Data Flows and the JSI Negotiations

Industry worldwide has consistently asked the trade community for binding rules to ensure the flow of data across all aspects of commercial activity. DTN joins the many other industry groups that have emphasized that this must be at the core of the outcome of the JSI.

We believe that what 21st-century commerce needs is not revolutionary, but evolutionary, for the following reasons:

  1. The General Agreement on Trade in Services’ Annex on Telecommunications, Article 5,1 requires all Members to allow access to all telecommunications and services infrastructure, specifically including the “movement of information across borders,” where necessary “for the supply of a service included in its schedule.”
  2. This has been confirmed in decisions rendered under the Dispute Settlement Understanding2
  3. A number of bilateral and plurilateral agreements have created obligations that embody what we are requesting in the JSI.3

What we call upon negotiators to commit to the same obligations provided by GATS on a
horizontal basis, for all economic activity covered by the Agreement.

Data flows and other public policy priorities

We understand that a broad commitment to the flow of data will be accompanied by exceptions or other forms of derogation for public policy priorities – just as they have since the conclusion of GATS in 1994. There are several such areas to consider and we will provide details on how those can be accommodated, however in this statement we shall address just one of the most fundamental: the protection of personal data.

Responsible businesses recognize and value-effective and robust data protection and have routinely said so in public statements.4

We believe that JSI provisions on data protection should include the following elements:

  1. JSI Parties must implement and/or maintain an effective data protection framework in law that embodies the major elements fundamental to robust data protection frameworks in multilateral and national legal systems: Openness, Collection Limitation, Purpose Specification, Use Limitation, Security, Data Quality, Access and Correction, and Accountability.
  2. Parties should ensure information about their data protection framework is published for the benefit of both individuals and businesses, and that it is particularly important for such information to help ensure businesses understand how to comply with national rules when trading is increasingly global. This is especially important for MSMEs who by their nature have less resources to spend on legal compliance issues given their size.
  3. Parties should apply for data protection in a way that does not discriminate between commercial operations of their own businesses vis a vis those of other Parties – or, indeed, to the detriment of natural persons of any Party.

These three provisions feature in bilateral and multilateral trade agreements but often also appear in data protection rules on non-trade-related agreements.5

In addition, we submit for consideration that the JSI should include a further obligation to clarify that all Parties must create or maintain provisions that allow the transfer of personal information between the territory of all Parties while recognizing that it is for data protection authorities to specify the requirements necessary.

Many national data protection systems provide for extraterritorial use of personal information in one way or another – that covering the largest trading bloc, the European Union, is perhaps the most well-known example, with multiple options to facilitate the transfer of personal data.6

Among the good reasons for this obligation are:

  1. It creates certainty for the industry but also for everyone else. Coupled with the obligations previously described to disclose the essential elements of data protection and compliance required, this will improve transparency for the benefit of everyone.
  2. It does not diminish data protection in any way. By making explicitly clear that it remains for relevant authorities to define what the requirements are for transfers to take place, each Party retains the same freedom to define how personal information must be protected when it leaves national territory as they do now.

If the JSI can take the best of the three characteristics above, already used in many other agreements, it creates a new ‘floor’ of minimum data protection required in a trade context which can only be of benefit to all Parties’ citizens and industry. Including an obligation to allow transfers creates predictability without impacting national choices on data protection in any way.

DTN has developed examples illustrating one way that the concepts in this statement could be captured in the agreement and we would be pleased to provide that to interested delegations upon request.

Delegations are invited to contact DTN’s Geneva Representative, Nick Ashton-Hart, at their convenience at the details below or by email at

The Moratorium on Customs Duties on Electronic Transmissions

The moratorium on customs duties on electronic transmissions should be made permanent.

The Digital Trade Network, whose supporters collectively represent millions of businesses of all sizes in more than 173 countries, support the renewal of the moratorium on customs duties on electronic transmissions. In fact we believe it should be made permanent.
Given the discussion of the moratorium amongst WTO Members to take place at the World Trade Organisation on 27th November 2018, we would like to stress the following points.

