3.1 Cross-Border Data and Information Flow

Data are the lifeblood of international trade in the digital age. Global e-commerce trade is characterized by the exchange of data across borders. Data flow enables international trade, connecting individuals and economies. Data are a significant factor in driving the global economy. It has been argued that the current valuable resource in the world now is longer oil but data. Companies such as Facebook, Google, Alibaba, and other tech giants generate billions of dollars from the new resource data (Smith, Reference Smith2017a). For instance, in 2016, Facebook generated $62.23 per user in the United States and Canada and $7.29 per user in the Asia-Pacific region. The global exchange of data through e-commerce has raised many concerns by governments and their citizens about the impacts of the enormous information being collected and used, often without the data subjects’ knowledge. As a result, many countries have restricted cross-border transfer of data, which has affected e-commerce trade in the process (Casalini and López-González, Reference Casalini and López-González2019). It has been argued that cross-border data flow has created more value for economies in the world than the traditional trade flows in goods. In 2015, cross-border data flow contributed about 10% to the global gross domestic product (GDP), which in value terms is about US$8 trillion and roughly US$5.7 trillion higher than the 2014 figure of US$2.3 trillion (Bughin and Lund, Reference Bughin and Lund2017). In this context, this section of the article considers the cross-border data and information flow stances of the United States, the European Union, China, and Japan in negotiations on multilateral e-commerce trade rules at the WTO.

The Chinese position on cross-border data transfer does not tackle the issue. However, the Chinese are skeptical of the proposed free transfer of data across borders. Beijing believes that more consultations and discussions on the issue are needed before bringing it to the WTO e-commerce negotiation. Beijing added that rules on free data flows must reflect members’ security needs (Hufbauer and Lu, Reference Hufbauer and Lu2019). According to China's cybersecurity law, effective in June 2017, article 37 states that operators of critical information infrastructure (CII) must store personal information and other vital data collected locally. Article 37 further required that transmitting information and data abroad must pass through security assessment by China's cyberspace administration bodies and the relevant departments under the State Council.Footnote ⁷ Article 66 of China's cybersecurity law spelled out the punishment for violators of the law. It states that the operator of critical information infrastructure who violates article 37 is punishable by monetary fines and may have their operating license revoked. China's cybersecurity law article 31 defined critical information infrastructure to mean important sectors such as; ‘public communications and information services, energy, transportation, water conservancy, finance, public services, e-government, and other critical information infrastructure. If damaged, lost, or leaked, data could adversely affect the national economy, the people's livelihood, and the public interest and the national security’.Footnote ⁸ Also, a publication by the Cyberspace Administration of China (CAC) in May and June 2019, article 28 of the data security management measures, restrict cross-border transfer or flow of important data. The Chinese believed that if important data leaked, it could seriously jeopardize national security, economic security, social stability, public health and security, and personal information.Footnote ⁹ From the above analysis, it is evident that Beijing's restrictions on the free flow of cross-border data are widely covered. Hence, Beijing can only commit to the proposed cross-border data flows if China is ready to reduce the existing and draft laws on cross-border data flows.

In contrast, the US, EU, and Japan endorsed free cross-border data flow for global e-commerce trade, with exceptions that could restrict cross-border data flow. The Japanese proposal on WTO e-commerce issues is explicitly seeking free cross-border flow of data and other e-commerce related information. Japan argued that the WTO must ensure members reached e-agreements that would promote the free flow of data and information among members. The expectations are that Japan would make commitments on free cross-border flows in its local e-commerce regulations and at the WTO at large. In its proposal, Japan said government policies limiting the cross-border transfer of data could endanger international business activities and negatively impact digital business development.Footnote ¹⁰ They further argued that limiting cross-border data flow would hinder Micro, Small, and Medium Enterprises (MSMEs) in developed and developing economies from participating in the global value chains (GVCs). However, Japan notes that members should be allowed to apply minimal restrictions on cross-border data flows in line with legitimate public policy objectives such as personal data protection and cybersecurity.

