from the People’s Republic of China and Pakistan, JOB/GC/110/Rev.1, 16 November 2016. 62 Owen Fishwick, ‘China in the Fast Lane on Digital Silk Road’, China Daily, 4 December 2017, http://www.chinadaily.com.cn/business/4thwic/2017-12/04/content_35201648.htm (visited 10 February 2018). 63 ‘WTO, eWTP, WEF Enabling E-commerce Launch Event’, 11 December 2017, https://www.wto.org/english/news_e/spra_e/spra206_e.htm (visited 10 February 2018). 64 India proposed the continuation of the Work Programme based on the existing mandate, subject to periodic reviews by the General Council of reports from the councils. General Council, Work Programme on Electronic Commerce, Communication from India, JOB/GC/153, 20 November 2017. 65 General Council, Work Programme on Electronic Commerce, JOB/GC/140/Rev5, 30 November 2017, supported by Australia, Canada, Chile, Colombia, the EU, Israel, South Korea, Mexico, Montenegro, New Zealand, Norway, Paraguay, Peru, Ukraine. 66 Spam, e-signatures, e-contracts, source codes, cyber-security, location of servers, use of data, and privacy protections are not self-evidently ‘matters that concern multilateral trade relations’. Many of the issues have previously been raised in directly relevant forums like the International Telecommunications Union and the United Nations, only to be blocked by those who are advocating their preferred version of those rules in the WTO: see Richard Hill, The New International Telecommunications Regulations and the Internet: A Commentary and Legislative History (New York: Schulthess/Springer 2013). 67 Joint Statement on Electronic Commerce, WT/MIN(17)/60, 13 December 2017. 68 E.g., John Brinkley, ‘Trump’s Disdain for WTO Portends Only Trouble’, Forbes, 8 March 2017, https://www.forbes.com/sites/johnbrinkley/2017/03/08/trumps-disdain-for-wto-makes-no-sense-portends-only-trouble/#678859b22f52 (visited 10 February 2018). 69 For example, JOB/GC/174; Exploratory Work on Electronic Commerce. Non-Paper from Brazil, JOB/GC/176, 12 April 2018; Joint Statement on Electronic Commerce Initiative. Communication from the United States, JOB/GC/178, 12 April 2018. 70 Ravi Kanth, ‘DG, Defying Mandates, Deputes his Officials to Attend Pluri-Meetings’, SUNS no. 8644, 19 March 2018. https://www.twn.my/title2/wto.info/2018/ti180313.htm (visited 10 February 2018). 71 See WTO, ‘Doha Round: What are they Negotiating?’, https://www.wto.org/english/tratop_e/dda_e/update_e.htm (visited 10 February 2018). 72 Critical academics, government officials, and non-government organizations believe the GATS intrudes too far into the domestic regulatory autonomy of sovereign states. This author is one of those: see Kelsey, above n 24, but accepts the reality of its existence. 73 https://www.wto.org/english/thewto_e/minist_e/min05_e/final_text_e.htm (visited 10 February 2018). 74 Kelsey, above n 17, at 138–39. 75 WTO, Guidelines on the accession of Least-Developed countries, https://www.wto.org/english/thewto_e/acc_e/cbt_course_e/c2s4p1_e.htm (visited 10 February 2018). 76 ICTSD, An Analysis of the WTO Accession Guidelines for Least Developed Countries, Information Note (Geneva: ICTSD, 2012) 10. 77 Art. XIII required negotiations on government procurement to begin within two years of GATS entering into force. Art. XV negotiations on trade-distorting subsidies had no time frame. Art. VI.4 provided for negotiation on certain forms of domestic regulation to develop ‘any necessary’ disciplines, again with no time frame—despite having the weakest mandate, the domestic regulations disciplines have been pursued by some developed countries with vigour. 78 https://www.wto.org/english/res_e/booksp_e/analytic_index_e/gats_02_e.htm#article10A (visited 10 February 2018). 