DigiTrade Digest #112

GLOBAL

CIGI: As Global Trade Goes Digital, Trust Becomes Critical – Burku Kilic

The final months of 2023 were critical for digital trade policy, both in the United States and globally. A major development was the United States’ withdrawal of support for certain provisions in the World Trade Organization’s (WTO’s) Joint Statement Initiative (JSI) talks — a move that drew considerable attention. However, other developments, though less publicized, were equally important. These include the EU-Japan digital trade agreement, which introduced a new exception language, and the G7’s decision in Hiroshima on operationalizing Japan’s “data free flow with trust” (DFFT) proposal at the Organisation for Economic Co-operation and Development (OECD). Collectively, these events are critical for understanding the future of cross-border data flows and digital trade negotiations. They represent foundational elements of a broader global economic policy and are integral to the evolving landscape of digital trade.

Digital trade is fundamental to the architecture of global digital governance, but the relationship is not straightforward. While there are extensive discussions around global digital governance, digital development, data governance and AI policy, discussions about the binding rules that govern the related technologies are less prominent. Digital trade represents a critical intersection where traditional trade rules meet the challenges of the rapidly evolving digital economy. Achieving coherence between trade rules and other crucial digital governance issues such as privacy, security, antitrust, democracy and human rights is a complex task, if not bordering on the impossible. Often overlooked by those working in digital governance due to its complex nature and its roots in service-related rules, digital trade is, in fact, essential to digital governance architecture, regardless of its lack of elite status compared to areas such as tech regulation and AI policy.

Project Syndicate: A Big Defeat for Big Tech – Joseph Stiglitz

Tech companies know that if there is an open, democratic debate about data security, consumers’ concerns about digital safeguards will win out. And while the industry’s lobbyists tried to ensure that no such debate could ever occur, one of their more cynical moves has now been exposed and thwarted.

Politico: Inside the shadowy global battle to tame the world’s most dangerous technology: Can Anyone Control AI? – Mark Scott, Gian Volpicelli, et al.

For the past year, a political fight has been raging around the world, mostly in the shadows, over how — and whether — to control AI. This new digital Great Game is a long way from over. Whoever wins will cement their dominance over Western rules for an era-defining technology. Once these rules are set, they will be almost impossible to rewrite.

For those watching the conversation firsthand, the haggling in the British rain was akin to 19th-century European powers carving up the world.

At the end of the meeting, 29 countries, including China, European Union members, and the United States, signed a voluntary agreement to reduce risks that have climbed the political agenda thanks to the arrival of OpenAI’s ChatGPT.

Al Jazeera: UN approves its first resolution on artificial intelligence

The United Nations General Assembly has unanimously adopted the first global resolution on artificial intelligence to encourage the protection of personal data, the monitoring of AI for risks, and the safeguarding of human rights.

The resolution, sponsored by the United States and co-sponsored by 123 countries, was adopted by consensus with a bang of the gavel and without a vote on Thursday, meaning it has the support of all 193 UN member nations.

WEF: What we can expect for digital public infrastructure in 2024 – Benjami Bertlesen and Ritul Gaur

2023 was pivotal for global digital development. One of the indications of this new development has been the change in the language around digital. For the first time ever, countries reached consensus on a definition of digital public infrastructure (DPI).

DPI, as defined by the G20 New Delhi Leaders’ Declaration, “is a set of shared digital systems that are secure and interoperable, built on open technologies, to deliver equitable access to public and/or private services at a societal scale".

Referenced as the infrastructure of the digital era, these systems are often likened to physical infrastructure. With its open nature, DPI is about moving away from the siloed approach to digital innovation or the winner-takes-all approach that has driven digitalization for the last two decades.

As the global community progresses into 2024 towards the Sustainable Development Goals (SDGs), DPI will continue to present significant opportunities for actors, particularly within local ecosystems.

UN: UN announces multi-stakeholder working groups for Digital Public Infrastructure Safeguards

The United Nations announced six working groups composed of 43 members with diverse expertise, who will be working to develop a safeguards framework on digital public infrastructure (DPI). This framework aims to meet the growing demand in countries to build safe and inclusive DPI that maximizes benefits, while mitigating inherent risks.

AFRICA

The Conversation: Digital trade protocol for Africa: why it matters, what’s in it and what’s still missing – Franziska Sucker

In February 2024, African heads of states adopted a draft protocol to regulate digital trade within the continent. This significant yet challenging course for Africa’s digital economy fits into the broader trade agreement, designed to create a single continental market for free movement of goods, services, capital and people. Franziska Sucker explains the protocol, why it matters and what still needs to be done.

ABC News: US court absolves top tech companies in Congo’s child labor case

A U.S. court has absolved five of America’s biggest tech companies in a case over their alleged support of child labor in cobalt mining in the Democratic Republic of Congo on Tuesday.

The five tech giants — Apple; Alphabet Inc., the parent company of Google; Dell; Microsoft; and Tesla — were accused of "knowingly benefiting from and aiding and abetting the cruel and brutal use of young children in the Democratic Republic of Congo to mine cobalt" in case documents seen by ABC News.

ASIA

Quartz: China wants Microsoft and Intel off its computers – Francisco Velasquez

China has introduced guidelines that stand to gradually eliminate foreign technology from its government computers. As part of the policies, the Beijing government will do away with U.S. microprocessors from Intel and AMD, the Financial Times reported.

Moreover, as the country leans on domestic options, it will look to scrap the use of Microsoft’s Windows operating system and foreign-made database software from its computers as well.

