NEW DELHI: The United States has decided to withdraw its support for an initiative at the World Trade Organisation on free cross-border data flows without localisation, a move that strengthens India’s approach on retaining control over its data.
Washington has decided to withdraw its proposal on digital trade at the global trade body to retain the policy space to regulate Big Tech firms.
The changed position is crucial ahead of a key ministerial meeting of the WTO next year for which digital trade has been identified as one of the “solid deliverables” by senior trade officials of 164-member countries on Tuesday.
The WTO e-commerce negotiations, through a Joint Statement Initiative (JSI), began in 2019 with 90 members trying to reach a consensus on data flows, data localisation, and protection of source code by MC13.
India has opposed the plurilateral initiative and has kept away from the talks. New Delhi backs flexibility in digital policy and has concerns about the potential dominance of a handful of e-commerce players.
India has also expressed apprehensions over the proposed rules favouring foreign companies, especially the Big Tech.
“The new US stand on digital trade validates India’s approach on the subject. India had long ago foreseen potential challenges with unregulated digital trade and thus refrained from participating in the WTO e-commerce negotiations,” said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI).
New Delhi has also not joined the Indo Pacific Economic Framework trade pillar which includes taking onerous commitments on digital trade.
The ecommerce JSI includes the EU, Switzerland, Australia, New Zealand, Japan, Korea, and Canada, and the US’ decision is poised to spark a worldwide reassessment of national e-comm policies, potentially reshaping the future of digital trade agreements, Srivastava said.
Experts also said there are reservations about adopting US standards on artificial intelligence.
The US is reportedly reviewing its approach to trade rules in sensitive areas such as data and source code to balance the right to regulate in public interest and need to address anti competitive behaviour in digital economy.
Source: The Economic Times