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USTR elaborates the Two Dozen Digital Rules of Club TPP
http://editors.cis-india.org/a2k/blogs/ustr-elaborates-the-two-dozen-digital-rules-of-club-tpp
<b>Members of the recently concluded Trans-Pacific Partnership (TPP) are now scrounging the world to include more countries in its fold. The Digital 2 Dozen(D2D) is a bite-sized document which packs the TPP into 24 key tenets. The D2D, aggressively championed by the US as the path forward for the global digital economy poses some critical questions for India: first, how will India position itself against US pressure in the larger scheme of US-India foreign relations, and how much is it willing to concede its policies in the name of trade; second, how will reduced barriers and establishment of a level field for Indian and foreign IT and internet companies alike, hurt Indian consumers and businesses?
This week, the Deputy US Trade Representative Ambassador Robert Holleyman discussed the Digital 2 Dozen document with Ambassador Shyam Saran (Chairman, RIS). The exchange was moderated by Samir Saran (Observer Research Foundation). I attended the discussion and this post is a summary of the key points.</b>
<p><em><br /></em></p>
<p><em>For a background on the data protection
and privacy aspects of the Trans-Pacific Partnership agreement and
Digital 2 Dozen principles, please read CIS' piece <a href="http://cis-india.org/internet-governance/blog/tpp-and-d2-implications-for-data-protection-and-digital-privacy">here</a>. </em></p>
<h2><strong>Ambassador Robert
Holleyman </strong></h2>
<p><a class="external-link" href="http://https://ustr.gov/about-us/biographies-key-officials/ambassador-robert-holleyman-deputy-ustr">Ambassador Holleyman</a>
opened with stating that trade agreements are created to build a
foundation for national policies. He added that the D2D is not merely
a tech D2D, rather it is based on the premise that our economies have
digitised to a large extent, and hence, the TPP contains provisions on
agriculture as well. The TPP tries to combat barriers to the growth of
digital economy, and the D2D provides the most modern and the
highest standard of such provisions. The D2D tenets can be divided
into three categories: </p>
<p align="JUSTIFY">1. Provisions to ensure
the internet is open and safe, and an effective channel for trade and
services.</p>
<p align="JUSTIFY">2. Provisions to combat
protectionist and restrictive provisions of member nations. The D2D
talks about eliminating rules that seek to make foreign companies
localise their data by building expensive data centers in every
market they seek to serve. Further, TPP also seeks
to prevent countries from 'forcing' foreign companies from transferring their
technologies and production processes as a pre-condition for doing
business there.</p>
<p align="JUSTIFY">3. Provisions on IPRs to
'build a level playing field' in order to 'protect' innovators and
creators in the digital space. </p>
<p align="JUSTIFY" class="callout"><strong>“ ...The TPP rules on
enforcement of IPRs are strong and balanced and embody the TRIPs
standards. For instance, countries are required to to impose criminal
penalties on trade-secret violations such as cyberhacking.”</strong></p>
<p align="JUSTIFY">He added:</p>
<p class="callout"><strong>“We believe these rules are the foundation for next 20 years of the digital economy. To make sure that India does not fall behind we want to work with India (for the adoption of these rules). We're encouraged by the new government's programmes and the PM's engagement with US and silicon valley leaders.<br /> <br />We encourage India to level the playing field. To that end the USTR is working with the Indian Ministries of Communications and IT, and Commerce and Industry to exchange practices for building open markets. We want to work together in eliminating localisation policies given that how a lot of IT companies have established investment heavy R&D centers in India, and they rely heavily on the free flow of cross border data. Imposition of localisation of data would be detrimental in this age of cloud-computing. We're aware that the Indian government is reviewing its policies on cloud-computing and encryption, and we encourage the government to consider the implications of the such policies carefully, for India is also a leader in global IT and would be a potential framework setter at that.”</strong></p>
<p align="JUSTIFY">The D2D also endorses
elimination of custom duties on ICT products, and the Ambassador
added that the US was very pleased to see India deposit their
instrument of accession on the Trade Facilitation Agreement with the
WTO. The US has been pleased
to see India's ratcheting up its norms for IPR protection. He
mentioned that the two countries held a successful copyright workshop
earlier this year, and later this year they plan to conduct a
workshop on trade secret protection. The D2D also says that
conformity assessment procedures are excessive and should be
eliminated. This emerges from US' IT industries concerns on the
compulsory registration of ICT products that required re-testing in
Indian labs.</p>
<p align="JUSTIFY">He made a case for
opening up Indian markets by quoting a study which revealed that the
Indian market for ICT products is worth 65bn dollars, while the
global market stands at 2 trillion dollars. So while India could
leverage its exports to meet the demand, the question remains if we
want to foster a market based on openness. In his opinion, openness
has enabled the IT sector in India to access other markets. However,
he observed that countries were erecting barriers to this openness by
restricting the cross-border free-flow of data, particularly and this
is where the TPP assumes importance. The real challenge now is for
the US and India to prepare their own version the the D2D.</p>
<p align="JUSTIFY">On the route of D2D, the
Ambassador was largely optimistic:</p>
<p align="JUSTIFY" class="callout"><strong>“The TPP has Obama's
backing and the US Congress should ratify the deal before the
elections. Other TPP members have already initiated steps to ratify
the deal in their countries. For phase II, 13 non-member countries
have already approached the US to be a part of TPP since the deal was
concluded.”</strong></p>
<h2>Ambassador Shyam Saran </h2>
<p align="JUSTIFY">He began by stating that
the India-US engagement on digital economy would become an area of
close cooperation for US-India relationship. A few years ago the US
pharma was unhappy with Indian generics, and this tussle left a bad
taste between the countries, and also spilled over into the political
side. Disagreements on several issues such as IPR, WTO subjects, etc
still persist, despite some developments reflecting mutual trust and
confidence (for instance the counter-terrorism initiative).</p>
<p align="JUSTIFY">He welcomed potential
cooperation in the digital field, because that would dispel the
negativity and prevailing perception of India and US not being on the
same page. The one area that has been a shaky pillar is the trade and
economic relationship. In his frank opinion, the Indian establishment
perceives USTR's outlook on trade issues as quite adversarial. He was mindful of a
developing India's unique needs and priorities: </p>
<p align="JUSTIFY" class="callout"><strong>“In regard to the
differences between India and US on trade and economic issues, it is
not surprising because we must also be mindful of the reality- we are
a developing country, wheras the US is highly developed and
technologically advances - thus, we need different lenses for each.
