Implications of emerging technology regulations on digital trade negotiations and development (Center for Economic and Policy Research)

Arguments

Latin America needs to develop its own vision of digital industrialization

Supporting facts:

• Sofia highlighted the need for a regional vision before negotiating with other regions

Topics: Digital Industrialization, Mercosur, Regional Integration

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Report

At the core of the discussion was the significance of Latin America establishing its own vision for digital industrialisation. Sofia, a crucial participant in the conversation, emphasised the necessity of a regional vision prior to engaging in negotiations with other regions.

This sentiment aligned with the objective of SDG 9: Industry, Innovation and Infrastructure, which aims to foster sustainable industrialisation in developing countries. However, another perspective emerged, highlighting the challenges faced by Latin America in achieving a united front for digital industrialisation.

The presence of various blocs of countries within the region was seen as a hindrance to productive discussions. The lack of a cohesive framework, similar to the Free Continental Free Trade Area (FCFTA), was identified as a significant obstacle. This sentiment was supported by the argument put forth by an audience member, reflecting a negative sentiment towards the current state of regional integration in Latin America.

The discussion shed light on the need for Latin America to overcome these obstacles and work towards a common vision for digital industrialisation. By fostering greater collaboration and coordination among countries and regional blocs, Latin America can position itself as a formidable player in the global digital economy.

A regional approach would not only enable Latin America to leverage its collective strengths but also ensure that the benefits of digital industrialisation are distributed equitably. In conclusion, the conversation highlighted the crucial role of Latin America in developing its own vision for digital industrialisation.

While the need for a regional vision was emphasised, the challenges faced by the region in achieving a united front were also recognised. Overcoming these challenges and fostering greater regional cooperation will be essential for Latin America to fully harness the transformative potential of the digital age.

Arguments

Continued malfeasance by big tech corporations due to lack of regulation

Supporting facts:

• Everyday headlines proclaim the malfeasance by some of the largest corporations in human history, big tech

• These corporations became so vastly wealthy, so powerful, so monopolistic, so exploitative, is because of the total dereliction of governments to regulate them

• Big Tech used its excessive profits to intervene in the policymaking process

Topics: Big Tech, Regulation, Corporate Power, Government

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Big Tech corporations influencing global trade policies through trade agreements

Supporting facts:

• Big Tech began to put constraints on regulation back in 2016, when they made their proposals in the World Trade Organization

• Corporations prefer trade agreements because they are the least transparent and the least participatory type of all government decisions and because they are binding, permanent, and enforceable

Topics: Big Tech, Trade Agreements, Corporate Influence

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Digitalization for development is being replaced by limitations on governments

Supporting facts:

• Trade agreements are often not organized to use digitalization for development

• Big tech firms use trade rules to limit government regulations, hindering local economic benefits

• Developed countries have rejected core demands of developing countries in WTO

Topics: Digitalization, Trade rules, Government regulation

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OECD is trying to establish rules for digital services taxes

Supporting facts:

• Cross-border supply of services are affecting government revenues

• Governments are trying to impose taxes on the gross revenue of big tech companies providing online services

• The US has opposed such taxes, labeling them as discriminatory

Topics: OECD, Digital Services Taxes, Big Tech

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Algorithms should not be exempt from regulatory oversight

Supporting facts:

• Algorithms are used in business decisions that impact human and fundamental rights

• Big tech would like to put algorithmic decision-making out of regulatory oversight

• Public oversight would require access to the source code by academics, media and others

Topics: Algorithms, Regulation, Human Rights

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Big tech is okay with regulations that create or strengthen markets that they can operate in, such as consumer protection, or with government intervention in the economy to protect their intellectual property

Supporting facts:

• Deborah James mentioned that Big Tech is not against regulation, they are okay with regulations that create or strengthen markets that they can operate in, and with government intervention in the economy to protect their intellectual property

Topics: Big Tech, Market Regulation, Intellectual Property

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Big tech have got excessive wealth and power because of their intervention in the economy to set the rules

Supporting facts:

• According to Deborah James, the trends over the last 20 to 30 years of increasing inequality leading to social disturbances have been attributed, in part, to the excessive power of monopolies in society.

Topics: Big Tech, Economic Intervention

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Big tech, which includes some of the largest and most profitable corporations in the history of the world, should pay taxes in the developing countries where they operate and extract profit

Supporting facts:

• Amazon’s gross profit for the last 12 months ending September 30th was 256.2 billion US dollars, dwarfing the GDP of many developing countries.

