JUNE 8, 2019
NEW DELHI, INDIA – Attempts by the US, Japan and Australia to finalize a new trade deal, scrapping curbs on data flows, at the G20 trade ministers’ meeting in Japan this weekend, could prompt a push-back from India and other developing countries.
India’s new trade minister Piyush Goyal will lead the country’s delegation at the two-day G20 trade ministerial summit starting on Saturday in Tsukuba, near Tokyo. Goyal is expected to indicate New Delhi’s stance on major trade issues such as e-commerce and the proposed reforms at the World Trade Organization (WTO).
Trade ministers from several developing countries seem alarmed over concerted efforts by Japan, the US and other major industrialized countries to finalize a highly imbalanced digital and WTO reform agenda, which would severely undermine the “development dimension” in global trade, said a trade minister, requesting anonymity.
India’s new trade minister must provide leadership at the meeting to ensure the development dimension is preserved in global trade, particularly in the digital sector, wherein attempts are being made to weaponize data, the minister said.
Japan wants to advance a ‘Data Free Flow with Trust’ (DFFT) agenda at the G20 meeting to eliminate restrictions on cross-border transfer of information by electronic means, including personal information, and storing data in foreign servers.
In a proposal circulated at WTO on 26 April, Japan said “each member shall allow cross-border transfer of information by electronic means, including personal information, when this activity is (for) conduct of the business of a person of members.”
Japan also wants that “no member country shall require a foreign operator of member countries to use or locate computing facilities in that member’s territory as a condition for conducting business in that territory.”
Japan’s digital agenda is closely aligned with the US’s demands that call for ambitious commitments from India and other developing countries to remove various restrictions, including on cloud-computing.
Japan, Australia and Singapore are the drivers of the e-commerce negotiations at the global trade body.
In sharp contrast, India has signaled its intent to use electronic data of its citizens “for its own development rather than allow its value to be appropriated by others”. India remains concerned about the pitfalls of pursuing an ambitious digital agenda without first addressing the digital divide.
India and South Africa are also concerned over the loss of customs revenue, as well as other fiscal implications, because of the existing moratorium for not levying customs duties on electronic transmissions.
Japan and US are also advancing a common agenda on WTO reforms that seek to bring about “differentiation” among developing countries—something that would end the flexibilities currently available to India, South Africa, Indonesia and other major developing countries.
Ahead of the Tsukuba meeting, US President Donald Trump has stepped up pressure on developing countries to “forego special and differential treatment in current and future WTO negotiations”.
In a letter to trade ministers of developing countries on 26 April, US Trade Representative Robert Lighthizer said: “At the direction of President Trump, I am reaching out to ask you to support this initiative by agreeing to forego special and differential treatment in current and future WTO negotiations.”