15 SEPTEMBER 10
"INTERNATIONAL TRADE AND INTERNET GOVERNANCE"
Note: The following is the output of the real-time captioning taken during Fifth Meeting of the IGF, in Vilnius. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the session, but should not be treated as an authoritative record.
>> SEBASTIEN BACHOLLET: First of all, I would like to apologize, Siva who set up this workshop is not able to be with us in person today. I hope she will join us through WebEx as soon as we will be able to start the process of having WebEx and all of the sessions on the screen. Siva asked me to take that role which is impossible because I'm fellow member of the India chapter in Chennai and I'm from France not from India sorry. I was asked that two days ago. We have a good speaker. I'm sure it's somewhat more important than the guy helping with the meeting. And we will have a formal presentation as soon as Olivier will be able to run the WebEx system.
>> SEBASTIEN BACHOLLET: Okay. It will take one or two more minutes for technical reasons. Why don't I suggest that if you agree that you present yourself and what you do and I hope that it will be ready to start your presentation as soon as we will do that, if you agree. May you start, please?
>> SHEBA MOHAMMID: Hi. I'm Sheba Mohammid. I'm from Trinidad and Tobago. That's a small island right in the Caribbean Sea. I work for the Government. There I'm an ICT Policy Specialist. And I'm here with the African Caribbean Government and so I'll be talking about Small Island Developing States lands today. Looking at MSMEs to look to what could be done to what could help enable them using international trade using ICT.
>> LEE TUTHILL: Hi I'm Lee Tuthill. I work with the World Trade Organization on the General Agreement on Trade in Services, the GATS. I've been working there a long time on telecommunications and communication services but more recently on what's been called IT-enabled services. And that's a very interesting development in itself. So we'll talk about that today.
>> ALAN DAVIDSON: Good morning, my name is Alan Davidson I'm Director of public policy at Google in Washington D.C. where I head up our public policy work in north and South America.
Before joining Google, I was civil liberties lawyer at the centre for democracy and technology for a number of years -- democracy and technology for a number of years I used to be an engineer but to my mother's great sadness, I'm now an attorney.
>> DIMITRI YPSILANTI: Good morning. I'm Dimitri Ypsilanti. I'm with the Organisation for Economic Co-Operation and Development. I'm responsible for two committees at the OECD one the Consumer Policy Committee which looks at issues of consumer protection and the other is the ICCP information communications -- sorry information computer and information communications policy which look after issues like tell col, security, privacy, the information economy, Internet issues.
>> OLIVIER MJ CREPIN-LEBLOND: Good morning. I'm Olivier MJ Crepin-Leblond. I'm an ISOC ambassador. And I'll be speaking on behalf of the people who are not here in Vilnius but who are everywhere else around the world and who are watching this through the audiovisual system we have here and bringing feedback on WebEx. So hopefully we have a very good session. Looking forward to it. Thank you.
>> SEBASTIEN BACHOLLET: Okay. We are having some technical trouble.
>> OLIVIER MJ CREPIN-LEBLOND: I don't know if the person on remote presenter status at the moment is hearing us but I need to have the ability to put presentations on at the moment. And I don't have it. So we're waiting for it.
>> SHEBA MOHAMMID: Hi. I'm Sheba again from Trinidad. We'll start small today. We have a really diverse panel so I think we're going to get a lot of different perspectives. And pretty much we're here for dialogue. So it has to be interactive. I'm not going to expertly present anything. I'll just present a story of a small developing island state, Trinidad and Tobago, and see what reflections it gives us on Small Island States everywhere and what's happening in international trade and development and how this can be an enabler of development. So I'll just help Olivier out because he's doing a lot and just say: Slide.
So in the context of globalization a lot of big things are happening in the world a lot of really big impressive things are happening with transnational companies and tab go is no exception we are an oil economy everyone thinks we have a lot of money and we're not enabled for funding sometimes. But the idea is if -- there are a lot of transnational companies there and we want to look at how that kind of benefits everyone so does it really trickle down at citizens and when we look a little bit closer at the economy a lot of both economic employment and kind of the cultural relevance comes from micro, small and medium-sized enterprises, MSMEs and we wonder are they being marginalized and enabled and what is the landscape of international trade it's a context now where tab go and a lot of the Pacific and Caribbean states people are buying a lot more online and there's more an American streamlining of goods coming in and it's fantastic for consumers and they are being given more choice and we're wondering how can ICT benefit small and medium-size enterprises.
And kind of one of the answers that we're getting is that we really have to start using it as a lever and if we're going to participate in the international economy you have to use those tools and one of the initiatives that the Government piloted was enterprise matter and that's a B2B marketplace and it's meant to be Trinidad and Tobago online all the time a home for MSMEs and creating an online space something that's concrete and people can go on to and now the project is in review and they are deciding the way forward but these are some of the steps that are happening so how can we get MSMEs online and if they are very small single entrepreneurs how can you canvas them together so their companies can be showcased for international markets.
And more recently we've had the business development company of Trinidad and Tobago has developed a trade portal and what it does is allows B2C commerce by having enterprises kind of catalog their services so it really is trying to use the tools that are out there to empower businesses to put their voices out there, let them be heard. To put their products out there and allow some kind of development.
And some kind of coalescing and maybe it funnels it to create more power and people can go on and say this is the Caribbean or this is where we can access goods.
And more recently we've had a single -- launched a single electronic window facility in Trinidad and Tobago and what this does simply is it's just a single point where information, forms are all that's needed for small and medium-sized enterprises to kind of participate in trade internationally import, exports all of the messy logistics of it all that can be really daunting for a really small business they can get on there and they can have access and it's this lever that allows them to use ICT as a tool to kind of effectively get their businesses out there and participate in markets where they may otherwise kind of be marginalized or may not even think of participating.
And one of the really exciting things that's been happening in Trinidad and Tobago I don't know if anyone has been there but our major kind of highlight of the year is Carnival and that's -- exactly. I think someone has been there. And so pretty much it was a festival that we have in February normally. And it's this big street parade like any other carnival but it's got it's own idiosyncracies and it draws -- one of the things that ICT has been enabling us to do which is kind of unprecedented in a merchandise trade that's happened in the past when we participated traditionally in the sugar economy and that type of thing is now we have the capacity to really culture and make it more tangible and participate in trade in a whole new way and it's this paradigm shift where selling Trinidad and Tobago doesn't become just kind of a commodity of it but how do we get messages out there and small businesses have really started adopting this, adopting a medium and using it as both cultural expression but kind of a lever to get into the market and participate and connect with both the international markets out there and Carnival is kind of a fantastic example of how that's being adopted in Trinidad and Tobago to create greater traffic, greater interest, more tourists coming in and it's been experienced by a lot of Latin America kind of countries where you're selling identity in this way and trade becomes something that we think about very differently than we may have in the past, you know?
And one of the kind of new and burgeoning areas that we're looking at and that's kind of a great lever for Small Island Developing States is this concept of open innovation so it's crowd sourcing. And we have all these just new Web sites out there, these new companies. That may traditionally have had a closed innovation cycle. Their research and development was centred within their company. There were these fixed experts and now with the knowledge economy, everything is changing. It's turning upside down. And they are looking outside. They are putting it out there. They are asking for ideas. And Jasper kind of started conceptualizing innovation by seeing this market funnel that kind of traditionally went one way and within a company and very internal focused and now you have the capacity for contributions to come from elsewhere.
And this can happen within a state. But it can also happen globally. So it kind of is an opportunity for Trinidad and Tobago and other developing countries to participate in a knowledge economy and there starts to be this really fascinating thing with international trade on ICT and development becomes a trade in ideas.