• Yet these companies object to paying taxes in developing countries like Uganda or Nigeria or Kenya or Colombia or Indonesia for the privilege of being able to operate and extract profit there.

Topics: Big Tech, Taxation, Developing Countries

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Deborah James emphasises the importance of maintaining more policy space to develop digitalisation in public interest

Supporting facts:

• Acknowledged contribution from Fernando Hernandez for technical support and by UNCTAD

• Mentioned that worldisnotforsale.net holds relevant papers or materials on the subject

Topics: Digitalisation, Policy space, Public interest

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Report

The analysis focuses on the regulation of big tech corporations, highlighting several key points and arguments. One of these points is the negative impact of the malfeasance exhibited by big tech corporations, which is attributed to the lack of government oversight.

The corporations in question, described as the largest in human history, have become immensely wealthy, powerful, monopolistic, and exploitative due to the failure of governments to properly regulate them. This lack of regulation has allowed them to use their excessive profits to intervene in the policymaking process.

To address this issue, the analysis argues that governments need to implement more regulatory oversight on big tech. It notes that the negative impacts of big tech on society have prompted governments around the world to take nascent steps towards regulating the powerful tech sector.

The European Union, in particular, is leading the way with initiatives such as the Digital Services Act, the Digital Markets Act, and the Data Act. The EU has also nearly finalized the Artificial Intelligence Act. These efforts demonstrate the positive stance of governments towards implementing regulatory oversight on big tech.

Moreover, the analysis explores how big tech corporations exert influence over global trade policies through trade agreements. It asserts that these corporations began putting constraints on regulation as far back as 2016 when they made their proposals in the World Trade Organization.

The preference for trade agreements lies in their lack of transparency and limited participation, coupled with their binding, permanent, and enforceable nature. This phenomenon raises concerns about the democratic decision-making process and the potential influence of big tech corporations in shaping global trade policies.

In response to big tech’s influence on trade policies, the analysis argues that civil society, trade unions, and other civic groups need to pay attention and actively engage in trade policies. It emphasizes the importance of these groups being involved in decision-making processes to ensure transparency, participation, and accountability.

The analysis also highlights the impact of limitations on digitalization for development. It suggests that trade agreements often hinder governments from using digitalization for the benefit of local economies, as big tech firms utilise trade rules to restrict government regulations.

Furthermore, it states that developed countries have rejected core demands from developing countries in the World Trade Organization, further hindering digital development. Another notable point raised in the analysis is the issue of digital services taxes. It notes that the cross-border supply of services has started impacting government revenues, leading to attempts by governments to impose taxes on the gross revenue of big tech companies providing online services.

However, the US has opposed such taxes, labelling them as discriminatory. The argument suggests that the Organisation for Economic Co-operation and Development (OECD) is working towards establishing rules for digital services taxes. The analysis also addresses concerns regarding the oversight of algorithms, asserting that they should not be exempt from regulatory oversight.

Algorithms are often used in business decisions that have an impact on human and fundamental rights. The analysis indicates that big tech companies desire to keep algorithmic decision-making outside of regulatory oversight. The argument proposes that public oversight should involve access to the source code by academics, media, and other relevant stakeholders.

Furthermore, the analysis mentions the view of Deborah James, who suggests that big tech companies are amenable to regulations that create or strengthen markets they can operate in, such as consumer protection, and government intervention in the economy to protect their intellectual property.

This point highlights the nuanced stance of big tech companies towards regulation. The excessive power and wealth of big tech companies are also discussed in the analysis. It refers to comments made by Deborah James, attributing the increasing inequality and social disturbances over the last 20 to 30 years, in part, to the intervention of monopolies in the economy.

This observation reiterates the need for regulatory oversight to address the excessive power of big tech companies. The analysis addresses the issue of tax payments by big tech companies in developing countries. It highlights the astonishingly high gross profit of companies like Amazon, which surpasses the GDP of many developing countries.

Yet, these companies object to paying taxes in countries such as Uganda, Nigeria, Kenya, Colombia, and Indonesia, where they operate and extract profit. This observation raises questions about the ethical responsibility of big tech companies towards the countries they operate in and the need for fair taxation.

In terms of digital development in developing countries, the analysis supports the use of digital public infrastructures for their economic benefit. It specifically mentions Deborah James’ advocacy for the idea that developing countries should utilise their own data for digital industrialization and for the overall public interest.

Lastly, the analysis emphasizes the importance of maintaining policy space for digitalization in the public interest. It suggests that binding rules in digital trading could lead to further consolidation of power and profit by the already super-wealthy. The hope is expressed that events discussing this topic will bring awareness to the potential risks involved in digital trading.