This is something we need to address, (remember how we acknowledged
and fixed this in our defence relationship re the nuclear deal). The
lesson that I draw is that here is an area critical to both
countries' growth, and we need to address this differential
aspect...”</strong></p>
<p align="JUSTIFY">According to him, right
now India has an ambiguous position on the TPP. Holleyman had
mentioned that the deal was based on an open platform, and Shyam
pointed out that it was in fact conceived through closed door
negotiations. It is common knowledge that rules at TPP were arrived
at through complex negotiations between 13 countries, which surely
was a process of complex give and takes. At this stage, it was not
possible for India to look at one chapter and agree to meet the “gold
standards” set in it.</p>
<p align="JUSTIFY">According to him, D2D was
important to the US solely in terms of trade benefits for its own
businesses. He said that to convince the Indian government, the USTR
will have to first convince the Indian IT industry the D2D benefits-
which he was skeptical of. The reason was that this 'opportunity'
comes across as a clear case of double-standards when the US talks
about lowering barriers in India, and on the other hand is increasing
barriers on its own shores (several pending bills in the US Congress
indicate this). Similarly, immigration troubles for the Indian talent
pool have only gone up. The other aspect he
raised was on localisation and IPRs. He said that while stands on
these issues were being formulated, it should also be expected that
the government will take into account concerns of privacy and
security. In the US itself, the US treasury has said in regard to
banking and financial transactions localisation may be necessary. </p>
<p align="JUSTIFY">He closed by offering an
alternative route to the US – one of working with India as a
partner in the Digital Economy instead of fixating on barriers and/or
nitpicking on Indian legislations. This would be a more sustainable
way to capitalise on India's growth potential and align with its
digital future. </p>
<h2>Samir Saran </h2>
<p align="JUSTIFY">Samir responded to
the discussants by offering his thoughts (and questions) on D2D and
the digital economy, broadly: </p>
<p class="callout"><strong>“...Can the digital
space be a new space for a partnership? Three stories are important
in the context of a trade document: <br />First is dominated by
access – India is seeing 6 million new internet users every month
and most of them are on low-cost mobile devices. Can a trading
normative process allow to continue this phenomenon as it is?<br />Second is opportunity –
India is already responding to investment flows. In terms of privacy
and security – if India believes that it can become the digital
infrastructure hub, it will need to develop world-class encryption
tools. Similarly in terms of
free-flow of information, when Obama and PM met they endorsed the
same. So it is a step back from localisation, anyway. So you see
India changing positions to make the atmosphere more business
conducive.<br />Third is security – How
can you make free-flow of data uni-directional? Why is it that you
want data to flow unfettered when it creates value, but you are
creating barriers for giving data for security purposes?...</strong></p>
<p class="callout"><strong>...Further, in a phase
when the mood worldwide is in favour of de-globalisation, will
hyperglobalisation through FTAs work?...”</strong></p>
<p align="JUSTIFY">Finally, Holleyman
acknowledged that historically India and US have had differences, but
with the digital economy perhaps they can forge some approaches. He
accepted that some of the points were written squarely for the US
tech sector, but he hoped that the other 11 partners of the TPP will
come out with what the D2D means to them. </p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/ustr-elaborates-the-two-dozen-digital-rules-of-club-tpp'>http://editors.cis-india.org/a2k/blogs/ustr-elaborates-the-two-dozen-digital-rules-of-club-tpp</a>
</p>
No publishersinhaFree Trade AgreementIPRTrans Pacific PartnershipAccess to Knowledge2016-07-29T08:00:00ZBlog Entry