And InnoCentive is one of these. CrowdFlower is another. They look into the -- target into the developing world specifically. And here -- and InnoCentive large companies transnational company where there may have been a hierarchal divide before or a perception of such it kind of deconstructs the whole thing and you have a problem and it's really a simple equation you have a problem put it up need a solution and instead of keeping it within your company you put out there and out there with ICT means everywhere now and it gives Trinidad and Tobago the ability to kind of sell their ideas, to trade in their ideas. And I mean there are these burgeoning issues and it's really exciting but how about international property how does that factor in trade when you're doing things like trading ideas how is that governed what are the policy implications of that.
The whole new kind of issues coming up in the landscape of trade. We're hoping we can have a discussion about that today. So this is from Trinidad and Tobago's perspective but how do people elsewhere see it. So these are some of the kind of initiatives that are happening in Trinidad and Tobago and other Small Island Developing States some of the likely barriers the usual suspects are kind of there so access and connectivity issues. How is that broached. There's usage and uptake so even know with a greater infusion of ICT and greater access, what even motivates small businesses to think they can participate in international trade. Because it seems rather daunting in the first place, you know.
Do they have the skills? Is there a need for capacity building?
These are some of the issues that are ranging up.
And then there's the policy landscape and I come from a policy context. But in Trinidad and Tobago we have electronic transactions bill data protection bill and a consumer protection white paper that's floating around but we are still lagging behind and these are kind of cross jurisdictional use and how do we harmonize internationally this use of trade and create an environment of trust for consumers and producers. And these are some of the issues that are kind of banding about right now. And we hope -- I mean Google is here. We have a whole range of speakers. We're going to kind of throw these out there.
So this is just starting small. This is one country. And what we're trying to do. Whether we will be successful or not kind of depends on all of us. And I'll pass it onto other speakers and we'll have a great discussion today. So thanks so much.
>> OLIVIER MJ CREPIN-LEBLOND: I think it's up to Sebastien to follow up. I was going to ask if there are any questions for those. Thank you very much. Anyone that wishes to start on the questions remotely at the moment I don't see any.
Excuse me; when you ask questions please state your name, your affiliation and also what country you're from.
>> KARLENE FRANCIS: Good morning, everyone. My name is Karlene Francis. I'm from the Organisation of Eastern Caribbean States. I live in Saint Lucia. But of course I'm Jamaica.
>> SHEBA MOHAMMID: Globalization, right.
>> KARLENE FRANCIS: Right. All right. I shared the perspective that was just said by the panelist in terms of MSMEs making up 30 to 40% of the Private Sector in Small Island Developing States. However, the issue in terms of international trade has to do I think primarily with the legal framework.
There are many, many projects in the Caribbean where we're working on harmonized legislation, eTransaction, cybercrime data protection, data protection -- eTransaction, cybercrime, data protection, access to information. And interception of information.
So the ITU CTU project and the project that I worked on VerCom that's funded by the information for integration project and what we're finding is the legal framework has to be in place in order for us to effectively participate in international trade. And that is where the primary focus is on now. And it trans sends into intellectual property rights and all of the other trade legislation. So it would be good to find out when the other speakers speak, as well what has been their experience with regards to the transitioning for the legal framework. And how is it we can participate as developing states since we are at a different stage in terms of our legal framework. Thank you.
>> SHEBA MOHAMMID: I think that's a fantastic point and it kind of gives one of the lenses that the legal issue really is important in terms of building trust and in the Caribbean we have hipca going on through the ITU we have harmonization projects and I think with the Caribbean working together there's another avenue Small Island Developing States kind of coalescing to harmonize and form a greater power and I think it would be great to hear from some of the other participants because one of the things as the developing world we are looking towards best practices and Trinidad and Tobago signed MOUs with other governments more recently with Singapore I believe and other MSME exchange is kind of being modeled under TradeNet we are looking at some of the legalist use. The context is very different and historically we may not have some of the frameworks that other countries kind of take for granted and these are some of the issues we need to streamline and it would be great to hear from everyone on these.
Thanks so much.
>> OLIVIER MJ CREPIN-LEBLOND: Technology isn't with us today.
>> GORDON CAMPBELL: Thank you. I'm Gordon Campbell and I'm Canada's Director of eBusiness development. And actually one of my preoccupations even though Canada is a G8 member is the SMEs in Canada. SMEs may make up 80 to 90% of Canada's business but it seems we're actually facing a number of the similar challenges that small developing island states and other states are, which is particularly motivating SMEs to participate in the online economy.
We found over the last decade the purchasing by SMEs online has risen significantly but the selling by SMEs online has almost not moved at all it's maybe a couple percent up and we have again many, many remote areas in Canada, disparity businesses and so for so while certainly business models may be different between Trinidad and Tobago and other Small Island Developing States and Canada I'm similar to your thoughts as to what you thought may motivate SMEs because we have tried different information programmes, partnership programmes with some success from time to time but as you know there are just so many businesses and so many people to talk to. And I think it does remain as you put your finger on fundamentally a question of motivating and what would encourage small businesses who have so many other things to worry about meaning staying in business day to day, hiring new employees, balancing their books to go out and participate in programmes like you're doing so I'm just interested in that.
>> SHEBA MOHAMMID: Sure. Thanks so much. And it's great to see there are similar issues being faced internationally. I think one of the main things has been -- although this is kind of an economic frontier, it's really a change in culture and how do you change behavior. And some of it really is just kind of changing every day morals that happen in society and for Trinidad and Tobago one of the initiatives we have been pushing is having governments start being a model user of ICT so with Government having eServices online trying to create a precedent of use, create a more dynamic use of ICT, it a model and starts stirring things up that this is a different way of doing business and I work for Government the most antiquated machinery can start to get on board. Then it creates -- it starts to create a different culture, it starts to create that change and another way I think we have been doing it is through public-private partnerships so we need to kind of stop working in silos and kind of us and them and get people to do things and start realising we are all kind of facing these challenges and how do we work together and really leveraging on success and showcasing that success.
We have some bigger businesses in Trinidad and Tobago how do they mentor and partner with smaller enterprises and get them on board. How do they transfer that knowledge. How does that happen within a country but how does it happen internationally are there opportunities for kind of matching small businesses with larger ones. Are there opportunities for greater dialogue online where if SMEs do go on and they have questions or there's a level of uncertainty, how is that broached? And these are some of the kind of ways that we have been kind of trying to streamline or increase -- create some incentive. I know that other countries have used tax incentives. There are different kind of economic ways to do it. But really I think in Trinidad and Tobago at least it's been a change in culture and seeing things a bit differently and kind of helping people navigate their way around a new space as you would a new frontier and how do you do that gradually and showcase a success that's out there and create a pull factor I think that's how we've been trying to do it in Trinidad some of the online spaces we've created kind of we hope will draw people in or create a level of comfort.
Like she said the legal area really is something that we're grappling with right now but kind of getting SMEs on board and getting them to speak to each other so we have the business development company Trinidad and Tobago and kind of getting SMEs in the room and having everybody kind of put their face out there and put their ideas out there and how can we start building on these ideas and making them something more concrete. And working within the country and with other agencies. We work within the commonwealth. Within the Caribbean we have MOUs with the UK, with Singapore. And sharing that knowledge. And I think the great salvation that's going to kind of happen for MSMEs using ICT is really going to be leveraging on that knowledge aspect or that idea aspect. How do you move something that's so intelligible and so nebulous and make it real to people and that's kind of some of the ways we are doing it I know people may have a lot of ideas in terms of that and maybe after the panelists speak we'll have a discussion but I'll pass you onto another panelist and then we'll keep the dialogue rolling.
