from Net Politics and Digital and Cyberspace Policy Program

The TTIP Leaks and the Future of Electronic Commerce in International Trade Law

CFR Net Politics Cyber TTIP

May 5, 2016

CFR Net Politics Cyber TTIP
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Greenpeace’s disclosure of negotiating documents concerning the proposed Transatlantic Trade and Investment Partnership (TTIP) agreement between the United States and the European Union (EU) has renewed controversies about TTIP specifically and trade agreements generally. Although the released documents do not cover all issues under negotiation or include the negotiating text on electronic commerce, the leaks highlight factors that spell trouble for the goal of modernizing international trade law for the digital age.

The need to adapt international trade law to support and foster e-commerce has been apparent for some time, and countries began including e-commerce provisions in bilateral and regional trade agreements and working on digital trade issues within the World Trade Organization (WTO). With WTO efforts not making progress, the proposed Trans-Pacific Partnership (TPP) agreement and TTIP offered better opportunities for crafting new international trade law for e-commerce. Indeed, the Obama administration argued TPP’s e-commerce chapter promised to link “some of the world’s most sophisticated Internet economies with rapidly growing developing nations across four continents” through “the most ambitious trade policy ever designed for the Internet and electronic commerce.”

In TTIP negotiations, the United States and the EU have tabled proposals on electronic communications/telecommunications services and e-commerce. Greenpeace posted the consolidated negotiating text for electronic communications/telecommunication services, an important area but distinct from e-commerce. The TTIP leak did not include the consolidated text on e-commerce, so it is not possible to compare what the United States and the EU are discussing with the TPP’s e-commerce provisions. At present, only the EU has made its e-commerce proposals public.

One document Greenpeace released—an EU note on the “Tactical State of Play of the TTIP Negotiations” from March 2016—described the e-commerce talks as covering “all proposals except for the provisions on data flows and computing facilities,” addressing non-discriminatory treatment of digital products (except audio-visual services), and considering EU proposals on e-trust and e-authentication services and on the prohibition of requirements for prior authorization for online services.

The EU note also mentioned negotiations concerning conformity assessment principles for information and communication technology products that use encryption, with the TPP text as the basis of these discussions. On this issue, the EU stressed “the sensitivities of Member States, which are competent in this area and which would not like to see its right to regulate curtailed in a security-related area.” The EU note briefly described ongoing work among the negotiators on other digital trade issues, including e-labeling, e-accessibility, and e-health.

In its criticisms of the disclosed documents, Greenpeace did not address e-commerce issues and emphasized its belief that the EU and U.S. positions in the TTIP negotiations threaten the ability of governments to protect health and the environment from corporate interests. However, unlike the TPP negotiations, the TTIP talks have unfolded in the midst of contentious transatlantic digital relations. The European Court of Justice struck down the U.S.-EU Safe Harbor agreement as incompatible with EU privacy rules in 2015. The United States and the EU then concluded the Privacy Shield agreement in February 2016 in a new attempt to calibrate EU privacy protections with EU-U.S. data flows, but privacy experts from EU member states raised serious concerns about Privacy Shield in April 2016. Actions by EU competition law authorities against U.S. technology companies, such as Google, have also agitated transatlantic digital relations.

These privacy and competition law problems between the EU and the United States do not constitute insurmountable obstacles to progress in TTIP negotiations on e-commerce issues. But, TTIP negotiations, including on competition law issues, will not resolve these problems, which are more significant politically and economically than differences the United States and the EU have over what TTIP’s e-commerce provisions should include.

The TTIP leaks by Greenpeace threaten the contributions TTIP could produce in the area of e-commerce by making TTIP more controversial, especially in Europe, and could undermine the prospects the United States and the EU can complete the agreement before President Obama leaves office. The negotiating texts Greenpeace disclosed suggest the United States and the EU have much work to do on many issues in a period of time that is now worryingly short and saturated with controversies.

In addition, with all leading U.S. presidential candidates railing against trade agreements, congressional approval of TPP and a completed TTIP before the Obama administration ends is increasingly unlikely. No matter who it is, the winner of the presidential election will not enter office with the desire or mandate to pursue TPP, TTIP, or other trade agreements. In this context, leadership on developing international trade law to support and expand e-commerce will not come from the United States. Unfortunately, should this come to pass, the world economy will have bigger problems on its hands than missed opportunities on e-commerce.

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