Home / Politics / Policy /  India critical of US proposal on e-commerce, cloud computing

Geneva: India has expressed strong reservations about a “prescriptive" proposal submitted by the US at the World Trade Organization (WTO) to expand the work programme on e-commerce. The programme calls for framing trade rules for cross-border data flows, removing localization requirements for protecting personal data within national borders, and agreeing to proper coverage of cloud computing as part of computer and related services.

More than three months ago, the US circulated a proposal seeking a robust work programme on e-commerce as one of its main priorities. “Cloud computing is a critical component for any e-commerce and it is essential trade commitments reflect a high degree of openness for this service," the US had argued in its proposal.

American companies such as Inc., Microsoft Corp., and International Business Machines Corp. (IBM) have the lion’s share in cloud computing. For some time now, the US has been working hard on binding legal rules for cloud computing, in which its companies have a major share.

Last Wednesday, the US’s proposal on e-commerce came up for discussion at the WTO’s Council for Trade in Services (CTS). A US official argued that Washington wants to focus on “trade-related issues of e-commerce", including on issues of cloud computing and finding a balance between privacy and cross-border data flows.

The US also maintained that its proposal is not designed to be included in the post-Bali work programme for immediate negotiations, according to officials familiar with the meeting.

However, members delivered “mixed" responses to the US proposal. Several industrialized countries in the European Union, Canada and Australia, along with Mexico, Chile and South Korea, strongly supported the US proposal.

In a sharp response, developing countries such as India, China, Brazil, Ecuador and Argentina expressed concerns over the underlying goals of the US proposal to expand the e-commerce agenda despite the lack of mandate from the members at this juncture.

India said the US proposal was already rejected in 2011 and that its proposal is “prescriptive". “We don’t want negotiations at this juncture," an Indian official said, according to people familiar with the meeting.

New Delhi maintained that it is interested in having a conceptual exploratory and experience-sharing dialogue without leading to any market-access negotiations.

China said that while it would welcome the proposal on e-commerce from the US which recognizes the importance of cross-border flows, it is concerned that Washington had imposed severe restrictions on localization of services and data flows.

Brazil agreed with India that there is a mismatch between what the US had proposed in its paper and what it is now claiming in its call for a dialogue.

In the face of sharp divide, the chair of the CTS, ambassador Martin Eyjolfsson from Iceland, said he would hold more consultations to resolve the differences among members for pursuing the dialogue.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) on Tuesday cautioned about “asymmetric access to major market places and e-commerce platforms may accentuate existing imbalances in e-commerce trade".

In its Information Economy Report 2015, the UNCTAD said “merchants in many developing countries do not enjoy equal access to these marketplaces" because of lack of access to e-commerce platforms used by Amazon and eBay, among others.

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