>> OLIVIER MJ CREPIN-LEBLOND: I have two more questions then we have --
>> TRACY HACKSHAW: Tracy Hackshaw. Internet Society Ambassador. I work where the Government is in charge of the Enterprise Network Projects. I want to address the question from our Canada colleague directly how do you do it. There are a couple of things that the project uncovered. One, we need incentives. So for the MSMEs to participate directly in the economy provide what they came up saying why are we selling online if we can get better prices in the stores and the offline? So one of the things we have recommended is if you are selling online in the case of traveling we have value added tax that applies to products we remove value added tax so it's effectively cheaper online and that will affect both the local market and international market.
As well, we have a unique product as Sheba pointed out which is the cultural product. I believe it's considered to be 500 million US in value the Carnival culture sort of thing product and online the seal of things that are online are high primarily dias but also to the international market beyond the dias burrow and it's been estimated that 10 to 20% of the market so for so I would say for the MSMEs in Canada if there's something in particular maple syrup whatever it is that you can showcase to the world and you can get those companies involved in and have them as examples a company with maplesyrup.com is doing very well and they have made X dollars. So you can draw the other companies in with the best practice along those lines. That's the feedback we have gotten from our MSMEs have said because there's really reason for them to see online there's no real reason they can see as a reason and we have had 1500 people participating in that project and that's what we have gotten to address Colleen's point, though, about legal frameworks, I agree that legal frameworks are important and need to be addressed and will be addressed today. I assume the fact that it's happening nonetheless without the legal framework international trade is happening on the Internet and with the Small Island Developing States there's a way around it and we need to regulate that as fast as we can money is being transferred to easycheckout.com and these companies by other means and the Government isn't seeing a sign of that in their pockets.
The taxpayer -- the tax man isn't seeing it and it's going out and the money is coming to the MSMEs in quite a large amount but no news with what's trapping it so it's happening so we also have to deal with that issue despite there's the legal framework in some of the MSMEs so I think she was addressing it from this angle a more useful approach for the legal framework supporting and coming they need to come with the context as opposed to coming from only a best practice. So both context and best practice. So I think that's going to start us off as well.
>> SHEBA MOHAMMID: Thanks so much, Tracy. He's the chief financial architect at Trinidad. While I'm in the boring policy side, Tracy is the firsthand man to grab for projects. He's in that arena. Feel free to speak to us later on.
>> DR. GOVIND: Director from communication --
>> Speak into the mic.
>> DR. GOVIND: I'm Dr. Govind, Senior Director for communication and IT in New Delhi. I wanted to thank Sheba for a wonderful presentation on Tobago and Trinidad working on the SME sector we are already in India which is a big company we have a large number of SMEs sector but the only difference is we have clusters like textile clusters, IT sector.
And we have various clusters. Hundreds of clusters working in different parts of the big country. And there will be ICT which is the same small enterprises they will not know what kind of softwares they have to use for kind of the billing sector -- building sector for charity sector and all of those issues and the online business, how to sell, how to buy and these sectors what we are trying to do is see how can we enable the ICT in these small and medium devices which are not knowing what to do in a cluster way. And how to educate them. How to educate them on the various aspects of the ICT industry. And the trade aspects. And the -- even in the ICT what kind of software is there to buy the hardware. Whether the outcome will be the better option or any other kind of thing that is there so we are all working on these issues.
It's good that we can share this in that form with the Google and others players coming up so how can we replace the ICT is the M -- how can we place the ICT in MSME sector.
>> SEBASTIEN BACHOLLET: Okay. Maybe we'll go to the second panelist. Thank you.
>> LEE TUTHILL: Thank you very much. Another wonderful aspect of Trinidad and culture is the food. But that's a little harder to trade online these days so you still have to go there to get it. I'm glad there were a couple of questions about the legal framework because that's what I'll address. Like I said, I work within the WTO on general agreement on trade and services and we've done a lot of thinking and talking at least about eCommerce as we once called it but it goes by many other names today I think. eBusiness and so on.
This particular presentation was inspired by a meeting I attended not too long okay at the OECD about Internet intermediaries and a lot of the discussion was on the legal issues surrounding that. And it appeared to me that with the recession the global Economic Crisis as well as greater concern about cybercrime and cyber terrorism there was a trend really like never before towards wanting to regulate the Internet and regulate Internet access and in particular Internet access providers in a way that I had really not seen an enthusiasm for this before.
And there's also people on the other side of the fence saying: Wait a minute, shouldn't we still think twice.
To the point that one of the participants in the meeting at the OECD was even suggesting there should be a treaty on Internet. And I think this falls very clearly within the scope of Internet Governance. Both at the national and international level.
And I thought it would be good for people to have a little better understanding as they perhaps embark on more heavy regulation as to what is already in international law in the Services Agreement that does relate to the benefits, the rights and obligations that governments have vis-a-vis Internet access providers in particular.
Let's go to the next slide. It's just a title slide here.
The question, I'm going to raise it through a series of questions. One is: Who does the Services Agreement cover? And you can flip to the next slide. It's mostly a title.
We hold very close to our hearts this concept of universal coverage of services by the GATS Agreement. This means all commercial service and service suppliers are covered by the agreement and this does include Internet access providers on which there are probably at least half of the governments in the WTO have taken some form of commitment to the services that Internet access providers provide.
And a variety of Internet enabled services.
Now, what are the legal benefits offered by the GATS? First let's go to the next slide which shows you essentially the two what I call golden rules the GATS one is non-discrimination against countries, MFN, and the way you apply your trade and regulatory traditions affecting service suppliers.
And the other one that I think sometimes we as trade legal experts or trade negotiators tend to sometimes dismiss to easily but the business community certainly doesn't, the rule of transparency. That all of the measures, regulations, licensing criteria, if any, and so on would be made publicly available by Government so that the service providers know what the rules are and what they have to abide by.
Next comes to a slide on two rules that are actually committed individually by governments because they get to choose the services they wish to take greater levels of commitment on in the telecom and Internet access computer services area, there's quite extensive commitments. Less so in the area of IT-enabled services. But that's not what this particular presentation is about. But if there are commitments on the services, you're looking at there's a national treatment obligation to not discriminate against the foreign providers of a service any more than you would against the national. You would treat them as if they were a national.
And market access which within limits governments can have some restrictions they can reserve against. But in principle it means the governments agreed they will impose no quantitative and in some cases qualitative barriers to the supply of a service they have committed on.
Finally I think which is quite important as well is the slide on a general -- next slide -- on a general obligation that requires governments with all measures that affect trade and services that they administer these measures in a reasonable, objective and impartial way.
And I've worked a lot with regulators of telecom which are increasing becoming ICT regulators or converged regulators as they call it. And I think many of them are new and enthusiastic and they take very seriously their responsibility to be transparent, objective and impartial vis-a-vis all of the market participants.
Now, the next question we have is how. How do governments within the WTO context at least address some of the competing policy objectives they have today.
Could you change the slide, please? Thank you.
And I think there's a number of things written into the WTO which is fairly easy to read in some of the concerns people have today about Internet services and Internet providers.
Change the slide, please.
This was not designed for me not to be clicking by myself here. Bling, bling.
Yeah, the next slide shows that if you want to, some of the concerns involve public morals, think about issues related to obscenities obviously and other things on the Internet. Think about for example public order. German situations and some other countries that don't want hate kind of Web sites to proliferate inciting ethnic violence and stuff like that.
If you change the slide you also have issues coming up about the protection of human life and animal and health issues. Think of pharmaceuticals being sold over the Internet in markets where they should have prescriptions or considered to be dangerous for example. And pharmaceutical companies sort of struggling with these issues as well as governments.
And next slide.
Obviously just like the non-Internet world or the non-cyber world, you have concerns that are perhaps heightened about fraudulent practices, fraudulent commercial practices in this case and things like what do you do if the contract default is happening in another territory and another national jurisdiction people have called for these things to be international understandings or treaties that help governments cooperate on these kind of things and finally I know a big concern with people working on a national level as well as regional levels in many cases is working to protect the privacy and confidentiality of individuals and their records, their accounts, et cetera. This is something that we have already seen quite a start in having national rules. We don't have so much international rules.
