Abstract
This chapter explores the far-reaching effects of the digital transformation on trade and trade law. It first sketches the state of affairs under the multilateral forum of the World Trade Organization (WTO) and, second, analyzes the more deliberate regulatory responses to the challenges of digitization formulated in free trade agreements (FTAs). The focus here is placed on distinct advanced models of digital trade regulation, such as the Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP), as well as on particular forms of legal innovation, such as the new generation of Digital Economy Agreements. By looking at specific agreements, the chapter also demarcates the positioning of key stakeholders, in particular the US, the EU, and China, and contributes to the understanding of the dynamic and contentious landscape of global trade law, as reshaped by digital transformation in recent years. This chapter finally asks whether the emergent regulatory environment is adequate to match the data-driven economy and whether certain pitfalls of international cooperation and path dependencies hinder this.
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Notes
- 1.
- 2.
Cottier (2017), p. 1017.
- 3.
Manyika et al. (2016).
- 4.
Admittedly the report was published before the Covid-19 pandemic; the effects of online commerce has only been enhanced during the pandemic times. See e.g. WTO (2020).
- 5.
Manyika et al. (2016), p. 73 and Chap. 4.
- 6.
Manyika et al. (2016), p. 7.
- 7.
See e.g. Shapiro and Varian (1999).
- 8.
- 9.
- 10.
- 11.
UNCTAD (2021). Notably, worldwide exports of digitally deliverable services fell by only 1.8%, while total services exports declined by 20% (an unprecedented drop since records began in 1990) (ibid.).
- 12.
- 13.
We have seen regulatory reforms unfold due to convergence effects—the European Union, for instance, has adopted twice such reform packages and is now in the process of undergoing a third reform as part of its Digital Single Market Strategy. See European Commission (2015).
- 14.
- 15.
- 16.
The Economist (2017).
- 17.
- 18.
Manyika et al. (2011).
- 19.
- 20.
See e.g. Manyika et al. (2011).
- 21.
- 22.
Irion and Williams (2019).
- 23.
- 24.
- 25.
Localization measures can be defined as measures that compel companies to conduct certain digital trade-related activities within a country’s borders. They may include policies that require data servers to be located within the country; that require local content; government procurement preferences and technology standards that favour local digital companies. See e.g. OECD (2015).
- 26.
WTO (1998).
- 27.
- 28.
For a fully-fledged analysis, see Burri and Cottier (2012).
- 29.
See e.g. Sacerdoti et al. (2006).
- 30.
Major GATS cases have had a substantial Internet-related element. See Panel Report, United States—Measures Affecting the Cross-Border Supply of Gambling and Betting Services (US—Gambling), WT/DS285/R, adopted 10 November 2004; Appellate Body Report, US—Gambling, WT/DS285/AB/R, adopted 7 April 2005; Panel Report, China—Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (China—Publications and Audiovisual Products), WT/DS363/R, adopted 12 August 2009; Appellate Body Report, China—Publications and Audiovisual Products, WT/DS363/AB/R, adopted 21 December 2009; Panel Report, China—Certain Measures Affecting Electronic Payment Services (China—Electronic Payment Services), WT/DS413/R, adopted 31 August 2012.
- 31.
See e.g. Fleuter (2016).
- 32.
- 33.
Wunsch-Vincent and Hold (2012).
- 34.
WTO (2019b).
- 35.
- 36.
- 37.
This analysis is based on a dataset of all data-relevant norms in trade agreements (TAPED). See Burri and Polanco (2020) and https://unilu.ch/taped (last access 05 August 2022).
- 38.
- 39.
- 40.
See e.g. Elsig and Klotz (2021).
- 41.
For analysis of all relevant chapters, see Burri (2017).
- 42.
Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
- 43.
Article 14.2(2) CPTPP. Excluded for the scope are (a) government procurement and (b) information held or processed by or on behalf of a Party, or measures related to such information, including measures related to its collection. Article 14.2(3) and (4) CPTPP.
- 44.
Article 14.5(2) CPTPP.
- 45.
Articles 14.9 and 14.6 CPTPP respectively.
- 46.
Article 14.13(2) CPTPP.
- 47.
Article 14.11(2) CPTPP.
- 48.
Article 14.11(3) CPTPP.
- 49.
See e.g. Andersen (2015).
- 50.
See e.g. Greenleaf (2017).
- 51.
Article 14.17 CPTPP.
- 52.
Article 14.14 CPTPP.
- 53.
Article 14.10 CPTPP.
- 54.
Article 14.16 CPTPP.
- 55.
Article 14.8(2) CPTPP.
- 56.
Article 14.8(2) CPTPP. A footnote (6) provides some clarification in saying that: “… a Party may comply with the obligation in this paragraph 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”.
- 57.
Article 14.8(5) CPTPP.
- 58.
Article 19.2 USMCA.
- 59.
Article 19.3 USMCA.
- 60.
Article 19.4 USMCA.
- 61.
Article 19.5 USMCA.
- 62.
Article 19.6 USMCA.
- 63.
Article 19.9 USMCA.
- 64.
Article 19.12 USMCA.
- 65.
Article 19.11 USMCA.
- 66.
Article 19.11(2) USMCA. A footnote attached clarifies: “A measure does not meet the conditions of this paragraph if it accords different treatment to data transfers solely on the basis that they are cross-border in a manner that modifies the conditions of competition to the detriment of service suppliers of another Party”. The footnote does not appear in the CPTPP.
- 67.
Article 19.8(2) requires from the parties to “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)”.
- 68.
Article 19.8(3) USMCA.
- 69.
Article19.8(4) and (5) USMCA.
- 70.
Article 19.1 USMCA.
- 71.
Article 19.17(2) USMCA. Annex 19-A creates specific rules with the regard to the application of Article 19.17 for Mexico, in essence postponing its implementation for three years.
