Digitrade Digest #50
Indo Pacific Economic Framework gaining ground , EU's landmark law to take on big tech and more.....
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Indo Pacific Economic Framework
SOMETHING’S COMING ON IPEF
Political Pro: The Biden administration appears close to an announcement of some sort on its proposed Indo-Pacific Economic Framework, but exactly what’s around the bend is a mystery for now.
Senate Foreign Relations Chair Bob Menendez stoked curiosity on the topic on Tuesday, telling your host, “I can’t give you the exact timeframe” for an announcement, “but I think it’ll be sooner rather than later.”
“I think the administration wants to achieve an opening gambit as soon as possible,” the New Jersey Democrat continued. “When they get to that point, it won’t be with a singular nation. I think it’ll be with a group.”
So, what are we talking about here? The details of that “opening gambit” are still unclear. But it will likely be an unveiling of a group of nations that commit to working out the details of the IPEF framework in later discussions.
So, an agreement to keep talking, more or less. And it’s likely to contain at least a few Southeast Asian nations, Menendez said, that have expressed interest in joining the pact, even though they want to see more ambitious trade provisions.
One potential forum could be a rescheduled summit for the Association of Southeast Asian Nations, which was supposed to take place last week in Washington but had to be moved.
White House Asia Coordinator Kurt Campbell implored ASEAN nations to attend the summit during an appearance at the Center for Strategic and International Studies on Tuesday, saying it would be the “greatest gift” they could give the U.S. after the scheduling mishap.
Focus on digital: Raising digital standards around issues like privacy, security and cross-border data flows across more parts of Southeast Asia has been a top priority for countries shaping the terms of the economic framework, U.S. and Singaporean officials said Tuesday.
Some countries such as Singapore are already meeting many of the framework’s digital obligations, but the economic framework is the Biden administration’s “main approach” for expanding those standards across the region, Deputy USTR Sarah Bianchi said at the same conference, co-hosted by CSIS and the U.S.-ASEAN Business Council.
Bringing others to the table: Some countries may not be willing to sign on to the framework’s “trade pillar,” which will house the digital commitments, Bianchi acknowledged. But the framework is designed to allow countries to pick and choose the pillars they want to join — meaning a country could make commitments around clean energy or supply chain resilience, for instance, without making commitments on digital trade or labor standards.
“Those are conversations that we will get into as we get underway,” Bianchi said. “And right now what we’re looking for is to have a big, inclusive launch and figure out where all these negotiations lead.”
Singapore’s ambassador to the U.S., Ashok Mirpuri, said some Southeast Asian nations will initially find parts of the agreement, such as energy decarbonization, more appealing than others, like the digital provisions. But interest in the broader agreement can build as negotiations begin.
“You can always say the standards they are offering are not high enough, the incentives are not good enough,” he said. “But we’re really at that very early stage of the process. Let’s have it going as soon as we can and then start to do real work in the process.”
Timeline: Bianchi said the administration is “trying to land it as soon as we can” but echoed earlier remarks from Campbell that “developments in the world have made all of these issues challenging.” She said the rollout would be coming in a matter of “weeks, not months,” the same answer she gave in early February.
Across the Pacific: IPEF was top of the agenda as Tai met with Singapore Prime Minister Lee Hsien Loong on Tuesday in the Southeast Asian city-state. Tai emphasized American commitment to the region and highlighted the U.S.’s “desire to work with Indo-Pacific partners, including Singapore, on establishing a high-ambition framework that will advance resilience, inclusion, sustainability, and the interests of our respective workers and middle classes,” according to a readout of the meeting.
S. Korea "positively" mulling joining US-proposed economic framework: minister
The Korea Herald: South Korea's top economic policymaker said Friday the government is "positively" considering joining a new US-proposed economic framework in the Indo-Pacific region.
The United States is seeking to launch the Indo-Pacific Economic Framework (IPEF) to seek deeper cooperation with partner nations on a wide range of economic and trade issues, including digital trade and supply chains. The move is widely seen as aimed at countering China amid an intensifying Sino-US rivalry.
"Discussions about the IPEF are expected to be fleshed out and pick up the pace," Finance Minister Hong Nam-ki told a government meeting on economic security and strategy.
"The government plans to discuss its stance and plan over the issue in a positive manner," he added.
Hong also said the country plans to submit an official application to join a mega Asia-Pacific free trade agreement before President Moon Jae-in's single, five-year term ends in early May.
South Korea is seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) involving 11 nations as part of efforts to diversify its export portfolio.
The minister said the incoming government of President-elect Yoon Suk-yeol is expected to deal with negotiations for the accession to the CPTPP.
India
Digital trade, government procurement covered under India-UAE CEPA
Fortune India: The digital trade chapter covers areas like cyber security, electronic payments, digital invoicing, cross border flow of information, personal data protection, online consumer protection, digital identifies, authentication, paperless trading and domestic electronic transactions framework. The current practice of not imposing customs duties on electronic transmissions between the two countries will continue.
On personal data protection, India-UAE CEPA says that both the countries recognise the economic and social benefits of protecting the personal data of persons who conduct or engage in electronic transactions and the contribution that this makes to enhancing consumer confidence in digital trade. It says that the both countries shall endeavour to adopt or maintain a legal framework that provides for the protection of the personal data of the users of digital trade. It also says that in the development of any legal framework for the protection of personal data, each party shall endeavour to take into account principles and guidelines of relevant international organisations. Further, it says that both countries shall endeavour to publish information on the personal data protection it provides to users, including how individuals can pursue remedies and businesses can comply with any legal requirements.
