The United States has put forward a proposal for the recently launched e-commerce talks at the WTO. Bloomberg's Bryce Baschuk broke the news (and uploaded the document), noting there are many similarities to the U.S.-Mexico-Canada Agreement (USMCA) Digital Trade Chapter (19). He's right. A lot of the proposal appears to be a copy and paste of what's in the USMCA text, including provisions borrowed from the Financial Services Chapter (17). But there are a few discrepancies, some minor, others perhaps a little more substantive. Here's a run down of all the differences:
There's a new definition in the proposal that doesn't appear in USMCA: "electronic transmission or transmitted electronically." There are also two definitions from the USMCA that don't appear in the proposal, "trade administration document" and "unsolicited electronic communication." In terms of the text of the definitions, the definition for "digital product" omits the clarifying phrase "For greater certainty" from the second sentence.
Article 2 (Scope and General Provisions) omits the introductory language of article 19.2.1 from USMCA, which reads:
The Parties recognize the economic growth and opportunities provided by digital trade and the importance of frameworks that promote consumer confidence in digital trade and of avoiding unnecessary barriers to its use and development.
Article 2.2(b) is new:
2. This Agreement does not apply:
...
(b) to a service supplied in exercise of governmental authority; or
...
Article 3 (Customs Duties) has some small tweaks as well. It reads "No party shall impose customs duties on electronic transmissions, including content transmitted electronically, between a person of one Party and a person of another Party." In comparison the USMCA text reads:
Article 19.3: Customs Duties
1. No Party shall impose customs duties, fees, or other charges on or in connection with the importation or exportation of digital products transmitted electronically, between a person of one Party and a person of another Party.
2. For greater certainty, paragraph 1 does not preclude a Party from imposing internal taxes, fees, or other charges on a digital product transmitted electronically, provided that those taxes, fees, or charges are imposed in a manner consistent with this Agreement.
As you can see, there's a slight change in language to the first provision. The second provision is completely omitted from the WTO proposal, though it's not clear that keeping it in would really add any clarity.
Article 7 reads mostly like USMCA Article 19.8, with a few minor changes. First, the introductory language of that article in the USMCA is again removed:
1. The 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.
Second, Article 4 incorporates the second sentence from Article 19.8.3, but omits the first sentence entirely, which reads (the italicized is the language copied over):
3. The Parties recognize that pursuant to paragraph 2, key principles include: limitation on collection; choice; data quality; purpose specification; use limitation; security safeguards; transparency; individual participation; and accountability. The Parties also recognize the importance of ensuring compliance with measures to protect personal information and ensuring that any restrictions on cross-border flows of personal information are necessary and proportionate to the risks presented.
Finally, there's a complete omission from the WTO proposal of online consumer protection, found in USMCA Article 19.7:
Article 19.7: Online Consumer Protection
1. The Parties recognize the importance of adopting and maintaining transparent and effective measures to protect consumers from fraudulent or deceptive commercial activities as referred to in Article 21.4.2 (Consumer Protection) when they engage in digital trade.
2. Each Party shall adopt or maintain consumer protection laws to proscribe fraudulent and deceptive commercial activities that cause harm or potential harm to consumers engaged in online commercial activities.
3. The Parties recognize the importance of, and public interest in, cooperation between their respective national consumer protection agencies or other relevant bodies on activities related to cross-border digital trade in order to enhance consumer welfare. To this end, the Parties affirm that cooperation under paragraphs 21.4.3 through 21.4.5 (Consumer Protection) includes cooperation with respect to online commercial activities.
This is the only omission that really left me scratching my head (though the omission of USMCA Article 19.13 (Unsolicited Commercial Electronic Communications) is also notable). Some language on consumer protection appears in the EU proposal, with Article 2.3.2 standing out:
2.3 CONSUMER PROTECTION
1. Recognising the importance of enhancing consumer trust in electronic commerce, Members shall adopt and maintain measures that protect consumers from fraudulent and deceptive commercial practices when they engage in electronic commerce transactions.2. Additionally, Members should consider adopting or maintaining measures that:
(a) require traders to act in good faith;
(b) require traders to provide accurate information on the goods or services and the terms of the contract; and
(c) grant consumers access to redress.3. Members recognise the importance of cooperation between their consumer protection agencies or other relevant bodies in order to protect consumers and enhance online consumer trust.
In a way it seems odd that the U.S. would not put forward its own language on this given that the USMCA text seems substantively different than the EU proposal. It will be interesting to see how this develops.
Other USMCA provisions left out include: Article 19.9 (Paperless Trading), Article 19.10 (Principles on Access to and Use of the Internet for Digital Trade), and Article 19.14 (Cooperation). These include best endeavor clauses, though of course, they might come up in the course of plurilateral discussions.
While a detailed examination of all proposals, as they come in, will be useful, just looking at the U.S. proposal helps us to evaluate the consistency of U.S. policy in this area. What it reveals is that USMCA, while substantially borrowing from CPTPP, is a template that we will likely see employed in other negotiations, with minor adjustments here and there to suit the specific context. Therefore, even if USMCA never gets ratified, parts of it may live on in other texts. Given the amount of time and energy that was expended on negotiating the agreement, it is not surprising that this would be the case. With regard to the e-commerce talks, however, we have yet to see how far the U.S. is willing to move from its position, but looking at the omissions in comparison to the USMCA may be a good indicator of how little room there is to move.