79 E.g. WTO, Report of the Chairperson of the Working Party on GATS Rules, S/WPGR/21, 14 April 2011, pp. 1–2. 80 Emad Tinawi and Judson Berkey, ‘E-Services and the WTO: The Adequacy of the GATS Classification Framework’, OECD Forum on E-Commerce (2000) 7. 81 Aaditya Mattoo and Ludger Schuknecht, Trade Policies for Electronic Commerce (World Bank Policy Research Working Paper 2380, 2000) 2. 82 Tinawi and Berkey, above n 80, at 9. 83 WTO, Work Programme on Electronic Commerce, Submission by the United States, WT/GC/16, G/C/2, S/C/7, IP/C/16, WT/COMTF/17, 12 February 1999, p. 2. 84 WT/GC/16, p. 3. 85 WT/GC/16, p. 2. 86 JOB/GC/178, p. 3. 87 Domestic regulation is a fourth critical element, but it not covered here for space reasons. 88 WTO, Services Sectoral Classification List. Note by the Secretariat, MTN.GNS/W/120, 10 July 1991. 89 Some recent agreements use later versions of UNCPC or the International Standard Industrial Classification (ISIC). https://unstats.un.org/unsd/publication/seriesm/seriesm_4rev4e.pdf (visited 10 February 2018). 90 Mattoo and Schuknecht, above n 81, at 14 and Table 4. 91 Laura Altinger and Alice Enders, ‘The Scope and Depth of GATS Commitments’, The World Economy, May 1996, p. 316. 92 Mattoo and Schuknecht, above n 81, at 17. 93 OECD (2016), p.6. 94 For the challenge this poses to developing countries and LDCs see UNCTAD (2017), Rising Product Digitalisation and Losing Trade Competitiveness, UNCTAD, UNCTAD/GDS/ECIDC/2017/3 95 The two pre-existing ‘trade in services’ texts – the Canada US Free Trade Agreement (1988) and the services protocol to the Australia New Zealand Closer Economic Relations Trade Agreement (1989) - did not differentiate the delivery of services by ‘mode’. Instead, they covered services that were provided ‘within or into the territory’ of the other Party. 96 GATT, Scheduling of Initial Commitments on Trade in Services. Explanatory Note, MTN.GNS/W/164, 3 September 1993, pp.8-9; and Addendum of 30 November 1993 97 OECD (2016), Towards a G20 initiative on measuring Digital Trade: mapping challenges and framing the way forward, OECD: Paris, p.1-2, http://www.oecd.org/g20/summits/hamburg/Towards-a-G20-Initiative-on-Measuring-Digital-Trade.pdf (visited 10 February 2018). 98 MTN.GNS/W/164 99 WTO, Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services. Adopted by the Council for Trade in Services on 23 March 2001, S/L/92, 28 March 2001. 100 MTN.GNS/W/164, 9 101 Altinger Enders, above n 91, at p. 320 Table 5. 102 Many contemporary FTAs combine the modes. That simplifies application of the rules to services for the purpose of that agreement, but makes it difficult to compare those obligations with agreements that use the four modes, including in the application of most-favoured-nation treatment. 103 Tinawi and Berkey, above n 80, at 6–7. 104 Tinawi and Berkey, above n 80, at 6 (original emphasis). 105 I am indebted to Sanya Reid Smith for her research into the WTO archives for discussions of technological neutrality in the GATS. 106 SL/92, para 47. 107 KORUS Art. 15.2. 108 Mattoo and Schuknecht, above n 81, at 16–17. India used these arguments, albeit without attribution, in the General Council in 2001: WT/GC/M/65, 18 June 2001, para 205. 109 Mattoo and Schuknecht, above n 81, at 16. 110 General Council, WTO Agreements and Electronic Commerce, WT/GC/W/90, 14 July 1998, para 8. 111 Group on Basic Telecommunications, Report of the Group on Basic Telecommunications, S/GBT/4, 15 February 1997, p. 3. 112 WT/GC/16, 12 February 1999, p. 3. 113 General Council, Preparations for the 1999 Ministerial Conference. WTO Services Negotiations. A Communication from Australia, WT/GC/W/353, S/C/W/126 11 October 1999, para 15. 