The US position on WTO e-commerce negotiations seeks to ensure no restrictions on cross-border data flows. The Americans’ seven-page proposal indicates that they are committed to respecting cross-border restrictions by members if it is necessary to achieve public policy objectives. This includes measures that allow intelligence agencies to uncover terrorists and hackers, provided that the measures have not been applied (a) arbitrarily and (b) higher than is necessary to achieve the objective.Footnote ¹¹ The US proposal on e-commerce to the WTO had similar exceptions on cross-border data flow as in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The Progressive Agreement for Trans-Pacific Partnership is a free trade agreement the US considered joining. The predecessor to the CPTPP is the Trans-Pacific Partnership (TPP). The TPP is touted as the most ambitious trade initiative in scope and the number of countries participating since the collapse of the Doha Round Negotiations. All the provisions on digital trade in the CPTPP were derived from its predecessor. Although the US withdrew its participation in late January 2017, the TPP has been a US-led effort after Washington officially entered the negotiation phase in 2009, which is generally viewed as a core component of the current US ‘pivot’ towards Asia (Gajdos and Bendini, Reference Gajdos and Bendini2013; Dasgupta and Mukhopadhyay, Reference Dasgupta and Mukhopadhyay2017). Similarly, the European Union also proposed free data flow. The European Union respect member states restrictions on cross-border transfer of personal data in the interest of privacy provided the restrictions do not:

1. a) ‘require the use of computing facilities or network elements in the Member's territory for processing, including by imposing the use of computing facilities or network elements that are certified or approved in the territory of the Member;

2. b) requiring the localization of data in the Member's territory for storage or processing;

3. c) prohibiting storage or processing in the territory of other Members;

4. d) making the cross-border transfer of data contingent upon use of computing facilities or network elements in the Member's territory or upon data localization requirements in the Member's territory’.Footnote ¹²

Based on the interpretation of US and EU exceptions on cross-border transfer of data, there could be significant restrictions – in some cases, as extensive as the Chinese protection or privacy controls. Technically, the positions of the WTO behemoths (US, EU, China, and Japan) of e-commerce negotiations on data transfer suggest that the talks will not yield rules that will take away the sovereignty of member countries in deciding which data are of national security importance and must not be transferred to foreign countries without proper assessment. Therefore, the WTO must reconcile the different positions on global e-commerce rules among the US, EU, China, and Japan, and failure to do so will jeopardize the digital economy's future development.

3.2 Consumer Privacy and Data Protection

Consumer privacy is another global e-commerce trade rule on which the proponents for new negotiations on e-commerce are hoping an agreement can be reached among members. Consumer privacy and personal data protection are recognized hot issues in law, policy development, and international trade regulations. Most international agreements and individual countries’ jurisdictions recognized data protection as a fundamental human right and are found in almost all international agreements and relations. In international trade, stakeholders have also recognized that data protection regulations facilitate trade and development in technological innovations.Footnote ¹³ Several multinational and local organizations are developing multiparty data protection agreements in their business dealings with other parties worldwide. Many courts worldwide have data protection and privacy cases as high-profile cases. These are some of the reasons why consumer privacy and data protection are seen as the issues in the e-commerce rules negotiations at the WTO with the highest diverse positions, even among the developed members. All WTO members have recognized that governments may implement safeguards deemed necessary to protect their citizens’ data and privacy.Footnote ¹⁴ On the political agenda, several governments have started drafting new data protection laws and regulations or reviewing the existing ones to ensure that they are up to date with the fast expansion of the digital/information economy. For instance, the US and the EU have re-negotiated a long-standing data protection agreement to ensure they are up to date with the digital economy's current development. Also, the EU, in 2018, replaced their twenty-five-year-old Data Protection Directive with a new regulation known as the General Data Protection Regulation (GDPR) (Hufbauer et al., Reference Hufbauer, Jung, Clyde and Jones2016).

