1. understanding and shaping digital trade rules
PD, Dr.iur. Mira Burri EFTA Geneva 22 november 2018

2. talking points
setting the scene: underscoring the importance of data and data crossing borders
understanding the existing global trade framework for digital trade
understanding the dynamics of the current global trade framework; digital trade rule-making in FTAs
focus: CPTTP as the most advanced model so far
thinking ahead: what rules are essential? how can we reconcile conflicting interest, such as free data flows and privacy protection? what are the steps to get us there?
PD, Dr. iur. Mira Burri

3. like other factors of production, such as natural resources and human capital, it is increasingly the case that much of modern economic activity, innovation and growth cannot occur without data
the transformative potential is great and refers not only to new ‘digital native’ areas, such as search or social networking, but also to ‘brick-and-mortar’, physical businesses
PD, Dr. iur. Mira Burri

4. effects on trade
digitization drives growth: global flows of goods, foreign direct investment and data have increased current global GDP by 10% compared to what would have occurred in a world without any flows; this value was equivalent to USD 7.8 trillion in 2014 alone; data flows account for USD trillion of this effect
growing share of digital trade: approximately 12% of the global goods trade is conducted via international electronic commerce; some 50% of the world’s traded services are already digitised
digitization is making global flows more inclusive; yet, ’winner-takes-all’ scenarios also apply
PD, Dr. iur. Mira Burri

5. key words in trade policy jargon
global value chains (GVCs)
servicification
cross-border data flows
data must cross borders:
cross-border data flows now generate more economic value than traditional flows of traded goods
61% (USD billion) of US service exports and 53% of US imports were digitally delivered in 2012; in absolute terms, the amount of digitally delivered exports and imports is even larger in the EU, which digitally delivered USD 465 billion in exports and spent USD 297 billion on imports in 2012 (WEF 2016)
PD, Dr. iur. Mira Burri

6. new digital trade barriers
localization measures
data privacy and protection measures
intellectual property related measures
censorship
cybersecurity
the rise of new digital protectionism ?
PD, Dr. iur. Mira Burri

7. trade policy responses to the digital transformation
PD, Dr. iur. Mira Burri

8. trade law matters for all layers of the internet
content layer (humanly meaningful messages, communication)
logical layer (standards, protocols, software)
physical layer (networks, hardware, all devices connected)

9. the law of the World Trade Organization (WTO)
a set of comprehensive rules on trade in goods, services, and IP protection
far-reaching non-discrimination principles binding on all members
high level of legalization:
possibility to go to ‘court’
possibility for legal adaptation through case-law
possibility for reconciliation of trade and non-trade concerns
many rules specific for digital trade: e.g. computer and relates services
PD, Dr. iur. Mira Burri

10. WTO: too slow, too ‘offline’
failed rules adaptation
1998 WTO E-Commerce Programme: great forward thinking  no action
no agreement even on basic issues, let alone on complex matters, such as classification: goods vs. services; telecom vs. audiovisual vs. computer-related services
some but insufficient compensation through case-law
PD, Dr. iur. Mira Burri

11. venue-shopping: FTAs
PD, Dr. iur. Mira Burri

12. Free Trade Agreements (FTAs)
the US Digital Agenda: 11 US FTAs since 2002
spillovers of templates in non-US FTAS
3 FTA chapters to follow:
dedicated e-commerce chapters
services chapters
IP chapters
addressing digital governance is a cross-sector issue
WTO+ ; but not only
data flows as the new negotiation topic
PD, Dr. iur. Mira Burri

14. evolution of digital trade provisions in FTAs
by september 2018, 291 FTAS:
98 FTAs with e-commerce/digital trade provisions
73 FTAs with e-commerce/digital trade chapters
13 FTAs with general data flows provisions
64 FTAs with specific data flows provisions on financial services
61 FTAs with specific data flows provisions on telecommunications
9 FTAs with provisions on data localization

15. digital trade provisions in FTAs

16. digital trade provisions in FTAs

17. Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP)
the CPTPP chapter on e-commerce is the most comprehensive so far
identical with the TPP e-commerce chapter and in essence US-driven
substance:
ban on customs duties on electronic transmissions, including content transmitted electronically
non-discriminatory treatment of digital products
a legal framework governing electronic transactions consistent with the principles of the UNCITRAL Model Law on Electronic Commerce 1996 or the UN Convention on the Use of Electronic Communications in International Contracts 2005
electronic authentication and electronic signatures
online consumer protection
paperless trading
spam
source code
net neutrality
cooperation, including on cybersecurity
PD, Dr. iur. Mira Burri

18. Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP)
specific provisions on data flows:
explicit ban on data protectionism: ‘Each Party shall allow the cross- border transfer of information by electronic means, including personal information, when this activity is for the conduct of the business of a covered person’
localization measures prohibited
restrictions are permitted only for legitimate purposes if they do not amount to ‘arbitrary or unjustifiable discrimination or a disguised restriction on trade’
policy space of domestic data protection regimes
PD, Dr. iur. Mira Burri

19. USMCA (2018)
United States Mexico Canada Agreement (update of NAFTA) follows and expands the CPTPP model
chapter on ‘Digital Trade’
new elements: e.g. open government data; commitment to some data protection principles
some certainty that the US will continue this template
PD, Dr. iur. Mira Burri

20. USMCA (2018): art. 19.8: Personal Information Protection
Parties recognize the economic and social benefits of protecting the personal information of users of digital trade and the contribution that this makes to enhancing consumer confidence in digital trade.
Each Party shall adopt or maintain a legal framework that provides for the protection of the personal information of the users of digital trade. In the development of its legal framework for the protection of personal information, each Party should take into account principles and guidelines of relevant international bodies, such as the APEC Privacy Framework and the OECD Recommendation of the Council concerning Guidelines governing the Protection of Privacy and Transborder Flows of Personal Data (2013).
A Party may comply with this obligation by adopting or maintaining measures such as a comprehensive privacy, personal information or personal data protection laws, sector-specific laws covering privacy, or laws that provide for the enforcement of voluntary undertakings by enterprises relating to privacy.
PD, Dr. iur. Mira Burri

21. highlighting trends (1)
emergence of a specific trade regime tailored to digital products and services
digital trade not so much about market access but about interfacing domestic regimes, so as to provide interoperability and some certainty
beyond-the-border regulation of the digital economy
value of international trade law (if not through the WTO) increased for data flows
still, regulatory framework patchy and not terribly innovative (EU has been cautious; some countries like EFTA have not developed digital trade strategies in their FTAs)
PD, Dr. iur. Mira Burri

22. highlighting trends (2)
experience gathered on multiple digital trade issues
agreement on ‘soft’ e-commerce issues, such as paperless trading, electronic contracts, custom duties moratorium
disagreement on data flows vs. the protection of privacy and national security
PD, Dr. iur. Mira Burri

23. moving forward …
PD, Dr. iur. Mira Burri

24. elements of a future-oriented approach
strong advantages for the multilateral forum of the WTO
form: Reference Paper or Data Economy Agreement (as a plurilateral deal); sequencing and graduation of obligations as a way to achieve political feasibility
contents:
agreement on electronic contracts; electronic authentication and trust services; consumer protection; spam; custom duties moratorium
limitations on localization measures; free flow of data but room for domestic privacy rules
need to find reconciliation mechanisms in the sense of art. XIV GATS and art. XX GATT
PD, Dr. iur. Mira Burri

25. thank you for your attention !