Trade Agreements to Promote Electronic Commerce III

• Author: John Gregory
• Date: December 30, 2019

A couple of times in the past three years, we have looked at the use of free trade agreements to promote the reform or harmonization of the law on electronic commerce. The first article considered the general question of how these agreements are negotiated and suggested that they may not be the best vehicle for reforming technical commercial law. The people at the negotiating meetings tend to be economists, not lawyers, and negotiations may involve trading off provisions that are not readily severable without damage to the principles of the remaining law. A stronger role is needed for commercial and technology law experts to ensure workable law reform.

The second article pursued the discussion through more recent agreements (CPATPP, USMCA and ABA model provisions).

There are, not surprisingly, arguments on both sides of the question whether this is a good use of trade agreements.

Trade obligations, while sometimes precise in their focus, seldom get to the stage of draft statutory provisions. That would be difficult, given the different legal and cultural traditions of the parties. However, that often means that the obligations are at such a high level as to be unhelpful in resolving the practical issues that arise in legislating

Consider the example of an ASEAN/Australian/NewZealand agreement of 2010, described in an analysis of such agreements published in 2017 by the Asian Development Bank. Chapter 10 of that agreement deals with electronic commerce. The provisions are straightforward and unobjectionable, but on the difficult question of harmonizing authentication systems, on which mutual recognition of electronic documents may depend, the Agreement says this:

1. Each Party shall maintain, or adopt as soon as practicable, measures based on international norms for electronic authentication that:

a. permit participants in electronic transactions to determine the appropriate authentication technologies and implementation models for their electronic transactions;

b. do not limit the recognition of authentication technologies and implementation models; and

c. permit participants in electronic transactions to have the opportunity to prove that their electronic transactions comply with the Party’s domestic laws and regulations.

1. The Parties shall, where possible, endeavour to work towards the mutual recognition of digital certificates and electronic signatures that are issued or recognised by governments based on internationally accepted standards.
2. The Parties shall encourage the interoperability of digital certificates used by business.

“Endeavour to work towards…” “shall encourage the interoperability of certificates” – these provisions have no substance. They are aspirational, they state what the parties hope some day, somehow, to achieve. They are without doubt worthwhile goals, but the provisions do not help arrive at them.

Many of the e-commerce provisions of free trade agreements are similar, notably on the hard questions around authentication. So is it really worth the effort to include such provisions at all?

The other side of the question was supported by the Kommerskollegium, the National Board of Trade of Sweden, in 2012. It published a short book (27 pages) setting out practical difficulties its members experienced in electronic commerce.

The table of contents alone gives a dramatic idea of the challenges faced by e-business people, to say nothing of their lawyers and governments:

...