- 72.
See e.g. Burri (2022).
- 73.
Article 19.18 USMCA.
- 74.
Article 7: Customs Duties; Article 8: Non-Discriminatory Treatment of Digital Products; Article 9: Domestic Electronic Transactions Framework; Article 10: Electronic Authentication and Electronic Signatures; Article 14: Online Consumer Protection; Article 11: Cross-Border Transfer of Information; Article 12: Location of Computing Facilities; Article 16: Unsolicited Commercial Electronic Messages; Article 19: Cybersecurity US–Japan DTA.
- 75.
Article 20 US–Japan DTA.
- 76.
Article 17 US–Japan DTA.
- 77.
Article 18 US–Japan DTA.
- 78.
See e.g. the 2016 Chile–Uruguay FTA; the 2016 Updated Singapore-–Australia Free Trade Agreement, the 2017 Argentina–Chile FTA, the 2018 Singapore–Sri Lanka FTA, the 2018 Australia–Peru FTA, the 2018 Brazil–Chile FTA and the 2019 Australia–Indonesia FTA.
- 79.
See e.g. Articles 102 and 37 EU–Chile FTA.
- 80.
Article 7.48 EU–South Korea FTA.
- 81.
Article 16.3 CETA.
- 82.
Article 16.5 CETA.
- 83.
Article 16.4 CETA.
- 84.
Article 8.81 EU-Japan EPA.
- 85.
See European Commission (2018).
- 86.
Regulation 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), OJ 2016 L 119/1 [hereinafter GDPR].
- 87.
WTO (2019a).
- 88.
See e.g. Article 6(1) draft EU–Australia FTA (emphasis added). The same wording is found in the draft EU–New Zealand and the EU–Tunisia FTAs.
- 89.
See e.g. Article 6(2) draft EU–Australia FTA. The same wording is found in the draft EU–New Zealand and the EU–Tunisia FTAs.
- 90.
See e.g. Article 5(2) draft EU–Australia FTA. The same wording is found in the draft EU–New Zealand and the EU–Tunisia FTAs.
- 91.
See e.g. Article 2 draft EU–Australia FTA. The same wording is found in the draft EU–New Zealand and the EU–Tunisia FTAs.
- 92.
Yakovleva (2020), p. 496.
- 93.
Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, OJ L [2021] 149/10. See also Irion and Burri (2022).
- 94.
For details, see People’s Republic of China, Ministry of Commerce: http://fta.mofcom.gov.cn/english/fta_qianshu.shtml (last access 05 August 2022).
- 95.
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
- 96.
Leblond (2020).
- 97.
Prior to the RCEP, of all of Chinaʼs 22 FTAs, 12 of them have e-commerce chapters or provisions. These are China–Cambodia FTA, China–Mauritius FTA, China–Georgia FTA, China–Australia FTA, China–Korea FTA, China–New Zealand Upgraded FTA, China–Chile Upgraded FTA, China–Singapore Upgraded FTA, China–ASEAN Upgraded FTA, China–Hong Kong Agreement on Economic and Technical Cooperation, China–Macao Agreement on Economic and Technical Cooperation and China–Taiwan Economic Cooperation Framework Agreement. Although the China–US Phase I Agreement does not have an e-commerce chapter, it contains provisions on Piracy and Counterfeiting on E-Commerce Platforms in Section E of Chap. 1: Intellectual Property. In this section, the parties seek to combat online infringement of IP, including infringement on major e-commerce platforms.
- 98.
Article 12.14 RCEP.
- 99.
Article 12.15 RCEP.
- 100.
Emphasis added.
- 101.
Emphasis added. The “essential security interest” language has been endorsed by China also in the framework of the WTO electronic commerce negotiations.
- 102.
Article 16.2 DEPA.
- 103.
After Module 1, specifying general definitions and initial provisions, Module 2 focuses on “Business and Trade Facilitation”; Module 3 covers “Treatment of Digital Products and Related Issues”; Module 4 “Data Issues”; Module 5 “Wider Trust Environment”; Module 6 “Business and Consumer Trust”; Module 7 “Digital Identities”; Module 8 “Emerging Trends and Technologies”; Module 9 “Innovation and the Digital Economy”; Module 10 “Small and Medium Enterprises Cooperation”; and Module 11 “Digital Inclusion”. The rest of the modules deal with the operationalization and implementation of the DEPA and cover common institutions (Module 12); exceptions (Module 13); transparency (Module 14); dispute settlement (Module 15); and some final provisions with regard to amendments, entry into force, accession and withdrawal (Module 16).
- 104.
Article 9.4 DEPA.
- 105.
Article 3.4 DEPA. The article also provides detailed definitions of cryptography, encryption, and cryptographic algorithm and cipher.
- 106.
Article 2.2: Paperless Trading; art 2.3: Domestic Electronic Transactions Framework.
- 107.
Article 2.2(5) DEPA. “Single window” is defined as a facility that allows Parties involved in a trade transaction to electronically lodge data and documents with a single-entry point to fulfil all import, export and transit regulatory requirements (Article 2.1 DEPA).
- 108.
Article 8.2(2) and (3) DEPA.
- 109.
Articles 8.3 and 8.4 DEPA.
- 110.
Article 9.2 DEPA.
- 111.
Article 11.2 DEPA.
- 112.
See e.g. Burri (2021b).
- 113.
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Burri, M. (2023). Digital Transformation as a Reshaper of Global Trade Law. In: Mathis, K., Tor, A. (eds) Law and Economics of the Digital Transformation. ILEC 2023. Economic Analysis of Law in European Legal Scholarship, vol 15. Springer, Cham. https://doi.org/10.1007/978-3-031-25059-0_13
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