But if you look at this collection of things, you really have a collection of issues if you switch to the next slide that look as if they were practically written for the cyber environment.
Well, they are -- click again I think.
They are already in the WTO. As it were. And they are in the WTO in an area called the Exceptions Provision. And you can see at the very top in blue it says nothing in this agreement shall be construed to prevent the adoption or enforcement by members of measures which and then if you click again you can see the rest of this provision they have anticipated governments having certain national objectives that are above trade.
Even the traders and the trade officials recognize certain public objectives perhaps trump trade when it comes to dealing with things so they can even violate the WTO, violate the GATS provisions if these concerns come into play.
So let's look a little bit about how this works. The next slide is again a title slide about sort of when it's possible for governments to take these departures, under what circumstances.
And the next slide shows one of the disciplines on governments taking advantage of this exception to the GATS or these public policy aims is in what we call the Shampo (phonetic). And it says that any of these measures that do depart from the GATS obligations wouldn't be applied in a manner that would constitute a means of arbitrary and unjustifiable discrimination. Which if you think about what I said a few slides ago, there's two forms of discrimination that the Services Agreement looks at and in both cases they are in principle not allowed.
So here you see the word unjustifiable discrimination implying there would be a justifiable discrimination if the problem at hand that you had to deal with, be it cyber terrorism, cybercrime, et cetera, implied some kind of measures aimed at this particular country, then that might be justified discrimination.
If you look at the second standard applied in the WTO, you click to the next slide, it implies you would not have a measure which is actually a disguised restriction on trade. And you know, that has not been beyond governments to try to use some higher policy objective to try to do something that perhaps not even inadvertently also happen to restrict trade as one of the hidden agenda items and it might be looking as it were looking at intent but it's often not that hard to determine.
>> LEE TUTHILL: We are really going here. Am I hearing myself?
>> LEE TUTHILL: Okay. I'm happy.
Anyway, a disguised restriction on trade. So anyway, you're not supposed to try to slip in through this Exceptions Clause trade restrictions because you may be sorry -- the Government may be sorry it didn't take a trade restriction earlier.
Yeah, let's move on. There's also a third thing which is also sometimes controversial when it's trade people but I won't deal with that here. If you click on another slide, click again, these provisions have the word necessary in them. And it's become what we call a Necessity Test. And a Necessity Test means that the measures you take to achieve these objectives would be judged against a standard that essentially implies two things.
One is proportionality. One, did the measure overreach? Did it really restrict trade more than it needed to?
So the expression we used when discussing it because we did borrow some of this from the Goods Agreement and bring it into the Services Agreement, the idea is you don't necessarily shoot a mouse with an elephant gun.
And the second kind of standard that the Necessity Test implies is that if in fact the exact same public policy objective, be t let's say public morals or purity of food if they can be achieved at the same level because the people don't question the public policy objective concern and we realise different morals of morality different things exist around the world but if the same level the Government desires to be achieved can be achieved with the less trade restrictive approach then that's the approach that should be taken.
Now, this test is usually performed by what we call Dispute Settlement Panels in the WTO which is a very active area in the WTO. It's a quasi judicial agency and it has meanwhile the trade negotiations have been stalled for years but the dispute settlement machinery has been working very hard and not only has this Necessity Test been used and set precedent in the goods area but we also had a case on Internet gambling in which this Necessity Test was applied in the services area, as well. And I think it's quite important to bear in mind, although it sometimes means the Government doesn't necessarily win its case, which is why sometimes it becomes controversial. And finally, a title slide on why. Why did I feel it was necessary to talk about that?
If you move to the next slide the main points I really wanted to make it is probably the first international treaty that does cover Internet as many of the -- one of the many services it covers, its rules and obligations tell us what we should do in terms of how we treat Internet access providers as governments. And I think that efforts to create both national but in particular international rules, if that were to come in the future, should take these existing standards into account or at least be aware if there's any departure from them but hopefully not need to depart from them. And you know, key trade obligations, the disciplines I think do relate to some of the solutions that might be sought on privacy, cybercrime, many of these issues that people are increasingly thinking about as the basis for greater regulation of Internet access.
>> SEBASTIEN BACHOLLET: Thank you, Lee. One or two questions, if there are? If not we will go to the other panelists -- okay, you have a question online? Thank you, Mr. Online.
>> OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien. Thank you, moderator. There's a question from Syed Razek at the India remote hub in India I guess. The question is to Ms. Tuthill with regards to the free market access, I think it's good to think of such a situation but at the same time it's also scary that it will make room for further fly by night marketers to swoop in and try to make a quick buck by setting up shop.
>> LEE TUTHILL: This is obviously a simplified version and governments all around the world have taken a view of careful marketing decisions on what to give market access on and what not to in some cases the Government agencies go a little further than suppliers want them to do but in much cases they have gone much less far than the trading partners would want them to. It's a careful balance. People don't commit on everything. In some cases they have told me that because of concern of those type fly-by-night suppliers in some of the areas such as telecom or computer services, people have deliberately committed on market access on a service combined with a joint venture requirement for example. So there are some solutions that governments have tried to craft when they have worked with the Services Agreement.
>> SEBASTIEN BACHOLLET: Thank you. May I ask Dimitri to take the next slot, if you agree?
>> DIMITRI YPSILANTI: Sure, thank you.
>> SEBASTIEN BACHOLLET: Thank you.
>> DIMITRI YPSILANTI: Good morning. I live in Paris, France and -- closer, sorry. Okay. Is that okay?
As I was saying I live in Paris, France. And in the mid '90s when we wanted to buy as individuals wanted to buy music or movies or small electronic devices we actually used to go to the United Kingdom because there was a significant price difference between the French market and the UK market. And of course with the advent of the Internet, we all got very excited that we saw the potential of cross-border competition taking place. And much more efficient pricing. And harmonization of pricing.
And -- harmonization of pricing and our member governments in fact had the same vision at the OECD in 1998. And we had a ministerial level conference in Ottawa, it was aimed basically a building trust for users and consumers and setting the ground tools for a digital marketplace. And there was important outcome of this conference over 12 years ago. We adopted a lot of declarations, what we call recommendations or guidances in OECD language. And just let me name some of them.
There was a declaration on protection of privacy on global networks. Obviously privacy is important for consumers as they share information with unknown retailers in both domestically and internationally.
We adopted a declaration on consumer protection in the context of electronic commerce.
Declaration of authentication for electronic commerce.
And then a taxation framework conditions. Not in order to make sure you're taxed. But that possibly was part of it. But also to make sure that you don't get taxed twice when you purchase an online product.
And again in the context of OECD, we are not the European Union our declarations, guidances, recommendations are exactly that. They don't impose a requirement on the member governments to adopt them. But they provide, if you want, a best practice idea of what member governments should try to aim for. And of course we can't -- we can't force them to do that. It's up to them. So whether they implement these recommendations in their own domestic frameworks or not is out of our hands.
Since that time, since '98, we have tried to develop all of these recommendations and guidances. And a couple of years ago we held another ministerial meeting in Sol on the future of the Internet economy where we again pushed our member governments forward on trying to go further in enhancing eCommerce as well as putting the idea on the table that the Internet is not something proliferate. That the Internet is the main part of our economies, has become the main part of our economies. And will be the main source of development, innovation, growth in our economies.
Data on eCommerce are not very good. So it's difficult to benchmark exactly what's been happening.
But just let me give you just a couple of figures.
In the United States business to consumer eCommerce is about $140 billion. That sounds a huge number. But it's in fact just under 4% of retail sales. So it's not high. And I think most of -- most of this activity is domestic in nature, not cross-border.
