property rights protections for technologies that enable e-commerce, such as computers, software, routers, networks, switches, and user interfaces” (Ismail 2020, 6) and thus arguably applies in the digital arena; and the Agreement on Trade Facilitation,43 which speeds the flow of trade through “the simplification, modernization and harmonization of export and import processes”44 and thus has a major impact on digital trade. The WTO consolidated negotiating text on digital trade does not answer the legal questions about how these existing rules apply to digital trade or, for the most part, even try to answer them.
Ideally, the 86 WTO members negotiating on digital trade should try to answer at least some of these questions in the new rules in a digital trade agreement. If these questions are not answered there, they will ultimately be sought in litigation in WTO dispute settlement. Negotiation is always preferable to litigation in clarifying rules and their application. Litigation should be a last resort. What is more, if WTO members decide to leave these unresolved legal issues to litigation, then, between now and then, the current legal uncertainties and, thus, the current economic uncertainties in conducting digital trade will continue.
Modular Obligations in a WTO Digital Trade Agreement Apart from negotiating general rules defining digital trade, making permanent the moratorium on customs duties on digital trade and answering some of the questions about the application of some existing rules to digital trade, WTO members should structure the remainder of the potential obligations in a WTO digital trade agreement as optional obligations in the same modular format as the DEPA and by drawing on the substantive obligations in the DEPA. The agreement should include the “low-hanging fruit”: individual modules containing strong obligations on a list of basic commercial obligations that are necessary to facilitate digital trade and are, in most instances, largely uncontroversial. The agreement should also include the “fruit at the top of the digital tree”: individual modules with initially weaker but potentially ascending obligations on the much more difficult issues in digital trade, which, although highly controversial, cannot be ignored. Within each of these modules, WTO members should be given options to accept a range of new digital obligations incrementally and over different periods of time. At the start, this approach would produce an array of piecemeal obligations in an arrangement that political scientists would call “asymmetrical.” But, over time, with the benefits
of mutual experience and accruing habits of cooperation in dealing with digital trade rules, this initial arrangement could be expected to become more symmetrical; the multicoloured tapestry at the beginning of the WTO digital trade agreement could blend gradually into one colour. What began as a collage of piecemeal plurilateralism could eventually grow into a genuine multilateralism. One risk of attempting to conclude a WTO digital trade agreement among so many countries is that the result could be a “lowest common denominator” agreement. Such a result would not achieve much globally for digital trade, and it could conceivably have the unintended effect of undermining the DEPA and other ambitious bilateral and regional digital trade initiatives. The best way to prevent such a result is to build the broadest and highest possible base of new obligations on which all the participants can agree at the outset while also putting in place an agreed architectural foundation of rules on which WTO members can erect higher beams through progressively higher commitments on the hardest issues over time. The hardest issues in digital trade involve opening up closed economies to a freer flow of more
43 Agreement on Trade Facilitation (entered into force 22 February 2017) [Trade Facilitation Agreement], online: WTO <www.wto.org/english/tratop_e/ tradfa_e/tradfa_e.htm>. 44 Ibid.
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Special Report • James Bacchus