At present, the US and the EU have different positions when interpreting data protection and privacy rules. The EU's position is that data protection and privacy are fundamental human rights, and restrictive measures could be applied to protect personal information crossing borders. The EU's new General Data Protection Regulation (GDPR) is the privacy and data protection rules for all companies operating in the region. Article 2 of the GDPR defined personal data as ‘any information relating to an identified or identifiable natural person’ and defines an identifiable person as ‘one who can be identified, directly or indirectly, in particular by reference to an identification number or one or more specific factors specific to his physical, physiological, mental, economic, cultural or social identity’.Footnote ¹⁵ The EU has the most uncompromising stands on privacy and personal information handling. For instance, in 2018, after the GDPR was implemented, the US tech giant Google was fined €50 million by the French data protection authority for failing to disclose to the users of their services how data were collected across its search engine, Google Maps, and YouTube, to present personalized advertisements (Satariano, Reference Satariano2019). This indicates the extent to which the European Union values its citizens’ privacy and personal data information. The United States’ approach to consumer privacy and data protection is different from the EU, Japan, and China. The US has traditionally used the industry self-regulatory style to protect e-commerce customer privacy and personal data information, such as health records. The US is seeking WTO members to apply restrictive measures on privacy and data protection when necessary and proportionate to privacy risks. Scholars, including Guo (Reference Guo2012), Hufbauer and Lu (Reference Hufbauer and Lu2019), and James (Reference James2019) having argued that the US approach to protecting people using e-commerce and the internet favors tech giants’ commercial interests such as Apple, Facebook, Google, and Amazon. In the EU, the GDPR clearly states the regulations on consumer data; however, that same cannot be found in the US. In the US, privacy and data protection varies from state to state (Gregersen, Reference Gregersen2019).

The Chinese position seems to fall in line with the European Union's position on consumer privacy and data protection. Here China has addressed privacy and data protection on e-commerce activities and wants the WTO to reach an agreement among members that would allow for stringent regulations on the mishandling of personal information by e-commerce and internet firms. The Chinese have set their e-commerce rules on privacy and data protection of consumers to include stringent measures, arguing that member countries can implement restrictive measures to protect their citizens’ privacy and national security (Hufbauer and Lu, Reference Hufbauer and Lu2019). Even though the Chinese are in the early stages of data protection regulation systems, companies are beginning to realize the days of collecting consumers personal information without their knowledge are fading, and many Chinese are beginning to put personal checks on privacy and personal information (Sacks and Laskai, Reference Sacks and Laskai2019). While the EU data protection and consumer privacy are seen as human rights issues, the Chinese focus on the security of their citizens. All companies in China providing services worldwide are to abide by the cybersecurity law on data protection and privacy provisions. According to the cybersecurity law, personal data means ‘information that identifies a natural person either by itself or in combination with other information’. The law requires that companies collecting personal information to disclose to the ‘individual of the purpose, means, and scope of the collection and use of their data, and obtain their consent for the collection’ (Bird, Reference Bird2019).

The Japanese seem to side with the EU and China in the case of privacy data protection. Japan is seeking the WTO to reach an agreement and develop rules that protect consumers’ data information and privacy under the global e-commerce multilateral trade rules pact. The Japanese quest for protecting the personal information of the users of e-commerce dates back to the early 1980s when a research group known as the Private Life Protection group was set up to research into the issues of consumers’ right to privacy. Japan's focus is the processing of personal data information. In 1982, the Japanese government enacted privacy and data protection policies governing personal data collection, disclosure, and processing without e-commerce users’ consent. The new law formulated four sets of principles for personal data handling that companies in the Japanese jurisdiction were expected to abide by (Guo, Reference Guo2012; Wu, Reference Wu2017). The first principle exerts restrictions on private data collection. It requires that firms disclose to e-commerce consumers the data collection methods, and complaints lodging procedures.

