WTO JSI Participants Shocked by US

World Trade Organization members participating in the plurilateral Joint Statement Initiative negotiations on e-commerce were taken by surprise yesterday by the United States’ announcement it with withdrawing its support for three core proposals – cross-border data flows, the location of computing facilities and source code, according to participants involved in the discussions.

At a meeting of the JSI on digital trade Wednesday, a US official announced that Washington is withdrawing the proposals on the three issues due to on public policy considerations as well as privacy grounds, said participants who asked not to be quoted.

Washington apparently indicated that the withdrawal of its proposals on cross-border data flows, location of computing facilities, and source code would act as a catalyst to finalize an agreement by the WTO’s 13th ministerial conference, which is going to be held in February 2024, said participants preferring not to be quoted.

Several JSI members seemed somewhat surprised by the US announcement, as many industrialized countries – including the three coordinators Singapore, Japan and Australia – threw their weight behind the US proposals.

However, the three coordinators did not comment at the meeting, although Canada and the United Kingdom among others expressed concern over Washington’s withdrawal of the three proposals, while the European Union seemed somewhat equivocal in its comments, said participants.

However, it is China that asked for a detailed explanation from the United States on its withdrawal of the three proposals. Beijing opposed several provisions in the three proposals during the JSI e-commerce negotiations, said participants who preferred not to be quoted.

JSI Ambition Drops

In one stroke, the JSI e-commerce negotiations have now become centered on issues like “enabling electronic commerce” that 1) includes facilitating electronic transactions, 2) electronic transaction frameworks, 3) electronic authentication and electronic signatures, 4) electronic contracts, and “digital trade facilitation and logistics such as paperless trading and single windows data exchange and system interoperability/ unique consignment reference numbers.”

It also could include “openness and electronic commerce that cover customs duties on electronic transmissions, access to internet and data, consumer protection, and privacy among others.”

Interestingly, many of these above issues seem to be largely China-driven proposals, said a participant who asked not to be quoted.

In short, Washington seems to have dealt a blow to its partners in the JSI e-commerce negotiations, who rallied under US leadership since 2017, said participants, who asked not to be quoted. It remains to be seen what the other proponents of the three proposals that the US withdrew will do in the coming days. The next round of JSI e-commerce meetings is scheduled to be held in November.