US plans to strengthen cross-border ecommerce, cloud computing WTO rules

The trade rules, which also take into consideration the Trade in Services Agreement (TISA) countries, concern cross-border information flow, removal of localisation requirements for protecting personal data within national borders and agreements on a proper coverage of cloud computing as part of computer and related services, livemint.com reports.

However, several governments are likely to oppose the US move, mainly due to Edward Snowden’s revelations on the US global surveillance and concerns about corporate espionage agendas. Cloud computing has emerged critical to data storage and hosting, processing and certain software services. US companies such as Amazon, Microsoft and International Business Machines, which dominate cloud computing, will be the biggest beneficiaries from having binding legal rules that are yet to be negotiated.

US potential gains from having a multilateral trade deal in which China, India, Brazil, South Africa, Indonesia and other developing countries is significant. As such, trade ministers had authorised their negotiators to prepare a work programme at the ninth ministerial meeting in Bali, Indonesia, to prepare the work programme on ecommerce, an area in which WTO members have remained unsuccessful in arriving at an agreement since 1998.

It calls on WTO members to ensure that existing commitments to computer and related services are robust and clear in terms of coverage, particularly for cloud computing, as they constitute the “building blocks of information-intensive commerce”.

Although cloud computing forms part of what is termed “computer and related services”, local regulations in some countries see it as a telecommunications service. Therefore, there is a need to clarify on the coverage of these services provided via cloud computing to avoid potential negative consequences for one of the fastest growing and important infrastructure service for expanding ecommerce, the US has suggested.