In conclusion, the analysis provides insights into the regulation of big tech corporations, highlighting the negative impacts of their malfeasance due to a lack of government oversight. It advocates for increased regulatory oversight and the involvement of civil society and trade unions in trade policies.

The analysis also raises concerns about limitations on government regulations, exemption of algorithms from oversight, and the need for fair taxation in developing countries. It emphasises the importance of digital public infrastructures for economic development and maintaining policy space for digitalization in the public interest.

Arguments

Big tech corporations are harnessing global trade rules to their advantage

Supporting facts:

• The digital two dozen principles on US Trade Representative’s website represented the wishlist of tech companies for binding international legislation.

• Trade negotiators often had no idea of the implications of what they were negotiating.

Topics: Global Trade, Big Tech, Regulations

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Current trade rules are not conducive for the digital development strategies of developing countries

Supporting facts:

• Developing countries have to rely on exceptions and phase-in periods for protections as the rules aren’t designed for them.

• Proposals from developing countries to amend rules are often left without co-sponsors.

Topics: Developing Countries, Digital Development, Trade Rules

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The US opposes digital services taxes instituted by other countries.

Supporting facts:

• US has imposed or threatened to impose retaliatory tariffs on exports from countries introducing digital services taxes.

• Tax exceptions in trade agreements are inconsistent and don’t deal with US unilateralism.

Topics: Taxation, Digital Services Tax, US Policy

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Report

According to the speakers, tech companies are taking advantage of global trade rules to serve their own interests. This sentiment is negative as it suggests that these corporations are using trade regulations to gain an unfair advantage. The wishlist of tech companies for binding international legislation, known as the digital two dozen principles on the US Trade Representative’s website, represents their desire for policies that align with their business goals.

This indicates that trade negotiators may not always fully understand the implications of the agreements they are negotiating. Moreover, developing countries argue that the current trade rules do not support their digital development strategies. They are forced to rely on exceptions and phase-in periods for protections, as the existing rules are not designed to cater to their specific needs.

Proposals from these countries to amend the rules often lack co-sponsors and do not receive sufficient attention. This further exacerbates the challenges faced by developing nations in terms of digital development. The clash between the understanding and regulation of data, especially concerning indigenous peoples’ knowledge, is another significant issue raised by one of the speakers.

The tribunal in New Zealand found that trade rules undermine the recognition and protection of Maori data sovereignty. This points to a need for an Indigenous peoples carve-out in global trade legislation, suggesting that there is a mismatch between the existing policies and the protection of indigenous knowledge.

The national security provisions within trade rules are seen as double-edged swords. While they are necessary for countries to protect against potential security risks posed by big tech companies, these provisions are also open to abuse. Essential security interests are being claimed over everything, which raises concerns about the potential misuse of these provisions.

Additionally, the US opposes digital services taxes implemented by other countries and has even imposed or threatened to impose retaliatory tariffs on exports. This creates inconsistency in tax exceptions within trade agreements and reflects US unilateralism in this context. The disagreement on digital services taxes highlights the complexity of international trade relationships and the challenges faced in reaching consensus on taxation matters.

In conclusion, there are several issues related to global trade rules and their impact on various aspects of the digital economy. Tech companies are seen to be leveraging these rules to benefit themselves, while developing countries face challenges in aligning these rules with their digital development strategies.

The clash between data regulation and indigenous rights further complicates the scenario. Additionally, national security provisions and disagreements over digital services taxes pose additional obstacles to achieving fair and balanced trade agreements. These discussions highlight the need for greater global cooperation and dialogue to address these challenges and create more inclusive and equitable trade regulations.

Arguments

The U.S. government has been slow in regulating emerging technologies for consumer protection and human rights

Supporting facts:

• Civil rights organizations and regulators have alarmed against the potential effects of source code provision on AI and right-to-repair policies.

• There are numerous cases of discrimination embedded in AI algorithms.

Topics: Emerging Technologies, Consumer Protection, Human Rights

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Big tech firms have used international trade negotiations to advance their deregulatory agenda

Supporting facts:

• In the U.S.-Mexico-Canada agreement and proposals at the World Trade Organization Joint Statement Initiative on e-commerce, big tech firms pushed for problematic digital trade provisions.

Topics: Big Tech, Trade Negotiations, Deregulation

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This analysis examines various arguments and stances regarding emerging technologies, consumer protection, and human rights. One significant concern is the potential impact of source code provision on AI and right-to-repair policies, which has raised alarm among civil rights organizations and regulators.

