from Net Politics and Digital and Cyberspace Policy Program

The Top Five Cyber Policy Developments of 2015: The Trans-Pacific Partnership

Cyber Net Politics CFR TPP

December 24, 2015

Cyber Net Politics CFR TPP
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Over the next few days, Net Politics will countdown the top five developments in cyber policy of 2015. Each policy event will have its own post, explaining what happened, what it all means, and its impact on cyber policy in 2016. In this post, the WSIS+10 process. 

In October 2015, twelve nations from Asia and the Western hemisphere that account for nearly 40 percent of the world’s gross domestic product concluded negotiations on the Trans-Pacific Partnership Agreement (TPP). Over a decade in the making, the TPP is one of 2015’s most significant policy developments for trade and other areas, including cyberspace. The TPP includes a chapter on electronic commerce, which the U.S. Trade Representative called “the most ambitious trade policy ever designed for the Internet and electronic commerce.” But the TPP’s importance to cyber policy extends beyond its e-commerce provisions.

For the United States and other participating countries, the TPP has strategic significance. With trade liberalization stagnated at the World Trade Organization (WTO), the TPP offers a way to liberalize trade as a source of global economic growth and interdependence. With China’s rising influence, the TPP establishes benchmarks for trade and investment regimes in a time of increasing geopolitical competition. Thus, TPP provisions relevant to cyber policy serve purposes greater than increasing cross-border data flows. Further, the prominence the TPP gives to digital dimensions of trade elevates their importance to the TPP’s strategic goals.

In substantive terms, the TPP’s centerpiece for cyber policy is the groundbreaking chapter on e-commerce, which I examined in an earlier post. But, the agreement has other provisions that underscore the importance of cyber technologies to twenty-first century economic and commercial activities. The TPP:

  • Reduces tariffs on exports of information and communication technology products;
  • Liberalizes trade in software and Internet-provided services;
  • Includes protections addressing intellectual property challenges associated with software, digital technologies, and the Internet; and
  • Covers investments that involve making cyber-oriented products or providing cyber-based services.

The e-commerce chapter and other cyber-relevant provisions fall within the TPP’s rules on dispute settlement between states, meaning case law interpreting them and their relationship with other rules, such as exceptions to obligations, is likely to develop. Further, investors in cyber-centric sectors can use the investor-state dispute settlement mechanism if they believe the host government has violated protections for investments the TPP includes.

As CFR’s Edward Alden has argued, the TPP’s geographic and economic scale and ambitious content give it the potential to catalyze and shape future bilateral, regional, and multilateral agreements, including what such agreements contain concerning e-commerce and provisions on trade in cyber-associated goods, services, and intellectual property protections. Much as the North American Free Trade Agreement (NAFTA) did for the Uruguay Round negotiations that created the WTO and subsequent bilateral and regional agreements, the TPP can influence the direction of future trade and investment regimes. This impact will be most likely in areas, such as e-commerce, where the TPP represents the cutting edge for policy and law.

Even the controversies associated with cyber-relevant TPP provisions highlight the significance of this development now and in the future. Experts have attacked its provisions on e-commerce for potentially threatening privacy, criticized its intellectual property protections for digital technologies, complained that trade and investment liberalization and TPP’s dispute settlement mechanisms will override public interest regulations, and questioned whether certain provisions pose a threat to cybersecurity. In the short term, such controversies will inform whether the governments of the TPP countries approve the agreement. In the near term, these and other critiques will be used to evaluate whether the TPP’s implementation produces outcomes that vindicate the critics or the champions of the agreement.

If accepted by participating countries, the TPP will become an important regime for global cyber governance. The Obama administration has stressed the need for norms of responsible state behavior in cyberspace, but, for various reasons, a number of efforts to promote such norms have encountered difficulties or produced results of questionable importance. By contrast, the administration’s leadership on TPP has helped create norms negotiated by developed and developing countries around the Pacific rim that have the potential to stabilize, strengthen, and sustain global governance for economic cyber activities. In that sense, the TPP connects with the administration’s success in promoting a norm against governments engaging in economic cyber espionage. By being anchored in private-sector trade and investment, TPP-based governance can support efforts to maintain a multistakeholder approach to Internet governance and foster Internet freedom through a global, free, and open Internet.

The TPP’s fate will be determined in 2016 when participating countries decide whether to accept it. In the United States, this decision will take place amidst a presidential campaign in which the TPP has already become a political lightning rod. The Obama administration’s desire for Congress to vote on the pact early in 2016 produced skepticism from the Senate majority leader that a vote would happen before the November elections. Although the TPP has implications for cyber policy, its cyber aspects will not, in all likelihood, be at the forefront of the political fights in the United States the TPP has yet to face.

More on:

Cybersecurity

Politics and Government

Digital Policy

Treaties and Agreements

Trade

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