WTO sidelines business in quest for global I-trade rules

The World Trade Organization is to begin work this month on a programme to set rules for the policing of trade on the Internet.

But at the insistence of developing countries, the business community will be kept on the sidelines.

The WTO General Council decided today to start a 10-month work programme, to terminate next July, aimed at setting out exactly how the burgeoning world trade over the Internet can be controlled and given some legal framework.

As a start, the programme will seek to formalise a US proposal that all tariffs and customs duties currently imposed on Internet trade around the world should be frozen, at least until the end of 2000.

This idea found general support among the 124 WTO member countries. But India, Brazil and Egypt led a group of developing countries claiming that, that, while input from the private sector is welcome, any rules must be drafted exclusively by governments.

"We welcome the technical help which the private sector can give us in learning about a field in which we are relative novices, but we do not want the private sector to have a role in drafting binding legislation," Indian delegate Srinivasan Narayanan said.

The WTO is a government body and its decisions are negotiated by governments, but in recent years it has been reaching out to the private sector seeking a closer relationship in making world trade freer.

Internet commerce is one of the fastest growing areas of world trade. According to figures from the Office of the US Trade Representative, some $8 billion worth of trade was done over the Internet last year. By 2003 this figure is expected to exceed $327 billion.

There are no rules governing this trade; the number of Internet users doubles every year.

Coincidentally the decision to start work on a WTO programme on electronic commerce coincided with a meeting, also in Geneva, at which the International Chamber of Commerce called for closer cooperation between business and governments on such matters as electronic commerce.

The ICC said that, for example, it has proposed to the European Commission a set of contract guidelines on data transfer, which it hopes will avoid a threatened dispute between the EU and the US over the EU's new data privacy law, due to come into force in October.

This pending legislation will give governments the right to block exports of personal information to third countries that do not provide "adequate" protection. It risks bringing on a transatlantic dispute since the US traditionally favours industry self regulation rather than strict government controls.

That attitude will be put to the test in the next 10 months of negotiations at the WTO, according to trade officials here. WTO committees will begin going through a detailed work programme starting in October with the aim of producing a draft international agreement for presentation to the organisation's next ministerial meeting in the US in November 1999.

US ambassador Rita Hayes told the meeting that she wants to see the widest possible involvement of the private sector in the drafting process but the prospect of lengthy wranging on this point was assured when Cuba said the WTO ought to initiate a series of in-depth studies of what global legislation on policing the Internet means, before it starts trying to regulate it.

Cuba, for example, is not going to stop imposing customs duties on deals done through the Internet unless it knows what the global implications are, its delegation said.