Furthermore, there is a recognition of the prevalence of discrimination embedded in AI algorithms. Criticism is directed towards the US government for its perceived slow response in regulating emerging technologies to protect consumers and uphold human rights. This criticism suggests that the government has been slow in adapting policies to address the potential negative consequences of these technologies.

Moreover, scrutiny is placed on big tech firms for their influence in international trade negotiations, specifically in relation to digital trade provisions. It is argued that these firms have used trade negotiations to advance their deregulatory agenda, raising concerns about consumer protection and equal access to digital services.

This observation sheds light on the power dynamics and influence of big tech firms in shaping policy discussions. However, a positive development is seen in the US withdrawal of support for controversial digital trade provisions. This decision has been applauded by civil society organizations, small and medium-sized tech companies, and prominent members of Congress.

The withdrawal aligns with the administration’s and Congress’s goals to regulate big tech more effectively. This observation highlights the potential for policy changes that promote greater accountability and regulation of big tech companies. On the other hand, there is concern over big tech companies lobbying against domestic legislative efforts.

It is argued that these companies have undermined bipartisan attempts to pass privacy and competition legislation in Congress. This observation underscores the need to address the influence of big tech companies in shaping legislation and its potential consequences for democratic decision-making.

Overall, this analysis emphasizes the need for proactive regulation of emerging technologies, particularly in relation to consumer protection and human rights. It highlights the potential risks and challenges associated with the influence of big tech firms in policy discussions and the importance of addressing issues such as discrimination in AI algorithms.

The US government’s withdrawal of support for controversial digital trade provisions is seen as a positive step towards greater regulation and accountability. However, the lobbying activities of big tech companies are identified as problematic and potentially hindering the implementation of important legislation.

Arguments

Data flows are vital to the digital economy, and their governance should not always be left to the private sector. Governments may need to intervene.

Supporting facts:

• In the past, U.S. believed that the private sector should lead the digital economy. Now, they question if the government should govern data flows.

• Data flows, often seen as the ‘blood’ of the digital economy, might need government regulation.

Topics: Data flows, Digital Economy, Government Regulation

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Digital public infrastructures are layers of the digital stack, which are considered to be something of a commons or publicly owned, and allow better business and equitable private sector to exist.

Supporting facts:

• In India, there is a financial transactions switch, a public switch that everyone has to plug into. They have an e-commerce public switch called online network digital commerce which allows sellers, buyers, logistic providers to all get into one switch.

• EU has many projects and one of it is the health data space regulation which mandates that all health data of all private health clinics have to be put into a public grid. This is accessible to researchers, and startups in a very controlled manner.

Topics: Digital public infrastructures, Digital stack, Public Grid

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Forego the digital trade agreements route and go into a cooperation route.

Supporting facts:

• EU has a new project called Global Gateway, which includes digitalization and is stated to be highly value laden.

Topics: digital trade agreements, cooperation, Global Gateway

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The analysis reveals several significant arguments and perspectives on the governance of data flows, digital trade agreements, and the role of digital public infrastructures. Firstly, there is a growing question about whether government intervention is necessary in the governance of data flows, which are considered crucial to the functioning of the digital economy.

Historically, the United States believed that the private sector should lead the digital economy, but there is now a shift in thinking. It is argued that governments may need to play a role in governing data flows, which are often referred to as the “blood” of the digital economy.

This viewpoint suggests that the private sector should not solely hold responsibility for data governance. In contrast, the analysis suggests that digital trade agreements may not be the most effective solution to address the current problems of digital trade and e-commerce.

While digital trade and e-commerce have been rapidly growing, there are no identified issues that these agreements specifically aim to solve. Moreover, it is argued that such agreements could potentially hinder certain valuable interconnections, such as the financial public switches between Singapore and India.

Another perspective is centered around the role of digital public infrastructures in promoting competition and reducing the dominance of big tech companies. For instance, in India, the government has implemented a platform that mandates interoperability among all digital payment systems.

This has stimulated competition and improved the digital payment landscape. It is argued that big tech companies have maintained their dominance by controlling the various infrastructures, and hence, the establishment of digital public infrastructures can help level the playing field.

On a similar note, digital public infrastructures are regarded as essential layers of the digital stack that should be considered as a commons or publicly owned. These infrastructures enable better business opportunities and equitable growth within the private sector. Notably, in India, public digital infrastructure includes a financial transactions switch, as well as an e-commerce public switch that facilitates integration between sellers, buyers, and logistics providers.

However, the analysis also highlights that most provisions of digital trade agreements do not align with the development of public digital infrastructure. Such agreements fail to accommodate the future needs of a digital economy where various sectors must operate on specific kinds of public digital infrastructure.