The government procurement chapter talks of national treatment and non-discrimination.
The agreement calls for promoting electronic information flows across borders subject to the laws and regulatory frameworks of respective countries. It also talks about open data and says that the parties should ensure that such open data is allowed to be searched, retrieved, used, reused, and redistributed freely by the public, to the maximum extent possible.
EU
E.U. Takes Aim at Big Tech’s Power With Landmark Digital Act
The NewYorkTimes: The law, called the Digital Markets Act, is the most sweeping piece of digital policy since the bloc put the world’s toughest rules to protect people’s online data into effect in 2018. The legislation is aimed at stopping the largest tech platforms from using their interlocking services and considerable resources to box in users and squash emerging rivals, creating room for new entrants and fostering more competition.
What that means practically is that companies like Google will no longer be able to collect data from different services to offer targeted ads without users’ consent and that Apple may have to allow alternatives to its App Store on iPhones and iPads. Violators of the law, which will take effect as early as later this year, could face penalties of up to 20 percent of their global revenue — which could reach into the tens of billions of dollars — for repeat offenses.
The Digital Markets Act is part of a one-two punch by European regulators. As early as next month, the European Union is expected to reach an agreement on a law that would force social media companies such as Meta, the owner of Facebook and Instagram, to police their platforms more aggressively.
With these actions, Europe is cementing its leadership as the most assertive regulator of tech companies such as Apple, Google, Amazon, Meta and Microsoft. European standards are often adopted worldwide, and the latest legislation further raises the bar by potentially bringing the companies under a new era of oversight — just like health care, transportation and banking industries.
“Faced with big online platforms behaving like they were ‘too big to care,’ Europe has put its foot down,” said Thierry Breton, one of the top digital officials in the European Commission. “We are putting an end to the so-called Wild West dominating our information space. A new framework that can become a reference for democracies worldwide.”
Privacy concerns should not block EU’s attempts to curb big tech power
Financial Times: Four years ago, milestone GDPR legislation on the protection of data came into effect. Now the EU is in the final stages of writing history again, with a new law that seeks to clarify competition responsibilities for big tech firms up front. The aim of the Digital Markets Act (DMA) is to prevent these gatekeeper companies from abusing their market dominance and not simply bring them to court for antitrust violations. Instead of breaking up monopolistic companies, the DMA would open them up, says French Digital Minister Cedric O. Amazon, for example, would not be able to use its insights into buyer activities to best position its own brands on its own platform. Users would be able to seamlessly send messages to friends on other platforms, and Apple would have to allow access to rival app stores. Default settings would no longer create lock-ins, giving internet users much-needed freedom. It should come as no surprise that major tech firms are criticising the new rules, which aim to increase their responsibilities and decrease their power. It is also unsurprising that the DMA has become one of the most heavily lobbied pieces of legislation ever produced in Brussels. Facebook, Google, Microsoft and Apple alone spent about €20mn last year in an attempt to influence it. Lobbyists quickly latched on to privacy as a possible argument. What is cleverer, after all, than using one key EU achievement against another? It can be difficult to distinguish between the lobbying noise and the civil liberties alarm. But while there are details to be spelt out about combining security and competition, there are also clear indicators of how that may be achieved. WhatsApp’s chief Will Cathcart, whose company has implemented end-to-end encryption between users, foresees problems, as do others with a less direct stake in the competition laws and a better record in privacy protections. They worry the well-intended focus on interoperability might have security downsides. When the consumer can choose their messaging platform, they should then be able to interact with all other platforms, in the way email does. Interoperability would lower the cost and hassle of switching, helping competition and consumer choice. The question is whether these proposed obligations might clash with those of end-to-end encryption. But this is not a mission impossible. When an internet user has deliberately chosen a messaging platform with the highest encryption standards — to be certain of confidentiality or to protect a source — the fact that their message would be shared over to another platform of a friend or colleague, should not change the protection of their data. The DMA foresees that API’s must have the same levels of data protection for remote and internal users, according to Matrix, an open-source project fostering secure communications, which also proposes “bridges” for encrypted data. Additionally, it is useful to remember that competition and privacy protections go two ways. Monopolists can more easily downgrade data protection standards, as Facebook has, because consumers have fewer alternatives. With more competition, the chances are that better privacy protection becomes a competitive advantage. Even if the US lacks a federal data protection law, its courts are currently hearing several cases challenging the harmful relationship between privacy and antitrust. Federal Trade Commission chair Lina Khan called the new DMA legislation a “landmark proposal to promote fair access to markets controlled by digital gatekeepers”. She recognises the implications of corporate access to information for privacy and security, in addition to competition. It is exactly that combination that the EU now needs to tackle. The DMA’s details are still being worked out, and methods of enforcement will also be critical. There is wriggle room between the political agreement reached, and the final text after experts fine-tune it. It will only be possible to seriously weigh all concerns against this last iteration, which should be available in the next few weeks. Yet the discussion about interoperability and encryption — or between the GDPR and DMA — already hints at a major challenge the EU is still to face. After the DMA, the Digital Services Act, the AI Act, and the Data Act will follow, to ensure more countervailing powers to balance those of technology companies. For EU lawmakers and regulators with ambitions to curb the power of big tech, ensuring that these different laws also work well together will be the next big hurdle.
The Digitrade Digest is a weekly publication of the Digital Rights Program at Public Citizen.