When you look at business-to-business eCommerce, the figures are much better. It represents about 27% of business transactions. And again, it's difficult to say how much of that activity is domestic and how much international.
Within the European Union, data shows that one-third of consumers purchase products online. But only 7% from another country. And obviously you should recall that European Union is supposedly a single market. So that 7% is incredibly low. And if you look at data at European Union retailers, 51% were selling online. Whereas only 21% conducted cross-border transactions within the EU. And again that's a fairly low number.
So there's obviously our vision in the mid '90s of harmonized markets and much more cross-border are competition didn't quite develop as we saw it. Although from a positive point of view, we now can actually purchase online from the UK instead of taking the train across to London.
And prices in Europe have harmonized. But I think that's mainly because much more domestic competition rather than competition from cross-border sales.
In fact, now if we do want to purchase music, movies, we go to the United States, where it's easier to get them. And we can get them from Amazon as long as you don't order too many. Otherwise customs will stop you from getting those.
So what are the difficulties with cross-border eCommerce?
There's a very good EU report which actually looks at the barriers. And this is within the European Union. And one of the first barriers is of course language problems. But if you want to -- to have sales outside your home base, obviously you can allow consumers to choose their language and in fact many do so.
High delivery costs is an issue. Evolving scams and misleading practices. Compliance with domestic fiscal regulations cause problems.
And regulatory barriers including questions pertaining to the applicability of each country's laws when cross-border transactions take place.
And of course, one of the biggest problems is redressibility that if your product doesn't get delivered or you charge too much for the product and you want to go back to the retailer in another country, it's quite difficult for you as a consumer to get redress from the retailer.
So when we look at one particular area, digital content, that's perhaps much more complex because immediately there we come across some digital rights management where frameworks differ across countries. And within the EU they differ even within the single EU market.
In 2008 the OECD issues a policy guidance for digital content which recommended that governments put in place policies that promote accessibility to digital content to all people regardless of location.
I can't see that coming in the very near future. It's a complex area. And any of you who have tried to buy music from Apple for example will see that you get diverted to the local Apple store and not to the one in the US or UK or wherever you live.
So digital rights management is a key issue.
It seems to be much less of an issue in -- at least at the moment in electronic books where if you buy a Kindle and want to buy a book, as long as you bought the Kindle in say Canada or the US and you live in France and you have no difficulty getting a book. And downloading it.
What should we do to enhance international trade in eCommerce. And I thought what Lee presented was an excellent framework, which exists. But doesn't seem to be applied as much as perhaps it should be.
I was interested to see that the US and Korea in their Free Trade Agreement have inserted a clause on eCommerce. I think that's a big step forward. And New Zealand, Australia and the Asian countries that have entered into a Free Trade Agreement just this year have also inserted clauses on eCommerce. And again, that's quite a big step forward.
One of the biggest difficulties that we need to overcome is secure payments. And there is a lot of work mainly by financial and other payment intermediaries in the market who are setting up different systems well, we all know PayPal but there's Amazon payments have come on the market. And Google Checkout on the market. And there are a number of institutions which have been set up.
For example International Council of Payment Network Operators, who are starting to standardize how you can undertake a payment without divulging your personal information to the retailer. And I think that's an important step forward to ensure your privacy to safeguard your identity and ensure security in payments.
The other important step that needs to be taken is to get much better dispute resolution -- transported dispute resolution. And that usually needs Government to Government or at least if there's a party which is a non-governmental body but attached to administration. So it's not necessarily Government department to Government department. But it could be a body like the Federal Trade Commission in the US getting agreements. The office of fair trade in the UK. But there needs to be some agreements. Some means to ensure better dispute resolution. And this could be undertaken again through intermediaries who could set up systems between companies to step in if there are disputes. So just let me summarize.
I think we have moved on. There's a lot of cross-border trade activity developing. But it's far from perfect. The sort of hopes that we had in the '90s when we saw the potential of the Internet have not quite been realised. And in many cases the inclusion of companies in transporter transactions is limited. It's often limited to the larger countries, to the wealthier economies. And is not well linked to the developing economies who perhaps have not got the domestic frameworks in place. And I think for them to start developing their domestic frameworks in order to support transporter transactions would provide in the longer term a significant boost to their economic activity. Thank you.
>> SEBASTIEN BACHOLLET: Thank you, Dimitri. Any questions? In the remote participation?
>> OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien, none at the moment. But I'm just about to ask so it might take a few seconds for them to type them.
>> SEBASTIEN BACHOLLET: Okay. Christopher? Just as a --
>> CHRIS BUCKRIDGE: Just as a filler until somebody else has the courage to speak. I would just like to pick up on a couple of Dimitri's points about the European Union internal market. I think he's made a very fair point which is fairly general. That the eCommerce was a bit overhyped in the 1990s.
There has been significant growth. But there are two factors which would be equally relevant for Trinidad and Tobago and perhaps even for Canada.
One is that -- one is language. However free and open the market is online services are sensitive to the language that's being employed. And in current circumstances that tends to privilege the local national market. And for example it occurred to me to wonder to what extent your constituencies in small and medium-sized enterprises in Trinidad and Tobago were addressing your native language in Spanish and French markets which are not insignificant.
The other issue is the liberalization of the post offices.
I regulate post birthday presents to I won't tell you how many grandchildren. And I'm not stingy. But usually cross-border the postal cost is higher than the value of the content of the package. Now why the post offices wish to cream off as much as possible from the cross-border market less than the local market I'll leave that to you but I will say there's trade on the cross-border products especially on small scale in the local level and I think that would affect the extent to which the Internet can promote cross-border eCommerce.
And of course I'll pick up on the last point. It depends a great deal on the availability of the broadband connection and a reliable one. And as we've heard from other panels from the speeches yesterday, although the Internet penetration is welcomely growing quite rapidly there's still vast areas that the world economy would not be able to use the Internet in the way Sheba was hoping that all of her small and medium-sized enterprises in Trinidad and Tobago would be able to do so. Thank you.
>> SEBASTIEN BACHOLLET: Thank you, Christopher. May I ask Alan to take -- Alan? Okay? One quick question. And then the last presenter will be able to speak. Two? Okay.
>> Excuse me; I know you said it already but it's for the transcript if you can say your name again.
>> KARLENE FRANCIS: My name is Karlene Francis. I'm from the OECS, Organisation of Eastern Caribbean States.
The point was raised that perhaps the GATS Agreement should take care of some of the concern about the legal regulator framework. But in my mind I'm wondering why is it that none of the developing countries seem to either -- or are using the provisions? So if you can comment, please?
>> LEE TUTHILL: Well, I think what it is is a little bit of cross fertilization from say for example ministries of trade which can be quite active in Geneva. And their dissemination of what they are doing into other ministries. Usually when we have a national event and we made meet with the trade officials we encourage them to have for services at least as many other ministries as possible that deal with these issues. And there is a proposal that was led by India. But in which at least a dozen developing countries were members that request that they want from not just developing countries but some of the secondary markets for outsourcing and call centres that they want to see more in the way of guaranteed market access commitments on an awful lot -- a long list of IT-enabled services.
The list became longer and longer because some of the members of the group were more interested in the lower end BPO and going all the way up to some of the knowledge services like financial advice.
So there are governments who are doing this.
I've worked -- had -- very recently was given a regional project in the Caribbean and I have been disappointed about the activity or lack thereof CARICOM in this WTO request process to get commitment on things you want. Variety of political intervening factors I won't go into here.
On the other side of course Antigua's case -- the case against the US on it's gambling restrictions was brought by Antigua it was seen very much as the very small guy going up against Goliath and it's interesting they won a case in a fashion they won their case by using -- by the Exceptions Provision that I was describing which is why I think it's so important to the future of perhaps an increased level of regulation of Internet access providers and the like. They essentially lost their case on Article 14 because the US persuasively argued that -- I'm grossly oversimplifying here. But persuasively argued that there was a risk of online gambling of children going in. Addicts who had been restricted from access to casinos doing it which you could control in a physical casino so the public policy objectives like this took precedence.