Moreover, the second principle addresses the issue of firms taking undue advantage of the processing of the data. This principle requires that e-commerce consumers’ data, collected by firms, should not be used for any purpose other than that for which the data was collected. The third principle is the concern of personal participation. Firms are required to ensure that appropriate measures are in place to make the data owners aware of the existence of the data, its content, and that they are allowed to modify the data when deemed necessary. The final principle is about the proper management of personal data. This principle deems it appropriate for companies to ensure that private personal data are adequately managed and protected from theft, damage, alterations, and unauthorized circulation (Guo, Reference Guo2012). The Japan Times’ (2019) publication suggested that the Japanese Personal Information Protection Commission had plans to revise its private information protection law in 2020.

Given the above divergent positions of the US, EU, Japan, and China on e-commerce rules, the WTO must reach an agreement that reconciles the different interpretations of privacy and data protection among these e-commerce giant economies. There is a big gap concerning consumer privacy between the EU, China, Japan, and the US. The EU, China, and Japan want measures to be put in place to allow members to impose restrictions on the usage of personal data collected by companies in their jurisdictions to protect citizens’ privacy. The US wants members only to apply restrictions on usage proportionate to the risks presented. Given these differing positions in approach to customer privacy, an agreement is as yet far out of reach.

3.3 Continuation of the Moratorium on Customs Duties for Electronic Transmissions

Electronic transmissions refer to the online trade of digitizable products. Technological progress has made it possible for products that were once delivered only in physical form can now to be delivered online. For instance, digital content such as music that used to be provided on floppy disks and CD-ROMs are now provided online. This made it difficult for many customs agencies to impose custom duties. Hence, at the WTO Ministerial Conference held in 1998, many governments supported establishing an international agreement not to impose customs duties on online transactions. Members continued to renew the zero custom duties commitment in subsequent WTO Ministerial Conferences with the most recent one in December 2017 in Buenos Aires. In recent times, members have debated whether the moratorium is still relevant to their economic interests, considering the tax revenue generated from tariffs on electronic transmissions (Lee-Makiyama and Narayanan, Reference Lee-Makiyama and Narayanan2019). All the four WTO behemoths of e-commerce, the US, EU, Japan, and China, favor zero custom duties or tariffs on electronic transmissions.

However, the Chinese only committed to zero tariffs until the WTO's 12th Ministerial Conference in Nur Sultan, Kazakhstan in June 2020. Many scholars interpreted the Chinese position to mean that China would be levying custom duties on electronic transmission unless the WTO Declaration is renewed (Hufbauer and Lu, Reference Hufbauer and Lu2019; James, Reference James2019; Lee-Makiyama and Narayanan, Reference Lee-Makiyama and Narayanan2019). Noticeably, developing countries, including India and South Africa, have argued against the zero tariffs on digital transmissions and viewed the tariffs on digital products and services as a possible source of tax revenue that could be used to support the development needs of developing countries.Footnote ¹⁶ A study conducted by Banga (Reference Banga2019) on the moratorium's revenue implications on electronic transmissions found that developing countries’ potential tariff revenue loss from the moratorium is $10 billion. The Sub-Saharan African countries’ tariff revenue loss is around $2.6 billion, and that of WTO Least Developed Countries (LDCs) is $1.5 billion in 2017. Besides, the study found that developed countries lose only $289 million in tariff revenue in 2017.

Interestingly, the tariff revenue loss to Sub-Saharan countries has doubled the potential tariff loss to the WTO highly developed members, resulting in the suspension of tariffs imposed on digital transmissions. The LDCs’ potential revenue loss from the moratorium of electronic transmissions is more than WTO high-income countries. However, a study by Lee-Makiyama and Narayanan (Reference Lee-Makiyama and Narayanan2019) found that countries would experience negative economic impacts such as higher prices and reduced consumption, which would, in turn, slow GDP growth and shrink tax revenues if they upheld imposing customs duties on electronic transmissions of products and services. They further argued that the opportunity costs of not imposing customs duties would be minimal compared to the economic damages resulting from import tariffs on electronic transmissions. As for the customs duty's moratorium, the gaps between the US, EU, and Japan are very narrow and can easily be breached. However, the Chinese advocated zero tariffs on digital transmissions until the next Ministerial Conference in June 2020. The outlook for e-commerce negotiations is not promising because the Chinese can impede this rule's outcome with other developing countries’ support.

