The three facilitators comprising Japan, Australia and Singapore issued a “facilitators’ text” on Monday that seeks to find “a landing zone that bridges the different approaches reflected in existing proposals.”
A corrigendum issued under the title “facilitators’ text”, seen by WTD, says it is finalized by a “small group on data flows and localization of computing facilities.”
Further, it says the text is circulated “to capture, on a best-effort on a best-effort basis, the comments and suggestions made by Members.” According to the facilitators, it “is not intended to prejudge any outcome of the final text nor intended to preclude any Member from raising comments and drafting suggestions in the future. Members can also refer to the existing proposals on the data discipline to complement ongoing and future discussions.”
It is clear that if the United States had not withdrawn its hardline positions on the issues of cross-border data flows and location of computing facilities in which it sought all prohibitions/restrictions be removed, the latest text by the facilitators may not have surfaced, said a person who asked not to be quoted.
In the fourth version of the revised text issued on August 4, the United States along with Australia, Canada, Japan, Korea, Singapore and the United Kingdom among others sought that “No [party/Member] shall prohibit or restrict the cross-border transfer of information, including personal information, by electronic means, if this activity is for the conduct of the business of a covered person.”
China and Brazil, in contrast, proposed that [unless otherwise provided for under its laws or regulations,][each/Each] [ Party/Member]shall allow the cross-border transfer of information by electronic means when this activity is for the conduct of the business activity of a covered person.”
According to the draft text (Inf/Ecom/62/Rev.4) the European Union, which has strong data protection laws, proposed the following: “The [Parties/Members] are committed to ensuring cross-border data flows to facilitate data flows shall not be restricted by:
(a) Requiring the use of computing facilities or network elements in the [Party/Member’s ] territory for processing, including by imposing the use of computing facilities or network elements that are certified or approved in the territory of the Party;
(b) Requiring the localization of data in the [Party’s Member’s ] territory for storage or processing;
(c) Prohibiting storage or processing in territory of other [Parties/Members];
(d) Making the cross-border data contingent upon use of computing facilities or network elements in the [Party’s/Member’s] territory or upon localization requirements in the [Party’s/Member’s] territory.]
Against this backdrop, the latest corrigendum issued by the three facilitators substantially changes the contours of the much-claimed ambitious JSI digital trade agreement. It substantially lowers the level of ambition by allowing parties to arrive at an agreement on seemingly best endeavor provisions.
The corrigendum on cross-border data flows says:
1. The [Parties/Members] [recognize the importance of removing / are committed to removing / shall remove] prohibitions and restrictions on the cross-border transfer of [information/data] to facilitate trade in the digital economy. To that end, [unless otherwise provided for under their laws or regulations,] [no [Party/Member] shall restrict cross-border transfer of INF/ECOM/83 [information/data] [if this activity is for the conduct of the business of a covered person] [including] /cross-border transfer of information shall not be restricted] by [a [Party/Member]];
(a) requiring the use of computing facilities or network elements in the [Party's/Member's] territory for processing, including by imposing the use of computing facilities or network elements that are certified or approved in the [Party's/Member's] territory;
(b) requiring the localization of [information/data] in the [Party's/Member's] territory for storage or processing;
(c) prohibiting the storage or processing in the territory of another [Party/Member];
or,
(d) making the cross-border transfer of [information/data] contingent upon use of computing facilities or network elements in the [Party's/Member's] territory or upon localization requirements in the [Party's/Member's] territory.
Further, it allows members to adopt or maintain a measure that is inconsistent with or contains elements that are inconsistent with the above provisions. It says in paragraph six:
“Nothing in this Article shall prevent a [Party/Member] from adopting or maintaining a measure which is inconsistent with, or contains elements which are inconsistent with, paragraph 5, provided that:
(e) the measure has, or the relevant elements of the measure have, the [primary] purpose of achieving the protection of personal information data;
(f) the [Party's/Member's] [law/measure] [comprehensively] provide(s) how personal information data can lawfully flow across borders;
(g) the [Party's/Member's] [law/measure] provides for an instrument or a set of instruments enabling cross-border transfer of [information/data], formulated in [clear / transparent] and objective terms; and
(h) such an instrument, or such a set of instruments in its totality, is not applied in an arbitrary or [unjustifiably] discriminatory manner [where like conditions prevail], or in such a manner as to nullify the benefits accruing to any [Party/Member] under any of subparagraphs (a) to (d) of paragraph 5 (which was cited above).”
Weakened Cross-Border Data Flows Provisions
In addition, according to the corrigendum, the provisions for cross-border data flows are further weakened in the facilitators’ text. Paragraph seven of the facilitators’ text it says:
“Without prejudice to paragraph 6, nothing in this Article shall prevent a [Party/Member] from adopting or maintaining a measure inconsistent with paragraph 5 to achieve a legitimate public policy objective [FN], provided that the measure:
(I) is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; and,
(j) does not impose restrictions on transfers of information greater than are [required/necessary] to achieve the objective."
The last paragraph says: “[Paragraph 5 shall not prevent a developing or least-developed [Party/Member] from adopting or maintaining any measure that it considers appropriate to regulate the cross-border transfer of [information/data], including personal data, by electronic means, or the use or location of computing facilities in its territory. For greater certainty, if a [Party/Member] invokes this paragraph in a dispute, the body or mechanism hearing the matter shall find that it applies.]
[FN For greater certainty, legitimate public policy objectives include the protection or promotion of the rights, interests, duties and responsibilities of indigenous peoples.]”
Agreement for its name-sake only
Clearly, the facilitators seem to have not only lowered the level of ambition but made it commercially unpalatable, said an e-commerce negotiator, who asked not to be quoted.
“The question is do you want an agreement with substantial commercial benefits or just an agreement for the agreement’s sake,” said an e-commerce negotiator, who asked not to be quoted.
After the United States pulled out the three major contentious issues of cross-border data flows, location of computer facilities and source code, the facilitators took the cue to lower the overall level of ambition and settle for a best-endeavor deal, the negotiator said.
Surprisingly, Japan, which apparently was in favor of a substantial agreement on the lines of what Washington originally sought, seems to have settled for a deal that is largely advanced by Australia and Singapore, the negotiator said.
Comments
No comments on this item Please log in to comment by clicking here