However Antigua then won the case because they could prove that there were certain aspects of gambling which the US did allow to happen online and this idea of discrimination or if in fact you had this wonderful objective that we agreed was important enough for you to have restricted Internet gambling, then you're contradicting yourself by allowing some forms of gambling to happen online and the ruling was that the US had to -- this is interesting how the WTO works. In Antigua, they had the first experience seeing how online trade case could work. The choice was to either get rid of that little area where they are allowing online gambling. I think it was offtrack betting. So that no gambling was allowed or to allow other forms of gambling.
So what happens when you know you try to get rid of the offtrack betting? It has a huge lobby. A very strong lobby that comes to the floor. So they are being forced to reconsider the whole banning of online gambling in other areas because the lobby in favor of offtrack betting online is so strong.
But that's in effect the beauty of the WTO. You finish your work at the legal level and then you let the domestic players get at each other and often they are the forces that then encourage a greater level of liberalization by bringing these factors.
But I think that there is probably in the IT area and the telecom computer -- telecom area at least, which itself often regulates Internet a better awareness of developing countries than a lot of other aspects of the GATS in part because we had dedicated negotiations in the telecom and IT area that at least regulators are often more aware of the international rules than in sectors that have been sleepier perhaps.
But it's far from perfect.
>> SEBASTIEN BACHOLLET: Thank you, last question, please.
>> RODNEY TAYLOR: Thank you, Rodney Taylor from the Caribbean Telecommunications Union living in Trinidad my observation with respect to the presentation so far is that I think the whole problem is for developing countries and eCommerce really I think has not been fulfilled primarily because I think there's a huge capacity issue. And even if we -- even if we were for example to offer our traditional products and services online, there's a question of whether or not we can -- we have the capacity even if we got 1% of global trade in our respective goods and services whether or not we have the capacity to do it.
And I think what we need to do is foster ready innovation within region. Why, for example, are we seeing the Googles and the Facebooks and these kinds of companies originating out of the Caribbean for example? And the CTU has established an Innovation and Entrepreneurship Trust that seeks to promote innovation particularly among young people in Jamaica for example you have a mobile phone penetration of 110 or 20%. So at least everybody has at least one and a half mobile phones.
>> RODNEY TAYLOR: Okay. Three? Everybody has three mobile phones why aren't we developing applications for mobile phones why are we still thinking of traditional products and services that really and truly we don't have the capacity to create outside of our borders?
>> SEBASTIEN BACHOLLET: Any panelists who want to -- if not, I will ask Alan to make his presentation. And maybe answer part of this question during the presentation. If not, welcome back after. Thank you.
>> ALAN DAVIDSON: Excellent. Well, well good morning, my name is Alan Davidson with Google and I would like to thank the organizers for having us here today. And despite our technical difficulties having spoken downstairs yesterday I just want to say how much I appreciate the acoustics of this room. They are wonderful.
And for my presentation I just really wanted to focus on some of the impediments to trade that companies like Google and those of us who focus to Christopher's point more on the movement of bits than atoms I think are increasingly facing.
So it's a relatively simple story. I think over the last two decades the Internet has transformed productivity, job creation, access to new markets and international trade generally. I think many agree. We've heard some of those stories already today. But our concern is that in some ways this engine of economic growth is now increasingly under attack. Or threatened in some ways by policies, governmental policies, that are restricting the free flow of information online. And these restrictions can be viewed as erecting real substantial barriers to trade. They threaten the open architecture and freedom that's been the key to the Internet's economic success.
So our hope is that policymakers will develop and aggressively pursue in agenda in part through trade structures that exist today and perhaps through new ones that foster the free flow of information online and protect it. So let me try to unpack that a little bit.
First, you know, I think we have already heard some of the great stories about how about the potential of the Internet to transform commerce. And we believe it's creating and continuing to create really an astounding array of opportunities around the world. In the US alone recent studies showed that more than 3 million Americans now owe their jobs to the Internet. Hundreds of thousands of businesses are using the Internet to reach once inaccessible markets to them and we think this is having a significant ripple effect and we can talk more and have talked a little bit about some of the challenges and opportunities that are out there. But my focus and the second point I want to make is the Internet architecture of openness and freedom which has been a fundamental prerequisite for generating these economic benefits is increasingly being challenged.
Part of what we have seen is that what was once seen as a kind of unstoppable technology promoting the free exchange of ideas and information is actually a medium that can be restricted censored or disrupted and that's been very much Google's experience in the last few years we've had major service blockages in over 25 different countries. For example right now you can't get access to YouTube in Turkey because of some videos that have been posted criticizing the founder of the Turkish Republic. We have been criticized in Pakistan over videos, YouTube has been blocked a year and a half over in China. It's just not those countries. It's a broad set of countries. It's not just Google that faces this, Facebook, Twitter, other Search Engine companies have had these issues freedom house has indicated in a recent study over 40 governments engage now in what they view as broad online censorship.
I say that there's a variety of forms that this kind of blocking can take part of it is wholesale blocking of access to service which I was just describing but it can take more subtle forms licensing requirements that force companies to remove particular kinds of content. Certain kinds of take-down requirements. Encouragement of self censorship of users of companies through surveillance or monitoring of users, threats of legal action and particularly a concern that often these are done without a tremendous amount of transparency. And as a result, it's becoming harder for companies to compete in certain foreign markets where the governments choose to favor local firms or impose these kinds of regulations.
Some of the particular kinds of impacts. Blocking Internet services outright or regularly disrupting them as we faced in some of the examples I mentioned we believe is in essence a non-tariff trade barrier that's not normally tolerated in trade regulation. Demanding that data be stored in a country or other kind of Internet regulations that are designed to favor local companies can be viewed as a local presence requirement. Or discriminatory practice in favor of a local -- local players.
We are concerned about imposing requirements on online service providers when those requirements aren't made public which has certainly been an experience that we've had and it's a departure from the transparency regime we have already heard about.
And finally, we've experienced and others have, as well, the issuing of orders to online service providers or others without any legal process or appropriate legal process which we also think is a departure from the due process requirements that we have heard about.
So taken together, I think our experience is that we -- that many companies are facing a very difficult international trade environment.
So what can we do about it? I think there are three things that we propose.
First to focus on and publicly highlight what we view as some of these unfair trade barriers and practices by governments that censor or disrupt online services. So part of it is just being out there and talking about it and getting information out there.
But a second is to try to pursue and hold accountable governments that would impede the free flow of information. Including taking appropriate actions under the regimes that exist already. And I think we have just begun to play out how those existing tools could be used. And the final thing and I'll say a little bit more about this is just to figure out whether we need to craft new trade rules. Including some of the bilateral or regional agreements that are being developed that could better discipline the actions that impede the free flow of information on the Internet that I've discussed.
In particular you know one of our big pitches to the US Government and we hope others will consider this as well is to insist that Free Trade Agreements explicitly recognize the concerns about the free flow of information online. And establish a presumption in favor of it.
So the Korea-US Free Trade Agreement which has already been mentioned by Dimitri is a good example which includes a provision on the free flow of information explicitly and I think that's a very good start.
We have also spoken within the United States about the potential for the transPacific Partnership Trade Agreement which is under development to include specifically include stronger provisions in this area and we're hopeful that people will think about that.
A second and really important area for companies like Google is promoting -- and we actually think for our users and business partners, as well, is promoting stronger transparency rules.
