POLICY BRIEF Why Trade Agreements are not Setting Information Free

Transcription

1 POLICY BRIEF Why Trade Agreements are not Setting Information Free Susan Ariel Aaronson, Ph.D. In December 2012, IIEP published a policy brief, Can Trade Policy Set Information Free? which compared US, EU and Canadian digital trade policies, and examined their effects on human rights and Internet governance. Research for the policy brief was supported by the MacArthur Foundation and the Minerva Initiative of the US Department of Defense. In the wake of the Snowden allegations and other developments, we have updated our findings and policy recommendations, focusing on the free flow of information across borders. Background: Why do government officials struggle to ensure the free flow of information across borders? Today, information is currency it facilitates productivity, exchange, technology, and trade. 1 Because of the importance of information, policymakers must make tough choices about whether, when, and how to restrict information flows. On one hand, officials want to encourage the flow of information across borders in the interest of commerce, education, technology, and scientific progress. On the other hand, at times these same officials must restrict the free flow of information to achieve other important policy goals such as preventing spam and piracy or to protect national security, public morals, and privacy. However, when these officials restrict information flows, they may, without intent, weaken the global Internet as a medium for communication, education, and innovation. 2 Policymakers do not only struggle to balance their citizens and companies needs for open flows. They must find ways to ensure that the rules governing cross-border data work effectively across nations and systems, reflecting the ideal of the global interoperable 1 We do not have reliable data on cross-border data flows per se and do not know their importance regarding economic growth. Data flows are hard to track and measure -because an outflow of data may not be the same as the export of data. United States International Trade Commission, Digital Trade in the US and Global Economies, Part 1, Investigation No , USITC Publication 4415, p. 4-1, Also see Michael Mandel, Data, Trade and Growth, Progressive Policy Institute, see pp for his estimates for the US and the EU. 2 OECD, OECD Council Recommendation on Principles for Internet Policy Making, December 13, 2011, 1

2 Internet (Council of Europe: 2014). However, there is no one governance venue to address these issues and regulate information flows. The Turn to Trade as a Tool to Encourage Information Flows In recent years, some governments have turned to trade agreements to facilitate information flows. The US, Canada, and the EU have included non-binding language on information flows in several trade agreements (Aaronson: 2012). As of October 2014, US trade officials are negotiating language on cross-border data flows in three very different trade agreements: with the 28 nations of the EU in the Transatlantic Trade and Investment Partnership (T-TIP); with 10 nations bordering the Pacific in the Transpacific Partnership (TPP); and with 49 other members of the WTO (including the 28 EU states) in the Trade in Services Agreement of the WTO (TISA). The US and the EU, as leaders in global e-commerce and digital trade, are the main demandeurs of these provisions. However, many states including Australia and Canada, have not responded positively to America s proposed language to facilitate the free flow of information. Leaders of these states worry about their ability to control information flows as well as their dependence on US companies to provide web services (which must comply with US rules on privacy and national security). 3 They are increasingly concerned that the US not only dominates the Internet economy but Internet governance. In fact, officials from many countries, including France, India, Brazil, and Norway, want more control over their domestic Internet, as well as new approaches to Internet governance. 4 What do these provisions say about Information Flows and what does the language mean for Internet governance? In all three trade talks, trade negotiators are still discussing the specific language, and that language remains confidential has not been leaked. Hence, we do not know exactly what is in these three negotiations. However, we do know that the US wants to build on aspirational language in the e-commerce chapter of the US Korea FTA. 5 We also know that the US has proposed language in TPP obligating negotiating countries not to block the cross-border transfer of inbound and outbound data over the Internet. The US has also 3 NA, US Tables New TiSA Proposal To Ensure Free Flow of Data, Inside US Trade 5/15/2014, On TISA negotiations, pl. see Department of Foreign Affairs and Trade, Australia, Trade in Services Agreement (TiSA), On TTIP, see and on TPP, see all last searched 6/18/ Euractive, The Global Battle to Rule the Internet, 3/10/2010, and EU Challenges US Hegemony in Global Internet Governance, 6/12/2013, Stig Ovan, How Two Remote Artic Territories Became the Front Line in the Battle for Internet Privacy, ZDNET, 10/1/2014, 5 US/Korea FTA, Chapter 15, Article 15.8 Electronic Commerce, 2