3.4 A Ban on Data Localization

One of the critical issues in e-commerce negotiations WTO members are seeking to address is data localization. According to an increasing body of empirical evidence, data localization requirements may inflict substantial economic costs on multinational firms in the ICT industry. Many empirical studies suggest that data localization diminished productivity, and that the costs outweighed the benefits to the local ICT industry (Cory, Reference Cory2017). With data localization, the Chinese are also skeptical about banning firms’ restrictions on storing data locally. Nonetheless, the Chinese proposal to the WTO on e-commerce negotiations concerning data localization do not address the issue of foreign-owned firms' server location. By contrast, the United States wants e-commerce trade rules that would not require companies, that rely on cloud computing for delivering products and services via the internet, to establish physical infrastructure and centers in the countries they seek to operate. The US argument is that this would create unnecessary, avoidable costs for the companies and the consumers alike. The European Union takes an identical position; however, a paragraph in the European Union proposal further elaborated beyond server localization: Building on existing WTO obligations, disciplines addressing all forms of data localization, including local presence, localization of computer servers, and local content requirements, subject to appropriate public policy exceptions.

Furthermore, contrary to China's position, the Japanese seek to put a ban on data localization as a precondition that must be met in order to conduct business in WTO member states. Japan argues that data are an essential part of business activities, and they need to make strategic decisions, effect considering costs, risks, and efficiency of operations. Hence, a mandatory requirement for server localization would hinder companies from entering the WTO member state market due to the increased cost and risk. Therefore, the Japanese encourage the WTO to reach an agreement requiring data server localization if it is to achieve a legitimate public policy objective.Footnote ¹⁷ In the current negotiation for new rules on e-commerce at the WTO, the Chinese position is shared by developing countries such as Brazil, India, Indonesia, and Russia, and the developed member countries also support the US, EU, and Japan position. Reconciling the divide between the positions of the developed and developing countries on data localization is not promising. Countries in favor of data localization advanced their argument on three basic arguments. The first argument concerns sovereignty and government functions; storing personal and economic data of their citizens in another country will cause them to lose their sovereignty. They argue that data are a resource that can promote economic development and state functions. The second argument points out that data localization would help local industries profit economically from local infrastructure construction. Finally, countries that support data localization believe that local data hosting can improve privacy and protection by ensuring that local regulations apply to the company's data collection and use.

3.5 A Ban on Source/Software Codes Transfer

Before looking at the US, EU, China, and Japan's various positions concerning source codes, we must discuss the basic concepts to understand source codes. These concepts include open-source software (OSS) and proprietary software. The term source code represents a set of instructions written by a programmer in creating software using a programming language. These instructions are usually both human-readable instructions and computer-readable (Singh et al., Reference Singh, Bansal and Jha2015). Open-source software is the type of software where parties other than the software developers can access the software's source code. The programmer releases the source code and the software that runs with the binary files on the buyer's computers to other parties to use and modify them freely. On the other hand, proprietary software source codes are only accessible to the software developers and are not freely accessible to buyers. These source codes are sometimes considered as trade secrets of the software developers (Neeraj, Reference Neeraj2017). Therefore, the open-source software comes with minimal expense to the user, while proprietary software is associated with huge costs. Also, another difference between the two is the administration. Proprietary software has reasonable administrative assistance to the users by providing regular updates, while the open-source software provides administrative services through blogs and discussion forums. Several scholars have associated the transfer of source codes with the US–China trade frictions in which firms, especially the tech behemoth from the US, have accused the Chinese of forcefully requiring them to transfer technology as a precondition in order to operate in the Chinese market (Cory, Reference Cory2019; James, Reference James2019).