One of the biggest concerns that we have is that we get tremendous number of requests to remove information from the Internet. Requests for information about our users. These can have a big impact on our ability to provide our services. And often it's done without a lot of public knowledge or knowledge of our users. Google itself has tried to take a step to give more information to people about these kinds of requests. Or orders. We have a new service that was launched this spring. It's on Google.com/Governmentrequests or you can type the word government requests into your favorite Search Engine it's the first result on Bing I'll say if you do it.
And you can see this tool that we have created which is -- it's a map of the world. And shows all of the requests that we've gotten from any particular country to either remove information from the Internet or to provide information about users. And it's kind of shocking when you take a look at it because there really are a huge number of these requests.
Our hope is it's an example of the kinds of transparency that other companies might provide or governments themselves might provide and really in the longer run what we need is for governments to go beyond the current rules and for example publish on a regular basis all of the orders or requests that they make of Internet information services or the limits they put on information on the Internet. To publish in advance the measures that they want to impose to -- that would affect information services. And to publish the terms of licenses that they impose on information services and this would go a hugely long way to giving more information to the user community but also to the business community but what's being faced out there and then the last thing I should say and then we should really turn to questions is that a third area where we hope that there will be more attention is about the issue of local investment before Internet services can be proved.
We really believe that service providers particularly in the bits and atoms world should be able to provide their services either on a cross-border basis or through local investment placement of servers creation of data centres but they should be ensured the same treatment either way and this is an area where we have seen increasing attention -- or increasing tension I should say and we hope that there will be more attention paid to it.
So in conclusion I would just say, you know, our belief that it's in the Internet age barriers to the free flow of information is in effect barriers to trade. And they ought to be addressed through the existing frameworks that we have. Through new frameworks, if we need them. They present a tremendous challenge. But there's also a great opportunity for Government officials to align our trade policy with the needs of the 21st Century information economy. And we look forward to working with you all and with them to do that. So thank you for your time.
>> SEBASTIEN BACHOLLET: Thank you, Alan. Now it's time to have more questions. Okay.
As we have said, please give us your name, affiliation, country.
>> SOKOL HAXHIU: Okay. My name is Sokol Haxhiu. I'm from Albania representing the Centre for Development and Technology. Regarding what you said for the Government's request so you comply with any request you receive from the governments.
>> ALAN DAVIDSON: No. To be honest --
>> SOKOL HAXHIU: If not --
>> ALAN DAVIDSON: Simple answer.
>> SOKOL HAXHIU: And this was a second: If not, where do you base that?
>> ALAN DAVIDSON: I would say this is true for most companies that operate in this space that your -- that the answers vary and are very fact dependent. We all have different structures out there. But I think in most cases we are very eager to try to work with law enforcement where the requests are appropriate. We have a team of people and I can tell you at Google who work 24 hours a day to receive these requests, evaluate them. And we are -- most of our services are offered out of the United States. And need to comply with US law. And there's a set of paths for how different requests are handled under the requirements of US law. And then -- and we evaluate requests and follow the legal path that we're required to under US law. Different companies operate in different ways. But that's I think the general approach.
And so it's not every request that can be immediately answered. But we have a team of people. And we regularly do work with governments around the world to deal with that request.
>> SOKOL HAXHIU: Thank you.
>> AUDIENCE: I'm from Hanyang University in Korea. My question goes to Lee. If I read a book online on Kindle is this a trading service or trading good if we need a bigger framework?
>> LEE TUTHILL: You know, that's one of the issues we struggled with in our eCommerce Work Programme. And it's actually one of the reasons our eCommerce Work Programme is more abundant because there's a stalemate on that particular issue and one of the sides of the aisle feels the eBook is in fact a service and the physical book was a physical embodiment that was there before the Internet exists and the other side feels like these are virtual goods because they were always goods throughout history so let's consider them virtual goods. Politically there's that debate. If you take something as straightforward as a book I can make it sound straightforward but when you start getting into more sensitive cultural products, it also starts to get much more complicated. So I could answer your question during the coffee break but that's the answer I need to give that shows where the WTO stands on that right now.
If you have any . . .
>> DIMITRI YPSILANTI: Well I would think if you buy a book from Amazon US and you live in Korea, then it's -- then it's a trade in services. I can say that because we don't have -- as my part of OECD doesn't have responsibility for trade. So I'm not committing anyone.
I did -- if I may, I did have a question for Lee, though, in the context of Cloud Computing. Transporter storage of data. Would that be considered a trading activity or not?
>> LEE TUTHILL: You know, we've been exploring again -- when we want to say the neutral word we use for both your question and this question is classification issues. And we are really combing through the underlying definitions of what we use to try to commit on our very antiquated -- they date to 1991. And you know they were being negotiated for the years in the '80s. So I mean, Internet wasn't even commercialized yet then.
And we're trying to figure out how you could best adapt what we have to answer questions like that.
I think we all believe it's in there somewhere in computer services or online at a telecom services or a combination thereof and I think we would like to encourage people to not think it's not in there. Very much so because there's quite a lot of important commitments in these areas that should mean something. But exactly which service it is, web hosting we get asked all of the time that's a form of storage then your question goes further what if it's stored in a Cloud. You know, also the question raises important questions of legal jurisdiction which in that GATS isn't so much a question for national lawmakers as it is of a question of standing up for an injured party and I think you go back to the corporate structure rather than the geographical place but some people question that.
>> SEBASTIEN BACHOLLET: Thank you. Any questions? Last questions? Go ahead.
>> LEE TUTHILL: I have a question for Google as to have you considered for example I think you're right, some of the aspects of what you're worried about do -- are potentially addressed by what exists in the Services Agreement. But have you given thought to classification issues for yourself and that conundrum?
>> ALAN DAVIDSON: I think we have. We actually -- I don't want to spill the beans but we're receiving a paper next week at a conference we're hosting in Budapest on free expression online. If anybody is interested in hearing more about it I would be happy to tell you offline where we actually try to explore some of these issues. So I'll leave it to the real trade nerds at Google I'm not one of them but I say that with the real trade nerds in the room to get into the details of it but I think we are eager to try to use the tools that exist and explore how they can be used. And I think that's an important and necessary starting point before we go out and try to build new ones.
It seems that there are possibility to address some of the concerns that companies are raising now. And so we're eager to try that.
>> SEBASTIEN BACHOLLET: Olivier, you have a question.
>>OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien, no, I don't have a question. There's a question from the ISOC Chennai hub which I guess is the to the whole panel. The starting point for -- is the Search Engine even for transactions not conducted on the Internet? The first step is to search for information with technology available for localized searches. Can governments indirectly restrain or prioritize Internet commerce to local business firms?
>> SEBASTIEN BACHOLLET: Who wants to answer that?
>> ALAN DAVIDSON: It sounds I should probably take a first cut at it. Well, I think our hope is it's not governments that will be restraining or prioritizing commerce to local business firms. And that's pretty much our concern that we have raised. And the fear that in some places already we worry there is preference and pressure towards preferencing local providers.
I think our hope and expectation is that search in all its different forms will continue to try to provide relevant information to users for cases that will be -- in a lot of cases that will be a local result or a local firm. That's often where commerce and information best resides.
So we expect that to happen. But I think our fear is that we will see pressure from governments.
I think now right now it's really -- it's been more blunt instruments that actually outright block services wholesale that we have seen partly because I think the tools available to Government are relatively blunt at the movement. But we have seen that. And that's our broad answer.
>> SEBASTIEN BACHOLLET: Lee?
>> LEE TUTHILL: Just very briefly, I think I mentioned in my presentation that for services national treatment was committable and thus scalable. But were the question to be limited to preferential treatment in Search Engines for online ordering of goods, the general agreement on trade and tariffs that covers goods in the WTO, there's no question. National preferences would be illegal. Because national treatment is an automatic right for goods-related trade.
>> SEBASTIEN BACHOLLET: Thank you, Dimitri. Or Sheba, do you want to add something? Yes.