EUROPE

Washington Post: E.U. probes Google, Apple, Meta under its new competition law – Eva Dou

The European Commission has opened investigations into Google, Apple and Meta under a powerful new competition law that went into effect this month, in a signal of Brussels’s intention to move swiftly to rein in Big Tech.

The probes come just days after the three companies gave day-long presentations to European Union officials about the changes they were making to comply with the Digital Markets Act, or DMA, a landmark anti-monopoly law meant to prevent internet giants from using their “gatekeeper” status to foreclose competition in emerging sectors.

The Verge: Experts fear the DMA won’t change the status quo – Jess Weatherbed

The European Union is attempting to loosen the grip that companies like Apple, Microsoft, and Google have over the digital economy. Tech giants targeted by the Digital Markets Act (DMA) — a law passed in 2022 aiming to make the tech industry less monopolistic — are required to remove unfair competitive advantages that have let them dominate their respective markets by March 6th.

But some experts believe the status quo is unlikely to shift. Many of these companies have announced compliance plans in response to the DMA, and for the most part, these changes — as one might expect from a plan crafted by the company itself — are unlikely to result in a loss of power. And then there’s Apple, which appears to be engaging in outright malicious compliance, leaving European developers at a disadvantage.

CER: What to Expect from the Digital Markets Act? – Zach Meyers

On 6 March, Europeans will see changes to large tech firms’ services. Google’s search results will give more prominence to its competitors’ offerings. Consumers will get more choices about how their data is handled. Apple’s closed ecosystem will become more open – allowing users to download apps without using Apple’s App Store. The reason for these changes is that Europe’s long-awaited Digital Markets Act (DMA) will start to bite. The law imposes rules on big firms’ platforms – including operating systems, online marketplaces, messaging services, social media networks, browsers, and digital advertising services – with the somewhat vague goal of making digital markets more ‘contestable’ and ‘fair’. However, the DMA’s elusive objectives make it hard to know whether the law will be a success. The DMA may help solve some problems with digital competition – but it leaves others unresolved and may even create new ones.

Despite the flaws in the Digital Markets Act, it is in large tech firms’ interests to make the law a success. If it fails, large tech firms will probably find themselves facing even tougher regulation.

Politico: 4 ways the EU’s Digital Markets Act is changing your tech

Your phones, your laptops and your social media are changing as powerful tech giants — Alphabet, Amazon, Apple, Bytedance, Meta and Microsoft — have to comply with the European Union’s Digital Markets Act (DMA) from March 7.

The law is designed to open up "core" digital services to make it easier and cheaper for smaller rivals to access data or compete on Big Tech platforms. Here are just some of the changes you’ll see.

NORTH AMERICA

Public Citizen: Consumers Welcome News That USTR Will Not Criticize Allies for Protecting Privacy and Competition

The U.S. Trade Representative’s National Trade Estimate Report on Foreign Trade Barriers (NTE report), due this month, is expected to omit its usual criticism of trade partners’ online privacy and competition regulation.

Global Trade Watch Director Melinda St. Louis issued the following statement in response: “Big Tech lobbyists’ preemptive meltdown over the upcoming NTE report tells you all you need to know: They are accustomed to dictating to USTR their long list of gripes with other countries’ laws, and having those grievances regurgitated in the NTE report without balancing the concerns of workers, consumers, and the public in the U.S. and around the globe…”

CNET: The US Lawsuit Against Apple Raises Questions About iPhone and Android’s Future – Lisa Eadicicco

It’s a debate as old as the smartphone itself: iPhone or Android? You probably made up your mind a long time ago and never looked back. Now a landmark antitrust lawsuit wants to change that, claiming that it should be easier to switch between the world’s two largest mobile operating systems. The complaint, brought by the US Department of Justice and 16 state and district attorneys general, accuses Apple of locking iPhone users into its ecosystem through monopolistic practices that make it hard to leave.

The 88-page lawsuit argues that Apple’s tight grip on its software, hardware and app marketplace makes third-party apps and smartwatches significantly less appealing to iPhone users, therefore stifling innovation and resulting in fewer choices for consumers. Above all else, the complaint alleges these policies entrench iPhone users by imposing barriers when switching to Android.

PBS: TikTok bill faces uncertain fate in the Senate as legislation to regulate tech industry has stalled – Mary Clare Jalonick

While more aggressive than most, TikTok’s extensive lobbying campaign is the latest attempt by the tech industry to head off any new legislation — and it’s a fight the industry usually wins. For years Congress has failed to act on bills that would protect users’ privacy, protect children from online threats, make companies more liable for their content and put loose guardrails around artificial intelligence, among other things.

Some see the TikTok bill as the best chance for now to regulate the tech industry and set a precedent, if a narrow one focused on just one company. President Joe Biden has said he would sign the House bill, which overwhelmingly passed 362-65 this month after a rare 50-0 committee vote moving it to the floor.

But it’s already running into roadblocks in the Senate, where there is little unanimity on the best approach to ensure that China doesn’t access private data from the app’s 170 million U.S. users or influence them through its algorithms.

White House: Executive Order on Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern

Section 1. Policy. It is the policy of the United States to restrict access by countries of concern to Americans’ bulk sensitive personal data and United States Government-related data when such access would pose an unacceptable risk to the national security of the United States. At the same time, the United States continues to support open, global, interoperable, reliable, and secure flows of data across borders, as well as maintaining vital consumer, economic, scientific, and trade relationships that the United States has with other countries.

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