Prohibiting transfer of source codes is another proposed e-commerce trade rule on which the WTO must reach a consensus among its members. Again, the Chinese proposal has not addressed this issue and China is not expected to make commitments. However, the United States, the European Union, and Japan advocate for a total prohibition of forced transfer of source codes from companies as a precondition for conducting e-commerce business in WTO member states (Stelly, Reference Stelly2019). Nonetheless, the US, EU, and Japan have exceptions to the prohibition of forced transfer of source codes but which differ slightly. The US recognizes the significance of compliance with regulatory body requirements, which could lead to company concern regarding loss of trade secrets through unauthorized disclosure. On the other, the EU gave out three exceptions to the prohibition of forced transfer of codes, including: (1) as a remedy to violation of competition law, (2) to protect and enforce intellectual property rights, and (3) to address security concerns.Footnote ¹⁸ The Japanese advocate for an exception to comply with disclosure of a software source code to member governments if it is necessary to achieve a public policy objective but not a precondition to conduct business in WTO member economies. The gap between the US, EU, and Japan are easy to be bridged, but the Chinese have a divergent position from the US, EU, and Japan, which is not a good outlook for e-commerce talks.

3.6 Internet Taxes

Digital taxes are among the prevalent issues of importance that WTO members seek to address as part of the e-commerce negotiations. Digital taxes form an important part of many WTO members’ development agendas. In the past few years, member countries have raised many concerns about foreign firms practices of tax avoidance and creating unfair competitions operating in the digital economy. Thus, based on these concerns, over 40 WTO member economies, including the European Union, have taken measures to prevent tax avoidance practices and have collected more revenue from a vast array of multinational corporations (MNCs) from the US operating in the various EU member countries (Cheng and Brandi, Reference Cheng and Brandi2019). For instance, in 2016, the European Union ordered an American company (Apple) to pay huge sums of dollars in back taxes to Ireland, which suggested as part of the EU initiatives to curb the practice of using low-tax countries of foreign corporations to cover full disclosure of income to avoid taxes (Hufbauer and Lu, Reference Hufbauer and (Lucy) Lu2018). Also, aside from the tax avoidance practices of the US MNC's, the EU has, over the years, complained of anti-competitive practices of US tech giants such as Facebook and Google, among others. As a result, on 20 March 2019, the EU fined the tech giant Google €1.49 million for breaching anti-trust rules by using abusive online advertizing in the bloc.Footnote ¹⁹ Tax avoidance practices of MNCs has become an issue of great importance, and international organizations, including the Organization for Economic Cooperation and Development (OECD), in response to a call from the both developed and developing member countries of WTO, launched a project called Base Erosion and Profit Shifting (BEPS) aiming to combat tax avoidance and to better the standards of the global tax rules (Hufbauer and Lu, Reference Hufbauer and Lu2019).

For digital taxes, there is a big gap between the positions of the US and the EU. However, China's position on digital taxation is unknown, and China has also not shown commitment. In the same way, the Japanese propose a ban on internet taxes. The US opposes digital taxation. The US is hoping that the WTO will reach an agreement that would restrain members from taxing digital products. However, the EU proposed for fair taxation of the digital economy. Following the OECD project, in March 2018, the EU proposed two digital taxes, namely: the digital services tax (DST) and the digital profits tax (DPT). The taxes apply only to tech firms with worldwide revenue totaling €750 million and EU revenues of €50 million (Jessop, Reference Jessop2018). Scholars have argued that DST and the DPT tax laws that target the revenue and profits of large technology firms that are arguably attributable to European Union countries and could damage the growth ability of these digital companies (Bunn, Reference Bunn2018; Hufbauer and Lu, Reference Hufbauer and (Lucy) Lu2018). Bunn (Reference Bunn2018) argued that the DST tax is inefficient and anti-growth for digital companies because it is taxed on revenue generated from online interactions within the EU member states. Thus, the tax ignores transaction costs associated with revenue generation, and digital companies would be taxed whether they were making profits or losses.

