Volume 6, Number 7, Page 2
Electronic Commerce and the WTO
By Noronha Advogados
Electronic commerce has expanded to the point in which it has become imperative that governments and private organizations worldwide begin reflecting on the regulatory infrastructure necessary for its continued development. The Free Trade Area of the Americas (and consequently MERCOSUR) has already created a public/private working-group to deal with this question. Once again, international deliberations and negotiations will have to consider standing World Trade Organization (WTO) Agreements as parameters for the discussion.
Currently, there is no specific forum for issues relating to electronic commerce at the WTO. What does exist are the agreements negotiated during the Uruguay Round which already deal with important aspects of electronic commerce in many cases. Indeed, the international debate should be framed with the distinction between the treatment that the WTO already accords to the issue and the treatment that it should accord.
Perhaps the most important agreement relevant to electronic commerce is the so-called “General Agreement on Trade in Services” (GATS)—the first multilateral agreement to be negotiated on trade in tertiary sector. The GATS covers all services sectors and, in particular, telecommunications - whether basic or value-added.
With GATS, governments have been enabled to negotiate the type of treatment to be accorded to foreign service-providers of telex, telephony, fax or Internet services—all important vehicles of electronic commerce. Through the GATS agreement, governments liberalized not only electronic commerce services but also services that can be increasingly supplied via electronic means, such as professional, financial or entertainment services.
In the negotiations on basic telecommunication services, extended beyond the Uruguay Round, 69 countries agreed to move forward in the liberalization of their markets; of these, 10 countries agreed to liberalize the Internet services market. In addition, the negotiations resulted in the adoption of important regulatory principles such as non-discrimination in the interconnection of foreign ISP’s (Internet Service Providers) to national telecom networks, transparency and competitive safeguards. These commitments, alongside those made by more than half of WTO member countries in sectors already widely commercialized through electronic means, have turned the GATS into a genuine instrument for the liberalization of electronic commerce.
The GATS, however, does not venture into transactions which, with or without electronic commerce, result in the international commerce of physical goods, but only the supplying of a service. The importation of goods via the Internet, for example, is an area already covered by the GATT—the General Agreement on Tariffs and Trade, and not the GATS. Issues relating to taxation or the treatment of a product once imported go beyond the scope of the GATS and have to follow instead the traditional provisions of the GATT Agreement.
Another WTO multilateral agreement that deals with aspects of electronic commerce is the agreement on Trade-Related Intellectual Property Rights (TRIPs). To the extent that electronic commerce involves products protected by intellectual property rights, the TRIPs Agreements affects or can affect such commerce. The clearest examples of this relate to the copyright and trademark protection. The TRIPs Agreement established that computer programs must be protected as literary works and that data bases and other data compilations must also qualify for copyright protection. In the area of trademarks, the TRIPs Agreement defines those that qualify for protection and establishes exclusive measures to prevent use by non-right holders. In particular, the TRIPS Agreement could serve as the basis for the necessary analysis work which will have to be undertaken regarding the relationship between marks and Internet “domain names” (such as “org”, “com”, “onu”, “imf”, etc.). Another issue to be analyzed refers to the current regionally-based registration system, the effect of which is in practice often negated by the speed of electronic commerce.
Finally, an agreement not officially considered a WTO Agreement but ratified in the context of WTO negotiations has important implications for electronic commerce. Titled the Ministerial Declaration on Information Technology Products, the agreement has come to be known as the Information Technology Agreement (ITA). The ITA foresees the elimination of tariff barriers in four phases up to January 1st, 2000, with the exception of only a few items for certain countries. 43 member countries of the WTO accounting for ninety-three percent of world trade in information technology products have signed the agreement in Singapore. Although an important step towards more liberalized IT markets, several important nations including Brazil have yet to sign on.
Noronha Advogados is an international law firm, based in São Paulo, Brazil with offices worldwide.
