From the abstract:

E-commerce offers economy-wide benefits. World Trade Organization (WTO) members recognized the benefits e-commerce offers and have developed a work program to facilitate the development of e-commerce. However, WTO efforts to facilitate e-commerce have stalled, leading to a slower than anticipated progress. As fundamental differences continue to stall progress in the WTO’s program on e-commerce, the United States concluded a free trade agreement with Jordan. This agreement was the first ever to incorporate explicit provisions on e-commerce. This article analyzes how existing trade agreements have dealt with e-commerce. The article gives an overview of the situation in WTO. The article then examines the e-commerce provisions in the United States-Jordan Free Trade Agreement (US-JO FTA) and how the parties have tackled the obstacles that stalled the WTO work on e-commerce. It concludes that the US-JO FTA approach regarding e-commerce did not move beyond what the WTO has already done. It is argued that although there are specific provisions dealing with e-commerce in the FTA, the parties left many loopholes to be filled.

The abstract is available here.

KORUS has more in-depth treatment on e-commerce than was in the DR-CAFTA agrement, including specific sections on Electronic Signatures, Online Consumer Protection, a set of principles on internet use and access, and cross border information flows. A few key points are interesting:

Electronic Signatures

KORUS Article 15.4 specifically addresses Electronic Authentication and Electronic Signatures. It contains an outright prohibition from adopting or keeping legislation that:

15.4.1(a) prohibit parties to an electronic transaction from mutually determining the appropriate authentication methods for that transaction;

15.4.1(b) prevent parties from having the opportunity to establish before judicial or administrative authorities that their electronic transaction complies with any legal requirements with respect to authentication; or

15.4.1(c) deny a signature legal validity solely on the basis that the signature is in electronic form.

My first impression is that this may be related to problems, often found in civil law societies, with requirements for certain formalities in contracts and the conflict with performing these acts electronically.

Online Consumer Protection KORUS 15.5

This is a very general statement about the importance of consumer protection in the online environment, and states that their respective consumer protection agencies ” shall endeavor to cooperate with each other” on enforcement issues. My guess is that phishing and spam are the key drivers for the inclusion of this language.

DR-CAFTA 14.5 also has a cooperation section, though it is broader, and includes cooperation on IP and electronic government (14.5(b).

Principles on access to and use of the internet for Electronic Commerce KORUS 15.7

This is pretty interesting, so I include it in full:

To support the development and growth of electronic commerce to facilitate trade, each Party recognizes that consumers in its territory should be able to:

(a) access and use services and digital products of their choice, unless prohibited by the Party’s domestic law;

(b) run applications and services of their choice, subject to the needs
of law enforcement;

(c) connect their choice of devices to the Internet, provided such devices do not harm the network and are not prohibited by domestic law; and

(d) have the benefit of competition among network providers, application and service providers, and content providers

All of this is with the soft and probably non-binding “should be able to” standard.

Cross border information flows

15.8 of KORUS includes this language:

In recognition of the importance of the free flow of information to facilitating trade and acknowledging the importance of protecting personal information, the Parties shall endeavor to refrain from imposing or maintaining unnecessary barriers to information flows across borders.

DR-CAFTA has a similar provision in 14.5(c):

(c) working to maintain cross-border flows of information as an essential element in fostering a vibrant environment for electronic commerce;

My first impression is that the KORUS language seems to address more closely cross border privacy issues, much like the EU-US sharing of data situation. It also contains a stronger (though not that strong) standard – “shall endeavor to refrain from imposing”.

I wonder if e-commerce will play a greater role in future agreements by the US — more to follow on this analysis. Comments are warmly welcomed.

• Intellectual Property and its impact on the field, including domain name issues and peer-to-peer file sharing;
• Internet governance;
• Taxation and e-payments;
• Contracting electronically;
• Security and reliability issues, including spam and DDOS attacks;
• Authentication issues and digital signatures;
• Consumer protection issues;
• Content regulation issues, including defamation and pornography;
• Competition law aspects of e-commerce related businesses;
• Human rights issues, in particular privacy;
• Jurisdictional issues and the internet;
• Telecoms issues, such as net neutrality and the interplay between telecoms policy and the law.

However, from the trade lawyer perspective, e-commerce tends to be look at in terms of:

• Does e-commerce fit (if at all) within GATT, GATS, or both agreements?
• How do trade policies involving e-commerce fit within the policy of technology neutrality in the WTO?
• Is an internet transaction Mode 1 (travelling abroad) or Mode 2 (cross-border) within GATS?
• How does ‘likeness’ fit in with providing e-commerce services? Does this conflict with policy of technology neutrality?
• In particular with telecoms and ISP issues, what are the competition law aspects and how do they fit in with GATT and GATS?
• Are digitizable products goods or services?
• What is the relationship between e-commerce and MFN and national treatment obligations?

The first set, the IT lawyer perspective, doesn’t really make it the sections on ‘e-commerce’ in these agreements. It is true, however, that issues such as telecoms policy and IP do get addressed in FTAs. Taxation issues tend to be addressed in tax treaties and not in trade agreements. As to human rights issues, whether or not these can (or should) be addressed in the trade context is an area of some research.

This leaves issues such as:

• Internet governance;
• Contracting electronically;
• Security and reliability issues, including spam and DDOS attacks;
• Authentication issues and digital signatures;
• Consumer protection issues;
• Content regulation issues, including defamation and pornography;
• Jurisdictional issues and the internet.