>> SHEBA MOHAMMID: I think we've had a comment on the Search Engine of choice. So I think we are okay there.
>> SEBASTIEN BACHOLLET: Okay. Thank you. Great.
>> MARIA PUY: My name is Maria Puy. I'm an ISOC Internet Ambassador but also speaking in my personal capacity. I wanted to ask how do you think -- like it's like a global question.
How do you think that the countries should face all of the problems related to authentication of identities regarding eCommerce? It's a big problem. Some of the countries like Argentina have taken a legal instrument, a concrete legal instrument regarding electronic signature. But it hasn't been implemented yet. So it's an unuseful tool for us.
What do you think about this? And how should we -- it be solved by the countries or globally?
>> SEBASTIEN BACHOLLET: Thank you. Dimitri?
>> DIMITRI YPSILANTI: Yeah, I didn't mention I think that identity theft has been a big problem. And it's not only a problem international. It's a national problem when people are purchasing online within their own country.
I also mentioned that there are a number of payment intermediaries, financial intermediaries that are taking steps so you do not have to divulge your personal information to the -- online or to the retailer that you are dealing with. So in fact when you go to make a payment, you divert it -- you divert it to your bank. And then it's -- the relationship is between your bank and the retailer.
So there's no personal information. So that is one -- at least one way and it seems to me quite an effective way of cutting down the necessity of providing your detailed banking, credit card and other information online. And I think that's the way to go is using intermediaries to take up that function.
>> SHEBA MOHAMMID: Thanks, Dimitri. And I share a concern because in Trinidad and Tobago similar issue going on where we had a bill and it's getting promulgated and whether it's licensing or how it should be licensed to CSPs and how do you keep things technically neutral and it came down to cross jurisdictional issues as we come up with policies in Trinidad how does that become effective cross borders so I think Dimitri has a practical solution and how does it keep pace with technology, as well. It becomes an issue.
>> SEBASTIEN BACHOLLET: Thank you. Olivier, you want to add something?
>> OLIVIER MJ CREPIN-LEBLOND: Maybe I will ask the final question. Where consumers could participate in this discussion and reflection? Is there one place where there's a governance place of this issue taking care we discussed that with the IGF meeting once a year, no more where you have various participants with different Government sellers and consumers. Where is the best place to be involved in that as an end users or end customer place?
>> DIMITRI YPSILANTI: Well I mentioned that OECD has the committee on consumer policy where we look at these type of issues and consumers international which is an NGO for consumers is involved in the process. Obviously OECD has 33 member countries we can't have all of the domestic consumer organisations in the meetings. But they do via consumers international, they do make their voice heard.
>> ALAN DAVIDSON: I would add I think this is -- it's an important question and this is going to be a dialogue or conversation that's going to be happening in many places for probably a number of years as we work this out. And so I think you'll see national governments increasingly engaging in these issues both to get their own national policy frameworks right but also in the international play. I think Civil Society has a major role to play partly why we're sponsoring this big event next week but also I hope they will continue to engage in all of the forums they have but ultimately this is a very important question for users, small businesses and for industries generally and our hope is we will see more engagement and have people working together to try to update if necessary and use our trade framework and to bring it into line and match the needs of the Internet.
>> SHEBA MOHAMMID: I think another kind of channel we can use is some of the Dynamic Coalitions that have been formed because a lot of the trader use are cross-cutting use so freedom of expressions that will be picked up in a few of Dynamic Coalitions that are out there if they are active or become more active.
>> LEE TUTHILL: Unlike the OECD, the WTO doesn't have -- doesn't -- consumers can't represent themselves directly. And the consumer issues are indirectly considered rather than directly considered. But we do expect our governments to in fact bring this synthesis of views and in a case -- in a few cases when I've attended interagency conferences at a national level the most interesting debate has occurred when a consumer rights organisation is invited by the Government to be part of this consideration of what their trade priorities will be. So that's extremely important that it happens at WTO that it happens at the national level.
>> SEBASTIEN BACHOLLET: Thank you. Last online question.
>> OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien. I have a long question which will require a short answer.
Major eCommerce and this is from ISOC Great Lakes I will say for the transcript major eCommerce before listing a seller's product is available in a certain country for instance a clothing item may not be listed as available in Spain if a minimum quantity isn't warehoused in Spain for a foreign business to warehouse a minimum volume there would be ground level barriers could this be another way by which free trade on the Internet is slowed down directly.
>> SEBASTIEN BACHOLLET: May I ask that you answer your question and you make your final remarks so that we can close this meeting because we are just on time. It is great. You do a good job. But if you can do the answer and some concluding remark as you want. And others as you want. Okay. Dimitri, go ahead.
>> DIMITRI YPSILANTI: Well, I think the question is would this slow down free trade. And the answer is yes. And it seems to me it's not a very proper way of conducting eCommerce, eCommerce at the global level, international level, you should be able to get what you want from where you want. And from the questions it seems that this is a company taking restrictive action. So it's a big -- a bit odd that retailer from the other country doesn't find a second way to sell its products in the country. It seems to be an unfair process of undertaking trade.
>> ALAN DAVIDSON: I would just say, you know, one of the really obvious and exciting things about the Internet is the ability to sell globally without having to have a presence globally in every country. And that's both true for this kind of example or for the new kinds of information services, Cloud Computing services that we're going to be seeing offered.
So we would -- we would be concerned about the ways that yes, trade could be slowed down by requirements like this. And it's not obvious how they would play out. As I say in the bits business. But we have seen more conversation about for example the need to have servers in a country or to have a presence in a country and I think that would be very damaging to the possibilities for international trade on the Internet.
So we would be concerned about that.
>> SHEBA MOHAMMID: And I think similarly we are concerned and it really comes down to global freedom and our boundaries and barriers kind of being constructed right now and how do traditional trade flows and markets be represented by this knowledge-based economy. Are there changes that need to be made. We have to think more creatively about how we approach trade as a whole. I mean there are issues in terms of what's a good. What's a service. This is almost unchartered territory in some ways. And I think if we kind of coalesce and continue to dialogue that's the only way to approach it with issues like Cloud Computing and Cloud sourcing there are new gamuts coming up all the time and new ways and new avenues for trade, for goods and services for what it is and the only way to keep at it is to get the dialogue going and realise that everyone kind of is a stakeholder here that it's not just big corporations but consumers regardless of what aspect you're involved in with global policy or global citizen this affects you in a very real way so just keeping that dialogue going I think.
>> LEE TUTHILL: I agree with what everyone before me said about warehousing so I won't address it directly so forgive me to the questioner and just a final remark I think why I wanted to serve on this panel after being invited is I think that governments everywhere are thinking about coming up with national as well as some international guidelines I've been told or stronger rules on privacy and cybercrime, et cetera. And I just wanted people to realise that they are not necessarily reinventing the wheel. There are some disciplines out there.
Many of these concerns fall within what might be our exceptions. But the exceptions have three very important caveats to them.
You know, basically that are there to ensure that people don't hide trade barriers behind other public policy concerns and try to give preference to local suppliers or block the provision of services using what seem to be very, very sacrosanct public policy concerns as a clover. Thank you.
>> SEBASTIEN BACHOLLET: Thank you very much. I would like you to join me to thank the panelists for the presentation and very good presentation and explanation. And thank you, Lee, thank you, Sheba, thank you Alan and thank you, Dimitri and thank you, Olivier for your remote access participation online in life here.
>>OLIVIER MJ CREPIN-LEBLOND: And thank you to the audience here and thank you to the audience out here that's watching us.
>> SEBASTIEN BACHOLLET: And thanks go to Siva from India who set up this panel and I was just acting for him here and thank you very much for your participation and see you in other areas during this IGF during the next three days. Thank you very much.
(Session ended at 1103)
International Trade and Internet Governance