Digitrade Digest #21
China is not happy with US plans for digital trade deal, Whatsapp Privacy Policy under scrutiny in EU, Can you trust big tech with your health data?
The Digitrade Digest delivers the latest developments in global digital trade right to your inbox every week. To get the news as it happens, follow us on Twitter @DigiTradeDaily.
WTO
Okonjo-Iweala: Development status at WTO a ‘design problem’
WorldTradeOnline: The U.S., under the Trump administration, proposed adding criteria for WTO members to access special and differential treatment, including membership in the Organization for Economic Cooperation and Development or G20, or classification as a “high income” country by the World Bank. The administration also pushed more advanced economies to forgo such provisions in future negotiations. Some – Brazil and South Korea, for example – pledged to do so while retaining their developing country status.
While the Biden administration has not yet indicated its position on this proposal – or WTO development status more broadly – the concerns about large economies, particularly China, accessing special and differential treatment are largely bipartisan in the U.S.
Okonjo-Iweala did not outline a proposed solution for this issue but argued the WTO must be updated and reformed to address systemic issues.
WTO plans hybrid Public Forum, but MC12’s status remains a question mark
WorldTradeOnline: The two major World Trade Organization gatherings planned for this year in Geneva remain beholden to the pandemic -- the Public Forum, in late September, will be held in a hybrid format, while the status of the ministerial conference, set to begin in late November, is in limbo as countries brace for a potential new wave of COVID-19 cases in the fall.
There are high expectations for the 12th ministerial conference, as the negotiations on fisheries subsidies and a pandemic response are being closely watched in line with the goal of delivering outcomes in December. The Public Forum, meanwhile, is the WTO’s major annual public event, bringing in more than 1,500 participants in previous years. For both, the WTO must adapt: COVID-19 continues to rage in a number of countries -- and could get worse in the coming months as the more contagious Delta variant rampages through unvaccinated areas.
Accordingly, the WTO has decided to hold the Public Forum as a hybrid event, with those in and around Geneva attending in-person events and others participating virtually, according to a WTO official familiar with the plans. In Switzerland, pandemic-related restrictions have eased, allowing gatherings of more than 10,000 people if attendees can show “Covid certificates” proving they are vaccinated, recently tested negative or have recovered from a COVID-19 infection, according to a local news outlet. Inside gatherings that don’t require such certificates can feature a maximum of 1,000 people if seated or 250 people without the seating requirement.
China
Chinese State Media Blasts U.S. Plan for Digital Trade Deal
Bloomberg: Chinese state media outlets have criticized the U.S. over discussions for a digital trade agreement among Indo-Pacific economies, calling them a bid to protect American hegemony and the profits of tech companies.
Agreements signed by the U.S. “invariably serve the U.S.’ bid to defend its hegemony -- a magic word incorporating security, values and interests -- while to the signatory countries, these U.S.-dominated agreements are more like shackles restricting trade and their freedom of cooperation,” China Daily said in an editorial published online Tuesday evening.
China is cracking down on data privacy. That's terrible news for some of its biggest tech companies
CNN: China spent months clipping the wings of some of its tech champions over concerns that they were crowding out the competition. Now Beijing is seizing on data privacy as the next step in a sweeping campaign that threatens to cut companies off from global investment.
The country's extraordinary clampdown on Didi has focused on allegations that the ride-hailing company has mishandled sensitive data about its users in China.
Already, the company that elbowed Uber out of China has been kicked off app stores in the country and warned that it violated laws about data collection. The regulatory pressure has upended its first days as a publicly traded company in New York, with shares plummeting nearly 20% on Tuesday and retreating even more on Wednesday. All told, Didi has shed some $29 billion in market value from its peak
Alibaba, Tencent, ByteDance and 30 other Big Tech firms sign voluntary antitrust ‘self-discipline’ pledge at event
SouthChinaMorningPost: he group of tech companies, which also includes Huawei Technologies Co, Baidu, JD.com and artificial intelligence company iFlyTek, gathered at the China Internet Conference in Beijing on Tuesday and signed the convention on fair competition, consumer protection and strengthening innovation, according to a statement on the Internet Society of China, the conference organiser.
The Internet Platform Operators Anti-Monopoly Self-discipline Convention bars tech companies from engaging in different types of monopolies, including “picking one out of two”, a practice in the e-commerce sector whereby merchants were forced to choose only one platform as their exclusive distribution channel, an issue at the centre of the Alibaba antitrust investigation.
Alibaba, the owner of the South China Morning Post, was fined 18.2 billion yuan (US$2.82 billion) in April for monopolistic behaviours, while online services giant Meituan is still under an antitrust investigation.
US
DEPA and the Path Back to TPP
CSIS: The Biden team knows that keeping TPP at arm’s length puts the administration in an awkward position with Asian allies and partners, who want to see the United States credibly engaging on trade as part of a broader strategy for the region. This is what draws the White House to a digital trade agreement. Accelerated by Covid-19, the digital economy is growing rapidly, yet there are few agreed international rules to govern this space. China, Europe, and others are moving to fill that void, establishing rules and norms on privacy, data management, and internet governance that are often at odds with U.S. interests.