114 Council for Trade in Services, Report of The Meeting Held On 14 and 15 December 1998. Note by the Secretariat, S/C/M/32, 14 January 1999, p. 4. 115 Council for Trade in Services, Report of The Meeting Held On 23 and 24 November 1998. Note by the Secretariat, S/C/M/31, 9 December 1998, p. 2. 116 Committee on Specific Commitments, Report of the Meeting held on 18 September 2014, S/CSC/M/71, 15 October 2014, para 1.13. 117 Committee on Specific Commitments, Report of the Meeting held on 14 October 2015, S/CSC/M/74, 27 November 2015, para 2.35. 118 Council for Trade in Services, Draft: Interim Report on Electronic Commerce, S/C/W/100, 17 March 1999, para 16. 119 Council for Trade in Services, Report of the Meeting held on 22 and 24 June 1999, S/C/M/37, 20 July 1999, para 25. 120 S/C/M/37, 20 July 1999, para 28. 121 Council for Trade in Services, Revised Draft. Work Programme on Electronic Commerce, Progress Report to the General Council, S/C/W/115/Rev.1, 20 July 1999, para 4. 122 United States—Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/R, 10 November 2004, para 6.285. 123 Council for Trade in Services, Interim Report to the General Council: Work Programme on Electronic Commerce, S/C/8, 31 March 1999, para 4. 124 Committee on Trade and Development, Note on the meeting of 27 October and 8 November 2000, WT/COMTD/M/31, 14 December 2000, para 57. 125 Electronic Commerce, Horizontal and Sectoral Issues which Require Further Analysis. Communication from MERCOSUR, WT/GC/W/434, 7 May 2001, para 8. 126 General Council, Minutes of Meeting of 8 and 9 May 2001, WT/GC/M/65, 18 June 2001, para 116. 127 Council for Trade in Services, Special Session, Report of the Meeting held on 9 to 12 July 2001, S/CSS/M/10, 21 September 2001, para 204. 128 Council for Trade in Services, Special Session, Report of the Meeting held on 5, 8, and 12 October 2001, S/CSS/M/12, 28 November 2001: ‘the definition of technological neutrality was not included in the GATS, as it had been introduced in the negotiation on basic telecom in a very specific context. Developing countries could consider when that concept would affect their flexibility and their right to condition entry to their markets depending on the technology to be used, and perhaps transferred,’ para 143. 129 Committee on Trade in Financial Services, Report of the Meeting Held on 9 May 2001, S/FIN/M/31, 1 June 2001, para 11. 130 Committee on Trade in Financial Services, Report of the Meeting Held on 16 May 2003, S/FIN/M/40, 30 June 2003, para 28. 131 S/FIN/M/40, 30 June 2003: ‘There was no reference to technological neutrality in the GATS, and such a concept had not really been assumed by the GATS. In any case, that was only Switzerland's interpretation,’ para 34; see also Committee on Trade in Financial Services, Report of the Meeting Held on 6 October 2003, S/FIN/M/42, 12 November 2003: ‘technological neutrality was not a basic assumption of the GATS. It was not provided for, either explicitly or implicitly, in the GATS,’ para 16. 132 S/FIN/M/40, 30 June 2003: ‘There was no agreement among Members on the actual meaning of technological neutrality. The Malaysian delegation did not share Switzerland's views on that issue,’ para 35. 133 JOB/GC/176, p. 4. 134 Art. XIX vests the Ministerial Conference and the General Council with exclusive authority to adopt interpretations of the WTO agreements. 135 General Council, Ministerial Conference and Outcome Document, Communication from the African Group [and others] JOB/GC/158. © The Author(s) 2018. Published by Oxford University Press. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

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Journal of International Economic LawOxford University Press

Published: May 31, 2018

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