WTO, E-commerce and Information Technologies From the Uruguay Round through the Doha Development Agenda A Report to the UN ICT Task Force
BY Sacha Wunsch-Vincent
Edited by Joanna Mclntosh
United Nations
Copyright 0 2005 United Nations ICT Task Force All rights reserved. Except for use in a review, the reproduction or utilization of this work or part of it in any form or by electronics, or other means now known or hereafter invented, including xerography, photocopying, recording, and in any information storage, transmission or retrieval system, including CD-ROM, online or via the Internet, is forbidden without the written permission of the publishers. The views expressed in this book are those of their individual authors and do not necessarily reflect the views or positions of the United Nations ICT Task Force, the United Nations itself, any of its organs or agencies, nor of any other organizations or institutions mentioned or discussed in this book, including the organizations to which the authors are affiliated. Published by The United Nations Information and Communication Technologies Task Force One United Nations Plaza New York, NY 10017
[email protected] About the Author Sacha ~unsch- inc cent* is Economist at the Informations and Communications Policy Division of the OECD (Paris) and Visiting Fellow at the Institute for International Economics (Washmgton D.C.). Previously Sacha was Swiss National Science Fellow and visiting fellow of the Berkeley Centre for Law & Technology (University of California). He holds a Masters of International Economics (University of Maastricht) and completed a PhD on the "The WTO, the Internet and Digital Products: EC-US Perspectives" (University of St. Gallen, Oxford: Hart Publishmg, www.hartpub.co.uk).
About the Editor Joanna McIntosh*, at the time of writing, is General Counsel of the G8 Summit Planning Organization, whch prepared for the 2004 G8 Summit in Sea Island, Georga. Previously, Joanna was at the Markle Foundation as Managng Director of one of the foundation's major program areas. Joanna has spent fifteen years workmg at the intersection of trade and technology policy issues. As a lawyer at the Office of the United States Trade Representative during the 1990s, she worked extensively on the Uruguay Round negotiations, enforcement of WTO Agreements, and the Geneva Mmisterial Declaration on e-commerce that helped to launch the WTO's work in t h s important area.
* This book - including the selection of topics, the treatment of issues, and the expression of opinion - reflects the independent views of the author and the editor and should not be attributed to their employers 1 the institutions they work for.
The Markle Foundation Emerging information and communication technologes possess enormous potential to improve people's lives. The Markle Foundation works to realize h s potential and to accelerate the use of these technologes to address critical public needs in the areas of health care and national security.
The United Nations ICT Task Force The United Nations Information and Communication Technologes (ICT) Task Force was formally launched on 20 November 2001 by Secretary General Kofi Annan, with the mandate of promoting awareness, inclusive policies and innovative technologcal and business models, whde also budding public-private-cid society partnershps that would contribute to the realization of development goals through the application of ICT. Whde not being an operational, implementing or fundmg agency, the Task Force serves as a catalyst with a fachtating and advisory role designed to promote synergy and better coordination, partnerships and initiatives, and a focal point for establishing strategc drection, policy coherence and advocacy for the common goal of a global ICT-based development agenda. T o avoid duplicating other efforts, the Task Force has been collaborating closely with other global initiatives. To fully implement its objectives the Task Force has created Working Groups to address specific themes within the ICT-forDevelopment agenda and Regonal Nodes to tackle the needs of hfferent areas of the world. The unique key to the Task Force is its truly global platform for placing ICT at the service of all the world's citizens.
TABLE OF CONTENTS Foreword Executive Summary PART ONE I. Introduction 11. The WTOysWork on E-commerce and IT Trade A. History of the WTO Work Programme on Electronic Commerce 1. Phase I: Geneva Ministerial Conference - Seattle Ministerial Conference 2. Phase 11: Seattle Ministerial Conference - Doha Ministerial Conference 3. Phase 111: Doha Ministerial Conference - Cancun Ministerial Conference 4. Phase IV: Cancun Ministerial Conference 5. Work Programme Participation and Accomplishments B. Doha Development Agenda 111. Developing Country Interests in E-Commerce and IT Trade A. Overview of the CTDysWork on E-commerce B. Barriers to E-commerce for Developing Countries 1. Physical Infrastructure 2. Human and Legal Infrastructure 3. Other Barriers 4. Expandmg Export Opportunities for Developing Countries C. Special and Differential Treatment for Developing Countries 1. Background on S&D Treatment 2. S&D Provisions Relevant to E-commerce in the WTO Agreements and the Doha Declaration
D. Conclusion PART TWO IV. Information Technology Goods - Basket I A. Information Technology Agreement 1. History of the ITA 2. Enlargmg ITA Participation 3. Expandng ITA Coverage 4. Eliminating Non-Tariff Measures 5, Resolving Classification Divergences B. Doha Negotiations 1. Modalities 2. E h a t i n g Tariff Barriers 3. Eliminating Non-Tariff Barriers 4. S&D Provisions C. Conclusion
