Digital trade and data Contents

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5Work at the WTO and G7

The G7

86.This year, the UK holds the presidency of the G7 group of nations and, in June, held the G7 Summit. The UK’s presidency of the G7 is an opportunity for the UK to show global leadership in digital trade.161 The CBI called for the UK to use the presidency to pursue digital and data rules at the WTO, with particular reference to making the WTO moratorium—the practice of WTO members not imposing customs duties on electronic transmissions—permanent.162 The Minister of State for Trade Policy told us that the Government would be promoting the UK’s proposals at the WTO through its G7 trade track, and that promoting digital trade is “one of the main themes” of the UK’s presidency of the G7.163 In May 2021, G7 Trade Ministers announced their intention to adopt G7 Digital Trade Principles at the Trade Ministers’ Meeting in October 2021.164

The WTO

87.Digital trade is also regulated by commitments made through the WTO, most notably by the General Agreement on Trade in Services (GATS). Professor David Collins stated that the “UK unquestionably needs to pursue digital trade leadership at the World Trade Organization”, with the CBI describing a “narrow window of opportunity to unblock progress in Geneva” created by the new US administration and WTO Director-General.165

88.We heard differing opinions on whether the rules in GATS remain suitable to govern digital trade. Hosuk Lee-Makiyama explained that, while newer agreements than GATS provide more “specificity” in relation to digital trade, “the general commitments we have undertaken in GATS are still valid” in that they explain and address cross-border data flows without using the terminology of cross-border data flows.166 However, we also heard criticisms of GATS, with the Professional and Business Services Council referring to it as failing to adequately “cater for more specific issues thrown up by digital trade”, given that thirty years has passed since it was negotiated.167 The British Software Alliance called for GATS to be updated to include digital provisions, and Professor David Collins suggested that an “Annex on Digital Trade [ … ] be included as a schedule to GATS.”168

89.The Minister of State for Trade Policy described the WTO as “not really [having] kept up to date”, noting that “things in the WTO rarely move quickly”.169 He expressed a strong interest in making sure WTO rules relating to digital trade worked well.

90.The UK has an important opportunity to show leadership in multilateral negotiations at the WTO, complemented by its presidency of the G7 this year. We encourage the Government to continue to take the lead in negotiations at the WTO, and to consider opportunities to reform and update GATS.

Joint Statement Initiative on E-Commerce

91.A group of 86 countries, including the UK, is currently negotiating rules to regulate digital trade at the plurilateral level through the Joint Statement Initiative (JSI) on e-commerce. The British Software Alliance highlighted it as an opportunity for the countries to “negotiate a new rulebook for e-commerce”, with the Global Data Alliance describing the negotiations as holding “promise of common and forward-looking data transfers rules.”170

92.Which? stated that the “stakes [for the negotiations] are high for participating countries to design rules that put consumer concerns centrally and protect their rights in addition to ensuring that the digital economy thrives.”171 UNISON, noting that the UK’s WTO text is not public, described the Government’s approach as a “rush to agree a new WTO digital trade agreement without UK domestic consultation”.172 Ultimately, they called for “the government [to] make a public commitment that it will be supporting the underpinning of digital privacy protections as fundamental and human rights like the EU in the e-commerce negotiations.”173

93.The Minister of State for Trade Policy said that we “can see the proposals that [the Government] submitted” for the JSI negotiations. He told us that the proposals cover a range of areas, including opposing customs duties on e-transactions, personal information protection, cross-border data transfers, and source code amongst other things.174

94.While a commitment to plurilateralism, particularly at the WTO level, is welcome, it is crucial that the Government also commits to transparency and parliamentary scrutiny in relation to WTO negotiations. We recognise that there is a tension between maintaining negotiating strategies and making information on proposals public, but urge greater transparency in this area. We note that the EU has published some of its proposals for the Joint Statement Initiative. We recommend the Government publishes both its objectives for the Joint Statement Initiative and its current proposals to allow for greater transparency and scrutiny.

WTO moratorium on customs duties on electronic transmissions

95.In addition to GATS, the WTO moratorium on customs duties on electronic transmissions is a key agreement at the WTO level which regulates digital trade. It is currently being considered for renewal by the WTO. We heard a considerable amount of support for its renewal.175 The UKTPO outlined some of the criticisms made against the moratorium—that it results in a loss of tariff revenue and has adverse impacts on industrialisation—but ultimately dismissed them, describing the concerns as “largely unfounded”, “potentially exaggerated” or not being addressed by an end to the moratorium.176 Some business representatives also called for the moratorium to be made permanent rather than being subject to renewal.177 We also heard that the definition of the term “electronic transmissions” for the purposes of the moratorium are is currently unclear, with techUK calling for the term to be given a broad definition to include the content of transmissions in addition to the transmissions themselves.178

96.DIT told us that it is a “strong advocate for the WTO moratorium on customs duties on electronic transmissions” and opposes the imposition of customs duties on electronic transactions. It also highlighted that it had included prohibiting customs duties on customs duties in its negotiating objectives in addition to its work at the WTO.179

97.We heard support for making the WTO’s moratorium on customs duties on electronic transmissions permanent. We commend the Government for its incorporation of this objective in its FTA negotiations, but emphasise the importance of continuing efforts to make the moratorium permanent at the WTO.