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Digital Trade Rules


Source: Center for Economic and Policy Research

Photo by Alexander Supertramp/Shutterstock.com

 

The largest corporations in the history of the world ― Amazon, Facebook, Google, Apple, and Microsoft ― are seeking to use “trade” rules to rig the rules of the global (digital) economy to enable them to collect more data, exercise more control over our lives and over their workers, and amass ever more profit. More than 80 members of the World Trade Organization (WTO) are currently negotiating a new agreement on digital trade based on these proposals. This paper seeks to explain how these corporations operate in order to achieve their goals; what the potential impacts of the rules would be― on workers, citizens, communities, developing countries, public services, safety and security, and democracy itself; what the alternatives are; and what we can do to stop this mass corporate takeover.

This paper was written toward the end of 2019. Today, in 2020, the world seems a different place, as we collectively experience the coronavirus crisis and new awareness about issues of racism and policy brutality. These crises have brought about new, and highlighted existing, urgent problems ― often exacerbated by Big Tech’s iron grip on our economic and social lives.

Emerging Challenges in 2020

The WTO itself is in serious crisis. The 12th WTO Ministerial Conference was due to be held in June 2020, but has been postponed ― possibly for another year. WTO Director-General Roberto Azevêdo has said he will step down on August 31, 2020, a year before completing his term. The United States is still blocking the appointment of new Appellate Body Members to the WTO, which means the WTO’s judicial function is not operational.

At the same time, many countries have had to take measures to deal with the novel coronavirus pandemic that are inconsistent with their WTO obligations. This is leading to a rethinking of whether the WTO model ― which left many countries short on domestic productive capacity and locked in rules that put foreign corporate rights before the domestic public health emergency ― are really fit for this purpose. There is a need for countries to have greater flexibility to depart from existing trade rules. This could well lead to a fundamental rethink of the WTO and its model of extreme liberalization ― which would be an urgent and welcome outcome.

Online commerce is booming, but many technology start-ups and thousands of small businesses have been hit hard by the pandemic-related economic shutdowns. On the contrary, Facebook, Google, and Amazon have seen their market shares and profits explode during the crisis.

At the same time, there is growing concern about the control that Big Tech exerts over so many aspects of public life, especially through anticompetitive behavior. Members of the US Congress and several federal agencies have joined European Union leaders in growing calls to break up vertically integrated roll-up corporations like Amazon, Google and Facebook.

A key provision of US tech policy that shields platforms from liability is coming under political scrutiny in the United States. As science deniers circulated inaccurate information about COVID-19 on social media, some tech corporations began to take steps to remove or flag erroneous content from their platforms. The Trump administration claimed a political bias, and Republicans are looking into rescinding the platforms’ immunity. At the same time, Democrats are concerned about some of the platforms’ policies of not taking down false or misleading political advertising that could jeopardize our elections.

There is growing recognition in many countries that digital corporations should pay their fair share of taxes. The EU is proposing this as a fiscal support measure in the wake of the crisis, but the Trump administration has just abandoned efforts toward a multilateral solution at the Organization for Economic Cooperation and Development (OECD).

Dependence on essential workers during the coronavirus crisis has also led to a greater understanding of the need for hazard pay and social protections,especially in sectors with sectoral bargaining agreements. But so-called “gig”workers, such as Uber drivers, GrubHub deliverers, and Instacart shoppers, still do not enjoy basic labor rights as workers, rather than as “contractors.”

In the United States, pressure campaigns have successfully targeted the use of facial recognition software powered by artificial intelligence (AI), since studies have demonstrated the racist impacts of such software: AI gives false positives for Black people more often than for whites.

At the same time, WTO members have undertaken multiple rounds of negotiations with a view to drafting a new “plurilateral” agreement on digital trade. They have negotiated draft texts in secret on 13 different provisions on data collection, liability, market access rights, nondiscrimination, source code disclosure, taxes, cybersecurity, and more, as described in this paper.

During these times of crisis, uncertainty, and rapid transformation, we need our governments to be able to respond more proactively to emerging problems. We need public interest concerns about economic rights, racial justice and fairness, and human, civil, and political rights to be the focus of conversations about rewriting the rules governing data and technology.

To accomplish this, however, we need to ensure that corporations are unable to acquire new WTO “trade” disciplines designed by Big Tech to consolidate their power over our economy and limit democratic oversight in the public interest.

Download the full report.

 

Deborah James is the Director of International Programs at the Center for Economic and Policy Research and coordinates the global Our World Is Not for Sale (OWINFS) network.

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