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PART THREE V. Services A. Introduction to GATS 1. Scope of the Agreement 2. Structure of the Agreement 3. General Obligations and Disciplines 4. Specific Commitments B. Services Negotiations Unfinished Business/Budt-In Agenda Negotiations Guidelines and Procedures Status of the Services Negotiations Initial Request-Offer Process Developing Country Participation in the Services Negotiations E-commerce in the Services Negotiations C. Addressing Questions from the WTO Work Programme on Ecommerce in the Services Negotiations 1. Applicabhty of Specific Commitments to Electronically Delivered Services 2. Classification of Electronically Delivered Services as Mode 1 or Mode 2 3. hkeness 4. Increasing the Participation of Developing Countries in Ecommerce/World Services Trade 5. Regulations Affecting E-commerce 6. Customs Duties 7. New Services D. Conclusion VI. Internet Infrastructure Services - Basket I1 A. Telecommunication Services 1. Scheduhng Telecommunications Services 2. Uruguay Round Negotiations and Telecommunications Services 3. Doha Development Agenda and Telecommunications Services a. Improving Specific Commitments b. Clarifpg the Scope and Coverage of Telecommunications Services Commitments c. Developing Disciplines on the Regulation of Telecommunications Services d. Development-Related Negotiations Issues B. Conclusion C. Computer and Related Services 1. Uruguay Round Negotiations on Computer and Related Services
62 63 64 67 69 71
2. The Doha Development Agenda and Computer and Related Services a. Improving Specific Commitments b. Classification of Computer and Related Services c. Development-Related Issues D. Conclusion VII. Electronically Traded Services - Basket I11 A. Negotiations on Electronically Traded Services B. Business Process Outsourcing (BPO) Services 1. Understandmg B P 0 Services 2. The B P 0 Phenomenon 3. Scheduling B P 0 Services Commitments C. Conclusion PART FOUR VIII. Digtal Products - Basket IV A. Introduction B. Market Access for Digital Products 1. Duty-Free Moratorium on Electronic Transmissions 2. Limiting Tariffs on Digtal Products 3. Classifying Digtal Products: Goods or Services? 4. Doha Negotiations C. Intellectual Property Right Protection for Digital Products 1. The TRIPS Agreement 2. WTO Work Programme on Electronic Commerce 3. The Copyright Challenge For Digital Products 4. The Doha Negotiations D. Conclusion Concluding Remarks Bibliography By Subject Matter In Alphabetical Order
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List of Tables E-commerce Work Promamme Res~onsibllities Cross-Sectoral Issues Work Programme Accomplishments Applymg the Doha Mandate for E-commerce and IT Negotiations Doha Development Agenda S&D Provisions in WTO Ameements and the Doha Declaration ITA Participants NTMs on IT Products Tariff Reduction Modalities Service Sectors/Sub-sectors Modes of Supply Sample GATS Schedule for Computer Services Status of Services Negotiations Examples of Services Negotiations Submissions Discussing E-commerce Examples of Services-related Barriers to E-commerce Questions Concerning the Application of the GATS to E-commerce Current and Future D i s c b h e s on Domestic Redations Classification of Telecommunications Services GATS ine ex Telecommunications Reference Paper on Basic Telecommunications Commitments for Selected Telecommunications Services Comparison of W/120 and Central Product Classification Lists W / 120 Classification of Computer and Related Services Commitments for Computer and Related Services EC Proposal for An "Understan&ng" on the Scope of CPC 84 Taiwan's Proposal for a "Value Chain" Mode 1 Commitments on Selected Electronically Traded Services Distribution of Commitments on Selected Electronicallv Traded Services Full Market Access Commitments on Selected Electronically Traded Services Information Technology and Business Process Oytsourcing Services Regional Distribution of Other Business Services Exports Average Growth Rate of Exports of Other Business Services Model Schedule for Selected IT and B P 0 Services Selected Sectors and Sub-sectors Relevant to B P 0 (CPC 87) Decision on Valuation of Carrier Media Bearing Software for Data Processing Equipment. Levying Duties/Customs Valuation in Offline and Online Transactions Comparison of GATT and GATS Agreements TRIPS Art. 71: Review and Amendment Status of Accession for WIPO Internet Treaties c>
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List of Acronyms
Acronym
Definition
CTD
Committee on Trade and Development
EC
European Communities
EMC
Electromagnetic Compatibility
EM1
Electromagnetic Interference
GATS
General Agreement on Trade in Services
GATT
General Agreement on Tariffs and Trade
IT or ICT
Information and Communications Technology
ITA
Information Technology Agreement
ITC
International Trade Center
ITU
International Telecommunications Union
LDC
Least-Developed Country
MFN
Most Favored Nation
NAMA
Non-agricultural Market Access Negotiations
NGMA
Negotiating Group on Market Access
NTB
Non-Tariff Barrier
NTM
Non-Tariff Measure
OECD
Organization of Economic Co-operation and Development
S&D
Special and Differential (as in, treatment or provisions)
SME
Small-and-Medium-sized Enterprise
TNC
Trade Negotiations Committee
TRIPS
Trade Related Aspects of Intellectual Property fights
UNCTAD
United Nations Council on Trade and Development
WC0
World Customs Organization
WPO
World Intellectual Property Organization
WTO
World Trade Organization
Foreword I vii
FOREWORD T h s book is an overview of one of the most important processes today determining the governance of information technology (IT): the growing role of the World Trade Organization (WTO), based in Geneva. Although its role is often overlooked, the WTO has in recent years emerged as a key player in IT governance, primarily through the application of the rules-based tradmg system to e-commerce. T h s role can be traced at least back to 1995, and has continued through the most recent (and difficult) Doha round of negotiations. The Markle Foundation has been workmg on issues of Internet governance, with special emphasis on developing nations, for some time now. Recently, it has had the privilege of serving as a Member of the United Nations Information and Communication Technology Task Force and as chairman of its Working Group I, which focuses on IT governance and policy. The purpose in commissioning h s book is to offer a detded and comprehensive picture of how WTO relates to one of the most crucial (yet often least understood) areas of IT governance. T h s task is important for several reasons. First, the narrative presented here is important because the WTO's role is often overlooked, lost in the sea of bodes and institutions that are more explicitly involved in IT governance (e.g., ICANN). As t h s book shows, however, the WTO is in fact deeply involved in IT governance and policy. To be sure, the WTO does not