The moratorium covers both data per se but also content transmitted

First, the moratorium covers both data transmissions per se (“electronic transmissions”) but also content transmitted electronically. Interpretations which suggest otherwise don’t make legal or logical sense especially given that state practice in subsequent FTAs routinely makes this explicit. Moreover, this has been reaffirmed by the WTO Secretariat: JOB/GC/114 reviews how the moratorium protects digitisable goods with a physical analogue such as digital books, music, and video. The moratorium also covers digitally native products, such as software and apps: as a result these have never been subject to tariffs in any format, anywhere.
According to the WTO Secretariat there are 56 FTAs incorporating the moratorium, including 19 where all parties are developing countries. The CPTPP stipulates that Parties may not impose duties on electronic transmissions, “including content transmitted electronically.” In fact, the majority of related FTA provisions explicitly prohibit duties on digital products, content, or other electronic deliveries. In addition, there are regional efforts underway within APEC to make the moratorium permanent.

We do not believe that harmonising tariffs upwards is the right approach to raising revenue.

Second, Some Members have highlighted a difference in tariff rates between a digitally delivered product (such as an eBook) and its analog physical equivalent resulting in a loss of revenue. We do not believe that harmonizing tariffs upwards is the right approach to raising revenue given that all available evidence suggests that any limited revenue from duties lost is at most tiny compared to the value of
digitized products more broadly. Moreover, Members may, for example, levy taxes
on consumption or sale within the domestic market to ensure equivalent treatment. Moreover, doing so is far less complex given that assessing duty on an intangible would be very difficult to do. It would likely be paid by the importer – and that entity would already be liable for tax on sales in the domestic market. Instead of creating two separate obligations, it would be far more efficient to have only one.

A failure to retain the moratorium would send a terrible message to the
world: that increasing tariffs on an ever-increasing volume of world trade is OK. A mountain of evidence over decades of analysis confirms the opposite is true.

Last, but definitely not least, we believe that the moratorium represents something fundamentally important: it is the first time an entire area of economic activity has been tariff-free worldwide from inception. As a core objective of trade policy is to reduce tariffs to further economic development, a failure to retain the moratorium would send a terrible message to the world: that increasing tariffs on
an ever-increasing volume of world trade is OK. A mountain of evidence over decades of analysis confirms the opposite is true.

Digital Trade and the Post Covid-19 Economy

Digital Trade and the Post Covid-19 Economy:

The Covid-19 pandemic confronts trade policymakers with unprecedented and urgent challenges:

  • To ensure a global recession does not become a global depression;
  • To energize the recovery of international trade in goods and services.
  • To unlock the full potential of cross-border digital trade for economic growth.

This extraordinary shock requires an extraordinary response. The goal must be ‘to build back
better,’ not simply resume where we left off before the pandemic struck. New ways of
working and greater global collaboration are both vital to advance multilateralism,
strengthen global value chains, reduce poverty and increase shared prosperity.
Concluding a broad-based, ambitious agreement on the digital economy in 2020 is
achievable and necessary to addressing these challenges. The Joint Statement Initiative (JSI)
on Electronic Commerce negotiations must provide commitments the world economy needs,
not what is easy to agree upon. This is not the time for ‘low hanging fruit’ or ‘early harvests.’ A
comprehensive and ambitious outcome by 2020 is needed to address extraordinary
challenges. The outcome of the JSI is critical to progress.
More than one-third of global GDP depends upon digitalisation. All economies and
businesses from MSMEs to MNCs need ambitious commitments to drive economic recovery,
generate welfare gains by leveraging technology, and accelerate on key global policy
objectives, such as climate change and the Sustainable Development Goals.

To that end, DTN calls on the JSI on Electronic Commerce to:

  • Start meeting and negotiating electronically now. The WTO must catch up with other
    international institutions who are already working online and the JSI should lead by
  • Agree on milestones and deadlines towards a 2020 conclusion – and stick to them.
  • Resolve difficult issues and create an agreement that is ambitious and comprehensive. Members need to invest political will to deliver.
  • Ensure that developing, and especially least developed Members have access to
    technical assistance to enhance their participation in the negotiations.
  • Commit to ensuring the successful implementation of the agreement by provisioning
    for the necessary technical assistance and capacity building resources in parallel with
    the negotiations. The WTO Secretariat should be tasked with facilitating the necessary
    interagency cooperation.

We call upon the Ministers of participating Members to agree on these points, remain
personally engaged and commit the political will to resolve outstanding issues for a 2020
DTN will provide further encouragement and ideas in due course.