This critique suggests that digital trade agreements should incorporate provisions that support and foster the growth of public digital infrastructures. Furthermore, there is a call to explore alternative routes for cooperation instead of solely relying on digital trade agreements. For instance, the European Union has introduced the Global Gateway project, which aims to foster cooperation and digitalization.

This project is described as being highly value-laden and offers an alternative approach to address the challenges of the digital economy. Lastly, the analysis raises critical concerns about the EU’s Global Gateway project, suggesting the need for a fair and open digital system.

The call for a panel to critique the project and provide guidance on what a fair and open digital system should encompass indicates a cautious approach towards this initiative. In conclusion, the analysis highlights the need to consider the role of governments in the governance of data flows in the digital economy.

It suggests that digital trade agreements may not effectively solve the challenges of digital trade and e-commerce, and that digital public infrastructures are crucial for promoting competition and reducing the dominance of big tech companies. The analysis also emphasizes the importance of aligning digital trade agreements with the development of public digital infrastructures.

Additionally, it explores the potential of cooperation routes, such as the EU’s Global Gateway project. Nonetheless, there are critical views towards this project, which call for a fair and open digital system.

Arguments

Free trade agreement rules may not be beneficial for all businesses in Latin America, particularly those in the tech and data center industries

Supporting facts:

• In Latin America, there are many startups, known as ‘multi-Latinas’, which operate across the region and may struggle to compete with international companies

• Some companies, such as Argentina’s national data center company Arsat, could potentially benefit from regulations that insist on certain types of data being stored within the country

Topics: free trade agreement, Latin America, digital industry, artificial intelligence, data centers

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Latin America needs to formulate its own regional rules and strategies before engaging with international regulations

Supporting facts:

• Latin America is at a political and historical moment where it needs to think regionally

• Most of their digital companies are multi-Latinas, which operate across the region

Topics: Latin America, digital economy, regulations, strategies

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Need for regional integration in economic and political dialogue between Pacific Alliance and Mercosur

Supporting facts:

• Bolivia has recently joined the Mercosur

• Venezuela joined Mercosur a couple of years ago

Topics: Pacific Alliance, Mercosur, Regional Integration, Political Dialogue

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Criticality of taxation, cyber security, and accountability of AI and companies

Supporting facts:

• Countries have been subjected to large scale data leaks

• The lack of human resource in some countries to deal with technical issues

• Twitter has been been sold for the same amount that the Argentine government owes to the IMF

Topics: Taxation, Cyber Security, Accountability of AI

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Solidarity within the region in dealing with these issues

Supporting facts:

• Countries like Paraguay and Ecuador do not have the capacity to deal with technical issues

Topics: Regional Solidarity

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The analysis presents various topics related to Latin America. One area of focus is the impact of free trade agreement rules on businesses in the tech and data center industries. It argues that these rules may not benefit all businesses in the region, particularly “multi-Latinas” startups that operate across Latin America and struggle to compete with international companies.

There is a suggestion that Latin America should develop its own regional rules and strategies before engaging with international regulations. This would give the region more control over its digital economy and address its unique needs and interests. Concerns are raised by civil society about free trade agreement rules negotiated within the World Trade Organization (WTO).

Nearly 70 organizations from across Latin America have expressed worries about these agreements, as well as the moratorium and JSON e-commerce negotiations. Civil society believes these agreements could limit their governments’ ability to protect citizens. Regional integration is seen as crucial in the economic and political dialogue between the Pacific Alliance and Mercosur.

Recent membership of countries like Bolivia and Venezuela in Mercosur is viewed positively as a step towards regional integration. The analysis emphasizes the importance of taxation, cyber security, and accountability of artificial intelligence (AI) and companies. Large-scale data leaks and a lack of human resources to address technical issues are significant challenges.

Additionally, the sale of Twitter for the same amount that the Argentine government owes to the International Monetary Fund highlights the need for proper taxation and accountability. The significance of regional solidarity in dealing with technical issues is underscored. Some countries in Latin America, such as Paraguay and Ecuador, do not have the capacity to handle these issues independently.

Collaboration and support within the region are vital. In conclusion, the analysis stresses the need for a regional approach in Latin America to address the challenges and opportunities of the digital economy. It emphasises thinking regionally and formulating specific regional rules and strategies.

The concerns of civil society regarding free trade agreements, along with the importance of regional integration and solidarity, should be considered. Finally, addressing issues such as taxation, cyber security, and accountability of AI and companies is crucial for the region’s sustainable development.