The above ‘e-commerce’ issues are generally not addressed (at least not directly) in these agreements. Though it falls outside of the scope of the core goal of this project, looking at the possibility of addressing these issues in FTAs is interesting. This kind of study would by necessity have to look at the institutional aspects of regulating in these areas — I’m thinking of the forum shift from WIPO to the WTO that happened in relation to IP.

Could we see issues such as the Proposed Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters be brought up within the trade context?

Tool link.

L E Nagle, E-Commerce in Latin America: Legal and Business Challenges for Developing Enterprise (2001) 50 Am. U. L. Rev. 859.

I fear, however, that since it was published in 2001 that most of the facts and figures about the layout of e-commerce in Latin America are a bit dated. However the ideas about the challenges to e-commerce in the region generally, and DR-CAFTA members specifically, should still apply.

This section caught my eye in particular:

Generally, Latin Americans prefer to buy products at the store, where they can personally inspect them. A JP Morgan report notes that, “many upper-class shoppers (who would have access to the Internet) prefer the service and attention that a personal visit affords.” Chileans, like many Latin Americans, “prefer to go to the malls where they can meet with friends, enjoy their families, eat, and window shop.” Latin America never has had a “catalog culture” as exists in the United States. Indeed, the tactile pleasure of sampling merchandise and negotiating a price is an important component of the socio-economic fabric. “For the most part, Latinos like the idea of personal relationships and buying goods from people they know.” Moreover, the loyalty of sophisticated Latin Americans to brand names, and a preference for buying brand names, presents a significant obstacle to companies that will rely only on the Internet to sell goods and otherwise have no traditional “brick and mortar” market identity.

The social-cultural differences that create obstacles to e-commerce are another important aspect of encouraging development in this sector. These barriers are much less ‘trade related’ however, and I think that it would be too far a stretch to see these addressed directly in trade agreements.

But what about my earlier post on FTAs as exporting a certain culture? Could broader FTAs (or treaties) encourage the development of e-commerce while tackling problems like these?

On this last point, I am reminded of the European Union, and its principle of the ‘free movement of goods and services’ which has led to any citizen of a European country being able to relocate and live and work in any other EU country. This principle has led to many things, but mainly it has led, in my opinion, to greater cultural understanding and exchange between EU nations.

Perhaps programmes and treaties that concentrate on the free movement of people between Latin American states and the United States could encourage changes on both ends and foster greater commerce and development in the region. I’d be interested to see any economic studies done on the impact of lowering immigration and travel controls between nations.

I’m also interested if you can recommend any newer legal studies in the area of e-commerce in Latin America. I fear, however, that at least in the legal journal article area that this field became somewhat unfashionable post dotcom crash in 2001.
Other articles that I’ve been reading:

J B Willingham, Electronic Commerce and the Free Trade Area of the Americas (2000) 6 NAFTA: L. & Bus. Rev. Am. 483.

R M Kossick, “The Emerging Disharmony of Electronic Commerce Legislation in Latin America” (2001) 9 Tul. J. Int’l & Comp. L. 387.

A D Mitchell, “Towards Compatibility: The Future of Electronic Commerce Within the Global Trading System” Journal of International Economic Law (2001) 683-723.

To me, Chapter Fourteen of DR-CAFTA reads pretty weak on the issues that are commonly associated with e-commerce, such as internet governance, security and reliability issues, content regulation and so on.

Recognizing the global nature of electronic commerce, the Parties affirm the importance of: (a) working together to overcome obstacles encountered by small and medium enterprises in using electronic commerce;… [Link]

Though in the USTR’s summary of the agreement, the parts in the chapter regarding customs duties and non-discrimination are ‘a major advance over previous international understandings on this subject.’ [PDF Link].

But if you step back and realise that increasing levels of internet access depend on bridging the digital divide, then the telecom section of DR-CAFTA becomes quite important to the e-Commerce equation. Now it remains to be seen whether deregulation of the telecoms markets in these countries lowers prices and encourages consumer uptake. I mention consumers, because I imagine that the business-to-business (b2b) side of e-commerce might already be getting what it needs. Deregulation, in my opinion, would probably have the most impact on consumer-oriented e-commerce (c2c and (b2c). I’ll post if I find sources discussing this issue.
Surprisingly, the first effects of telecoms deregulation might actually be m-commerce — commerce based over mobile phones. The Economist has a mention of the blooming of m-commerce in Africa. [Link]. The article mentions a new firm, backed with private investments and aid money that:

[is] a simple sort of eBay for agricultural products across a dozen countries in west Africa. It lets buyers and sellers indicate what they are after and their contact information, which is sent to all relevant subscribers as an SMS text message in one of four languages.

This is a whole other topic in itself — entrepreneurship focused on development. But looking at the mobile phone industry and m-commerce is an interesting avenue to explore in these treaties.

Over at the Adam Smith blog, commenting on the same story, they write that this is an example of entrepreneurial:

[s]earchers [who] are more likely to be fiddling about with what is available and seeing what can be used to do what.

How the deregulation takes place, and the opportunities that it creates (assuming that it does so), will be interesting to watch. Just because e-commerce evolved a certain way in the places like Europe and the United States does not mean that this is the way it has to happen in Latin America.