The WTO’s 13^th Ministerial Conference, held in Abu Dhabi a few weeks ago, concentrated several key discussions on the future of digital governance. The debates occurred far from the public eye and with civil society reporting patent violations of their rights during the negotiations. During the occasion, new commitments were adopted to limit government action on technology regulation, contrary to the demand to review measures that threaten the digital sovereignty of countries, especially in the Global South.

A pact for inequality

While international agencies and organizations are discussing mechanisms to build a digital future based on rights, some States – often allied to the corporate interests of their local industry – use the international trade agenda to limit the scope and regulatory possibilities of other countries. One of the best-known examples of this type of strategy is the moratorium on customs duties.

Adopted by the WTO in 1998, this measure prohibits governments from levying customs duties on “electronic transmissions”. Although there is no clear definition of ‘electronic transmissions’, the moratorium has resulted in the impossibility of taxing transnational electronic trade in services and products, which includes the purchase of books, movies, etc.

As the volume and value of such transactions have escalated to stratospheric levels in more than two decades since its adoption, the measure has become a constraint to the possibility of equitable distribution of the benefits of the digital economy. According to a document presented in 2021 by the governments of India and South Africa, “a re-consideration of the moratorium is critical for developing countries, inter alia, to preserve policy space to regulate imports, generate revenue through a simple and direct instrument such as customs duties and achieve digital industrialization”.

In the words of the South Centre think tank, a public policy research organization that gathers several countries of the Global South: “with no clarity on the definition of electronic transmissions and thereby on the scope of the moratorium, its continuation can lead to substantive tariff revenue losses for developing and least developed countries in the future”.

Expectations for that the moratorium was not renewed during the 13^th Ministerial Conference were high since the United States revised some of its positions on e-commerce. Still, the measure was renewed until the next WTO Ministerial Conference, or until March 31, 2024, whichever comes first, says the final decision.

Far beyond commerce

The moratorium on electronic transmissions is just one example of the impacts that trade agreements can have on the autonomy of States in terms of technology policy and its consequences. However, it is far from being the only matter of concern about digital rights.

Another point of attention are the discussions around the Joint Initiative on e-commerce (JSI). The declaration, initially promoted by the U.S. government, has been under discussion since 2017 and aims to generate broader regulation on e-commerce. The novelty is that the JSI seeks to address issues that go far beyond trade, such as international data transfer, data localization, access to source codes, and net neutrality, among others.

An additional problem with the “joint initiatives” mechanism is that they are negotiations initiated by a group of countries, open to the participation of all, but without the need to follow WTO protocols on consensus-based decisions. For this reason, countries such as India, Namibia, and South Africa have questioned its legality.

The decision of the United States in October 2023 to change some of its positions in the WTO referred precisely to the withdrawal of support for the text under discussion. On that occasion, the U.S. government stated that they are in a review phase of their position on the issue, intending to have more “regulatory space”. In other words, they expect to regulate internally issues that were previously discussed in the field of foreign policy and trade agreements, often with the United States pressing for global agreements that favor their industry.

This decision was welcomed by members of civil society, who for years have been calling for a transparent discussion of the negative impacts of the text on developing countries. As noted in a letter signed by more than 60 organizations, the U.S. government “has now realized that these provisions close the political space for essential regulation”.

According to facilitators from Australia, Japan, and Singapore, there was significant progress on the JSI during the last Ministerial Conference and an “agreement is expected” by mid-2024.

For whose benefit?

Founded in 1995, the WTO’s stated primary objective is to “help its members use trade as a means to raise living standards, create jobs and improve people’s lives”. But trade discussions do not only take place within the WTO. On the contrary, countless regional or bilateral agreements on international trade replicate and deepen the aforementioned challenges, advancing crucial issues in the digital rights agenda.

Despite the “slogan” of promoting “the opening of trade for the benefit of all”, more than two decades of debates on e-commerce reveal a policy that, in practice, privileges the benefit of the few. In other words, the benefit of the usual ones. The strategy of maintaining the dispersion of agreements through negotiations in the WTO, regional forums, or international negotiations makes it very difficult to advance an agenda that resists these barriers. With many countries in Latin America seeking to advance an agenda of digital sovereignty and regulate technology companies and artificial intelligence, the first step is to put an end to the impositions of trade agreements.

The second step, as the UN Secretary-General has already pointed out, is to find ways to harness digital technologies for the benefit of all. Still in his words, we need to foster “governance arrangements that prevent their misuse” and “shape innovation in ways that reflect universal human values and protect the planet”. Through international cooperation that goes beyond trade, such as through the Global Digital Compact and other processes, we have a unique – and perhaps the last – opportunity to advance this vision on the various fronts of ongoing global policy debates. It is therefore essential that Latin American governments not only commit to such an agenda but also advocate for greater transparency and openness in trade negotiations, starting with discussions at the national level.