Battle over digital economy at RCEP

July 21, 2017 There are proposals in the Regional Comprehensive Economic Partnership that government regulation should have no compulsory disclosure of source codes, no restriction on transfer and processing of data outside the country, and no requirements for computing facilities to be locally based. These proposals raise questions about the ability of governments to have effective national regulation of data privacy and data security.

All these commitments will have serious ramifications on the development prospects and sovereignty of countries such as India, said NZ Law Professor Jane Kelsey at a media conference in Hyderabad on July 18, 2017. “Prohibition on compulsory disclosure of source code (codes behind a software) would be a hindrance to technology transfer and also make it difficult to check anti-competitive practices by companies,” she said.

In a recent paper, Deborah James from the Centre for Economic and Policy Research said, “Corporate lobbies have been clear that they want localisation requirements banned, such as those requiring a local presence in the country in order to conduct business transactions, the hiring of local workers, the use of local servers and computing facilities in which they have invested”.

These proposals are designed to lock in the advantages of rich countries in e-commerce, and thus to lock out developing countries, a repeat of the experience of industrialisation, said Prof Kelsey.

Kelsey said that in the WTO, too, developed country members such as the EU, the US, Japan, Australia as well as China and Brazil were trying to push similar rules on e-commerce for the Buenos Aires Ministerial Conference in December 2017.

These proposals on the digital economy in the RCEP talks echo President Trump’s recent formal proposal in the approaching renegotiation of the North American Free Trade Agreement, and some were also in the Trans-Pacific Partnership.