3 called for provisions allowing businesses to operating in countries via e-commerce platforms, without establishing a physical presence in the country. 6 Regarding TISA, the US and the EU want clearer standards regarding when governments can block the free flow of information (e.g., to protect privacy, public morals, Internet stability, or national security). However, we don t know if trade negotiators in TTIP, TPP and TISA will agree to actionable and disputable obligations. The Effects of the Snowden Revelations Until June 2013, the public was not interested in digital trade talks. However, after media outlets publicized the revelations of former US National Security Agency (NSA) analyst Edward Snowden, many netizens and policymakers became activists. Snowden alleged that the NSA (and other surveillance agencies) was engaged in massive global surveillance through the Internet. 7 Netizens and government officials protested both in the streets and in diplomatic cables. Many governments used trade policies to express their displeasure. For example, Brazil, India, Turkey, China, and Germany, among other nations, adopted strategies that restricted rather than enhanced the free flow of information. 8 Meanwhile, German, Indian, and French officials, among others, tried to use the Snowden revelations to wrest greater market share from US internet giants (Chander and Le: 2014; US ITC: 2013; Kommerskollegium 2014). Although many states responded with protectionist rhetoric and strategies, not all of these responses were designed to distort trade. Nonetheless, the US Government (and many firms) asserted that many of these strategies, whether censorship, filtering, localization measures and regulations to protect privacy or ensure cyber-stability, were digital protectionism (USITC: 2013, ). For example, the ITC described European privacy rulings and efforts to censor information (such as anti-semitic tweets) as trade barriers. The ITC s new report named some 49 countries as having significant barriers to digital 6 TPP Countries to Discuss Australian Alternative to Data-Flow Proposal, Inside US Trade, 7/5/2012, 7 The Pew Research Center s 2014 Global attitudes survey asked 48,643 respondents in 44 countries what they thought about the American government monitoring communications in the U.S. and other countries. Most of the people polled opposed U.S. eavesdropping and believed the US did not adequately respect human rights online. Pew Research Global Attitudes Project, Global Opposition to U.S. Surveillance and Drones, but Limited Harm to America s Image, 7/14/2014, Also see Shawn Donnan, Digital Trade: Data Protectionism, Financial Times, 8/4/2014, feabdc0.html#axzz39ZS7KRhI 8 Office of the US Trade Representative, 2014 Section 1377 Review on Compliance with Telecommunications Trade Agreements, April 2013, For all reports see, mit=search; Internet and Jurisdiction, Synthesis, 3, July 2013, p. 7. Also see Joji Thomas Philip, Government wants Skype to set up servers in India, 5/20/2013, Mike Butcher, Russia Moves to Ban Online Services that Don t Store Personal Data in Russia, and Jeanette Seiffert, Weighing a Schengen zone for Europe's Internet data, Deutsche Welle, 2/20/2014, all last searched 7/25/

4 trade including Greece, China, Nigeria, and Spain. However, we believe the many diverse responses by governments to the Snowden revelations reveal that policymakers remain divided on what constitutes a barrier to the free flow of information and what counts as legitimate and necessary regulation. Netizens and policymakers alike need more clarity. What do these developments mean for information flows? We argue that there are several reasons why trade negotiators may not be able to set information free. Different values: Nations have different cultural priorities for privacy, transparency; reputation; access to information etc... A global governance gap: The US and the EU have asserted that trade agreements are the best international governance mechanism to make the free flow of information a policy default. But it is not clear that other governments agree that this is a trade issue and that trade rules can clearly delineate exceptions to the free flow of information. Siloed domestic regulation of the Internet: In many countries, including the US, policymakers do not make Internet policies holistically. Policymakers constructing trade policy have little interaction with officials monitoring the Internet to protect national security or officials working to advance internet freedom and digital rights. As a result, in the US and many other countries policies are not designed to maintain the open global Internet. If we want to encourage the free flow of information, we should also be protecting the platform that enables it. Concerns about US internet dominance: Critics assert that the US and EU have pushed for the free flow of information not because these are beneficial policies for netizens, but because such policies benefit their giant Internet companies whose markets are increasingly overseas. 9 Recommendations: Be realistic: Countries will always have different priorities for privacy, free speech, national security etc Hence trade negotiators are unlikely to achieve international harmonization of strategies to advance the open Internet. Policymakers need to develop shared principles for maintaining the One Global Internet and to delineate steps to take when countries do not live up to these principles. Be practical: When they negotiate bilateral, regional or multilateral trade agreements, policymakers should use language to encourage interoperability among signatories privacy and internet security policies. Be proactive by clearly defining barriers to digital trade: Trade policymakers should ask the WTO Secretariat to analyze if domestic policies that restrict information (short of exceptions for national security or public morals) are also barriers to cross-border information flows which can be challenged in a trade dispute. Moreover, policymakers should develop strategies to quantify how such 9 Startup nations: The biggest internet companies, The Economist, 7/12/2014, and Mary Meeker, Internet Trends 2014, Code Conference, 5/28/2014, 4

5 policies affect trade beyond the ITC report. Finally, WTO member states should use the trade policy review process to discuss the trade implications of member state Internet regulations that can distort trade. Get your own house in order: The US should find ways to develop Internet policies in a more coherent manner. The US could create an Internet ombudsman someone on the National Security Council who monitors the effects of trade and other policies for the health of the Internet as a whole. Links: Policy Brief: Can Trade Policy Set Information Free? Op ed- Aaronson, Can Trade policy Set Information Free? VoxEU 12/22/2012http:// Prezi: Questions or Comments: Contact Susan Aaronson at saaronso@gwu.edu 5