Proponents of a digital trade agreement in the Indo-Pacific argue that it would be easier to negotiate than a comprehensive deal. For one thing, there is a lot of existing work to build on, including the digital rules in TPP and the U.S.-Mexico-Canada Agreement (USMCA), as well as in bilateral deals such as the U.S.-Japan Digital Trade Agreement and the Singapore Australia Digital Economy Agreement. Moreover, as proponents point out, a sectoral deal on digital issues would not require formal approval from the U.S. Congress, since the United States would be making no new market-access concessions.
But there are three potential problems with a digital trade agreement. First, it would likely take significant time to conclude. Trade negotiations always take longer than expected, especially if they involve many diverse parties, complex issues, and high ambition. Second, the domestic politics will be challenging. Aligning business, labor, consumer, and government interests on sensitive digital issues will be difficult, and Congress will take an intense interest in the negotiations. The third, more substantive problem is that trade is only one dimension of the digital economy where rules and norms are in play. There are a range of other issues—from digital inclusivity to ethical standards for artificial intelligence—that arguably cannot or should not be captured in trade agreements.
As it happens, these issues and more are covered in an arrangement already up and running in Asia: the Digital Economy Partnership Agreement (DEPA). A non-binding undertaking to deepen cooperation in the digital economy, DEPA currently brings together Singapore, New Zealand, and Chile (three of the original four TPP members). It involves a dozen “modules” of joint work, including on digital inclusivity, small and medium-sized enterprises (SMEs), cross-border data flows, and cybersecurity. As a platform for discussion of non-binding principles and best practices rather than a formal trade negotiation, DEPA enables experimentation and an ability to address new issues quickly.
US out to counter China in Asia with proposed digital trade deal
SouthChinaMorningPost: White House officials are discussing proposals for a digital trade agreement covering Indo-Pacific economies as the administration seeks ways to check China’s influence in the region, according to people familiar with the plans.
Details of the potential agreement are still being drafted, but the pact could potentially include countries such as Canada, Chile, Japan, Malaysia, Australia, New Zealand and Singapore, according to one of the people, who asked not to be identified because the process is not public.
The deal could set out standards for the digital economy, including rules on the use of data, trade facilitation and electronic customs arrangements, according to another person.
UK
UK’s Truss, Tai to talk trade-distorting practices, digital trade, lamb access
WorldTradeOnline: While then-USTR Robert Lighthizer in December 2020 said the U.S. and the UK were close to a free trade deal, the two sides never reached such an agreement, as the UK had hoped they would. The Biden administration has not said whether it will reopen the talks, while Tai has said she is conducting an “ongoing review” of U.S.-UK trade relations.
During her visit to the U.S. this week, Truss is pursuing “deeper trade ties” that could “encourage the creation of many more,” the British government said on Sunday.
Truss also will speak with “leading Democrats” and the tech industry about how a future U.S.-UK free trade agreement can “set gold-standard rules” on digital trade, the British government said. According to the government, the U.S. and the UK are both world leaders for start-up businesses and “unicorn companies.”
Truss this week also will travel to the West Coast to promote the UK as a “leading investment destination” ahead of the UK government-led Global Investment Summit in October. During her West Coast visit, Truss will meet with businesses and investors to discuss opportunities for growth on both sides of the Atlantic, her government said.
“Together we can build on our credentials as two great innovating nations, and take this opportunity to shape the future of digital trade,” Truss said in a statement.
Big Tech
WhatsApp Faces EU Complaint For ‘Aggressive’ Rollout Of Controversial Privacy Policies
Forbes: Facebook’s WhatsApp is facing complaints from consumer groups Monday after allegedly pressuring users to accept changes to its privacy policy and terms of service, which were delayed earlier this year after millions of users left the app believing the changes made it less secure.
The European Consumer Organisation, or BEUC, alongside eight of its members, filed a complaint with the European Commission and European network of consumer authorities accusing WhatsApp of breaching European consumer rights.
WhatsApp has been “unduly pressuring” users to accept its new terms of use and privacy policy with “persistent, recurrent and intrusive notifications pushing users to accept,” the group wrote.
What’s more, the group said “WhatsApp has failed to explain in plain and intelligible language the nature of the changes” of the new policies, adding that “it is basically impossible” for consumers to understand what accepting these terms would mean.
Health Data
Should we trust big tech with our health data?
BBC: Digital diagnostic tools such as this that use AI, are springing up to help tackle all kinds of health conditions. Such as pattern-recognition technology assisting the detection of cancers, or analysing the brain scans of acute stroke patients.
At the same time, AI software systems can now rapidly sift through multiple people's medical records to help drive the development of new drugs and treatments. This area is more controversial.
"Taking in data... an enormous amount of [research] could theoretically be done more accurately, with better information, prognosis and recommendation, by AI," says Robert Wachter a professor of medicine at the University of California, San Francisco.
He's the author of a best-selling book on the field called the "The Digital Doctor". He says that the UK's National Health Service, with its large and diverse datasets, is especially well-positioned to benefit from this AI healthcare revolution.
"If you combine a very large, very diverse population, with the ability to take data from all over the system and computerise it and make sense of it, I can't see any place that has an advantage over the NHS in doing that."
The Digitrade Digest is a weekly publication of the Digital Rights Program at Public Citizen.