Similarly, Hufbauer and Lu (Reference Hufbauer and (Lucy) Lu2018) suggested that the revenue thresholds would significantly discriminate against US MNCs, such as Google and Facebook, while failing to capture many local EU firms into the proposed 3% digital services tax. The digital profits tax is another issue that industry experts suggest is a bad idea for the European Union because of the belief that it is ultimately the final consumer of the digital products that would be liable to tax. Many authors argued that, in the long run, the digital tax targeting a particular sector of the economy would have consequences on the entire economy because it is not feasible to separate the digital economy from the rest of the economy for tax purposes (Bunn, Reference Bunn2018; Hufbauer and Lu, Reference Hufbauer and (Lucy) Lu2018; Jessop, Reference Jessop2018). According to the International Monetary Fund (IMF) (2019), it is imperative to have trade rules for e-commerce activities and they must be done at the multilateral stage rather than through unilateral legislation, and described the tax as a duplicative of the OECD digital tax discussions expected to conclude in mid-2021. The United States has since opposed the EU digital proposal and argued that it is a violation of tax treaties and other EU agreements as a WTO member. The US has also taken internal measures against the unilateral EU proposed digital tax by activating Section 301 on 10 July 2019 to investigate the tax (Hufbauer and Lu, Reference Hufbauer and (Lucy) Lu2018).

There is a considerable gap between the US and the EU positions concerning internet taxation. The US demands rules that ban WTO members from imposing taxes on internet usage, while the EU seeks to reach an agreement that allows for internet taxation. The Chinese position is unknown and they are not ready to make commitments, while the Japanese are also seeking a ban on internet taxation. This is a challenging gap to reconcile, and the prospects of reaching a consensus at the current e-commerce talk are not promising.

3.7 Open Internet Access

Open internet access is another crucial area of e-commerce trade rule negotiation on which WTO member economies seek to reach an agreement. The internet is a core tool for e-commerce activities. E-commerce needs the internet to operate; hence, without the internet, e-commerce will not exist. Many WTO member states, particularly the US, have raised concerns about China's internet access restrictions. Against this background, this section of the paper discusses the US, EU, Japan, and China proposals on open internet access.

The EU is pushing for multilateral rules at the WTO on the trade-related aspects of e-commerce that ensure members’ legal systems adhere to open internet access. The EU believes that the internet should be open and accessible for any legitimate business activities and that members should not block a website for economic and/or political gains (South Centre, 2017b). A systematic review by South Centre (2017a) of the proposed rules of the US, EU, and Japan on promoting open internet access, suggests there should be no gap between the three proposals. The US also advocates for the WTO to reach agreement that would ban unlawful internet accessibility restrictions on legitimate commercial activities. However, both the US and the EU advocate against websites that promote hate, pornographic, or terrorist activities and have encouraged websites hosts such as Google, YouTube, and Facebook to block a website with such content in the public interest (South Centre, 2017a).

On the other hand, China advocates for state control and internet sovereignty, citing internal security. The Chinese believe that the virtual world and the real world co-exist. and to that end the same political values, ideals, and standards should be applied. As a result, the Chinese government has invested significant sums of money into technological development to monitor the internet. They illustrated this by launching the Great Firewall (GFW). The GFW's critical role is to regulate the domestic internet, by filtering content and removing pages with sensitive content, and block websites that publish sensitive issues. The GFW is just like a physical wall that creates barriers to hinder movement and the exchange of information. Internet content providers Google, Facebook, Twitter, and Dropbox, among others, are all inaccessible to a Chinese internet user. However, the Chinese government supports domestic tech giants such as Baidu, the Chinese version of Google, WeChat, a Chinese version of social media platforms that fully cooperate with the government authorities (Maags, Reference Maags2019). Reaching an agreement on open internet access is far out of reach even though the US, EU, and Japan are advocating for free access to the internet; in reality, there is shadow regulation by big companies that own critical social media platforms that often work with these prominent WTO members.