Unit 7 - Background & Issues

We step outside our march through general multilateral trading principles to cover digital commerce and the internet across borders in the trade law context.  Please recognize three things at the outset, picking up from last week’s discussion.

The first is that when the 1994 WTO Agreement was signed, the broader internet was still in its infancy, and e-commerce was non-existent.  I recall I had a 300 bps dial-up modem on my windows-- 2.0 or 3.0?--  laptop with black and white lcd screen and circa 4 hour battery life in 1994, which also was annoyingly slow for longer e-mails over static prone transpacific copper phone wire, not to mention any digital images.  I still had a mainframe account in Linux to accompany generally brick-sized cellular phones like cutdown walkie-talkies.  Smaller Motorola flip phones with SMS capacity only arrived circa 2000, and the first Apple smartphone dates to 2005.  So the chief intellectual property content of the 1994 WTO Agreement was its subsidiary Trade-Related Intellectual Property Agreement, or TRIPs Agreement, largely specifying minimum IP standards for all WTO members, especially directed against developing countries without modern IP laws, and tying them to trade law enforcement mechanisms.  So the TRIPs Agreement, which we shall cover later in Unit 11,  was about minimum international standards and enforcement of the law of patents, trademarks and copyright, alongside trade secret, industrial design and integrated circuit design law, to stop counterfeiting of software and movies/music on DVDs or CDs (so the business concerns of Seattle and Hollywood, because Silicon Valley was still a novel concept).

The newer areas of law, now appearing in the most recent FTAs, reach questions like internet governance, privacy rights, requirements concerning data storage, etc. (captured in ideas like an “open” internet versus stricter government control, including localized storage of data on servers within a specific jurisdiction).  The trade law terminology in some circles might be “TRIPS plus” law, but it is probably easier to understand it as the legal treatment of the internet in the cross-border setting.  But in a world of “fake news,” social media opinion shaping operations like interference in (foreign) elections alongside e-commerce, the internet in cross border setting touches on national security and privacy concerns, alongside digital commerce.  And digital commerce itself can reach from e-commerce like consumer-facing ebay versus B2B websites for online purchasing, to digital entertainment (e.g., Netflix delivering video content like movies online, or someone streaming NBA games live to your cell phone in a world of 500+ cable or satellite channels, etc., also bringing up cultural goods concerns), and now influencers hawking products via social media.  So now the digital economy is growing by leaps and bounds, so that attention has shifted to a certain degree from TRIPS issues as such to (open) internet issues more generally, including cloud services.  And such new provisions are being incorporated in regional FTAs currently, so that the focus is on newer FTAs like TPP-11 and NAFTA Version 2.0 or USMCA.  But look closely at such trade law documents and tell me where you see the coming 5G and the internet of things complications being dealt with, not to mention autonomous vehicles and artificial intelligence, apparently just around the corner in cross-border service industry liberalization terms?

Second, much of this kind of generic “technology law” is unsettled even as a matter of domestic law, so that we may be conscious of differing domestic law opinions but will just have to look past some of those arguments in a practical sense because they are often under discussion in most jurisdictions still.

Third, on the trade law side there is a bit of a race involved under the differing super-regional FTA negotiations (TPP versus RCEP), because differing countries want to influence the development of international internet and e-commerce standards.  And it is not just an argument about the “Great (Fire)Wall of China, since European views about data protection and privacy may be equally restrictive in the cross-border context, albeit for different reasons.  An underlying problem is the idea that under traditional public international law views, with limited exceptions, extraterritorial regulation was prohibited (but where is cyberspace located, once you start regulating and/or tax online activities?).