For the first time at the Internet Governance Forum’s (IGF) annual meeting last November, a workshop was held to discuss the impact of trade agreements on Internet governance. To the casual observer, it may appear unusual that a multi-stakeholder platform for Internet policy discussions, such as the IGF, would care about the legal implications of trade agreements. These developments, however, mark the emergence of a fledgling, complex and arguably tenuous relationship between trade policy and Internet governance.
Already, several trade agreements have emerged that are directly or indirectly setting rules for the functioning of the Internet. The recently concluded Trans-Pacific Partnership Agreement (TPP), for example, contains several provisions that impact the cross-border flow of digital data, open source software, digital intellectual property protection, and liabilities of Internet intermediaries. Other trade agreements under negotiation contain similar provisions, including the Trade in Services Agreement, which impacts 23 countries covering about 70 percent of the global service economy, and the Transatlantic Trade and Investment Partnership between the European Union and the United States. Such agreements often become the basis on which future plurilateral and multilateral norms are set, including within multilateral bodies such as World Trade Organization (WTO), as evidenced by the Korea-U.S. free trade agreement.
The interface between trade law and Internet governance stands at a critical juncture. While several commercial aspects of Internet regulation have precedence in trade agreements – such as preventing data localization measures in digital trade – socially critical issues such as privacy, innovation in developing countries, and democratic standard-setting, are often ignored, despite their evident linkage with digital trade. This is primarily because they are politically sensitive and informed by ideological conflicts amongst negotiating parties. The use of trade policy to bring about radical shifts in Internet governance not only influences business models of Internet companies, but also impacts participation, transparency, accountability, legitimacy, and effectiveness in Internet governance.
Changes within Internet governance models also impact digital trade. For instance, the recent European Court of Justice judgment in the Schrems case (Case C-362/14, Maximillian Schrems v Data Protection Commissioner) invalidating the U.S.-EU Safe Harbour Agreement raises uncertainties regarding the hundreds of businesses that are built on transatlantic digital data transfers. The subsequent tussle between the EU and United States on negotiating issues of privacy and data protection in recent negotiations thus comes as no surprise!
The fundamental premises of trade policy and Internet governance are arguably diametrically opposed. The broader goals of Internet tend to defy national borders as they connect the globe through open, transparent networks, while sovereignty and secretiveness are both hallmarks of the current trade regime, within Regional Trade Agreements (RTAs) and the WTO. This makes interaction and coordination between the two disciplines uneasy and complex. Developed countries such as the United States, where most Internet giants are headquartered, have adopted a pro-industry agenda in recent trade negotiations, i.e. enabling cross-border data flows, protecting digital IP rights, and removing provisions on local preferences in digital trade. In particular, the United States Trade Representative appears to have adopted a policy of “serial bilateralism” to lock in fundamental reforms to Internet governance. This development almost appears ironic, as historically, the architecture of the Internet was governed by a highly privatized and relatively depoliticized model (albeit with strong U.S.-backed influences particularly in the International Corporation for Assigned Names and Numbers). Multilateral bodies such as International Telecommunications Union (ITU) had been much weaker, and only recently have they started engaging proactively with issues of Internet governance.
The perceptible shift in Internet governance from a privatized system focused on open innovation, to a more centrally-controlled environment centered on regulatory aspects, is an outcome of both strategic and economic interests. Not only is it observed in illiberal regimes such as China and Russia, but also in democratic countries such as India and France. The rising suspicions regarding U.S. government tactics such as mass online surveillance, in particular, have increased attention to state control of cyberspace and development of domestic encryption standards in many countries, most prominently China. As legal intervention in the digital space has increased, the political aspects of the Internet such as legitimacy of control and civic participation have also become important (reminiscent of the “law and politics approach”). Technical issues have become politicized: for example, Internet protocols and security standards, previously viewed as purely engineering tools, have become strategic governance issues.
The current Internet governance regime is not a “singular enterprise,” but it consists of dispersed, uncoordinated legal and institutional structures, resulting in a complex web of regulatory and policy structures. The focus on “multistakeholderism” in Internet governance should be viewed with caution – the cyber regime complex is politicized, and nebulous, with poorer countries under-represented, and Internet companies, private internet organizations, and most recently, trade departments of developed countries, over-represented. At the same time, with significant push from China and other developing countries, there is a counter-movement towards multilateralism via bodies such as the ITU, and increasing collaborations between bodies such as the WTO, United Nations and ITU.
It remains to be seen whether the disciplines of trade policy and Internet governance will emerge harmoniously, or if a collision between them will fragment the international legal order governing the Internet economy. While digital business models are integrating globally, there appears to be a high risk of fragmentation of the global legal order governing Internet economy, particularly with the surge in Internet provisions in recent RTAs. Going forward, researchers working in this domain will need to address some critical issues in emerging areas of digital trade, such as whether trade agreements should be concerned with privacy, standard-setting for Internet technologies, open innovation, and digital inclusion. Such questions delve deep into the political economy of the Internet and digital trade, and are likely to provide a macro-view of the patterns regarding how the political economy of digital world influences development of trade policy, and vice versa. It is hoped that the traditional disciplinary boundaries will be challenged and re-evaluated in this regard, as the emerging complexities in the digital world require bold and unconventional policy response.
For now, it is safe to infer that given the fast pace of Internet technology evolution and the impact it has on a networked global society, it is premature and possibly detrimental to set in stone fundamental norms of Internet governance within trade agreements that can shape and alter the future of the Internet. So, are we ready yet to take on the challenge of trade and internet governance? Possibly, not. But the wait cannot be too long.
Neha Mishra is a graduate in public policy from the Lee Kuan Yew School of Public Policy in Singapore. She previously completed her LLM in Public International Law from the London School of Economics. She previously practised competition and trade law, as well worked on trade policy issues, in the U.K., India and Singapore, and she will be soon starting her doctoral studies in international trade law.