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WASHINGTON - Senator Joseph Lieberman, D-Conn., and The Progressive Policy Institute (PPI) warned today that regulatory uncertainty could threaten the viability of international e-comerence. PPI proposed a policy framework to alleviate global conflicts which threaten free trade on the Internet, which Lieberman endorsed.
"Digital trade presents great opportunities for U.S. companies looking abroad to find new and growing markets," Lieberman said. "But global e-commerce will not meet its full promise unless industry and governments figure out a way to make it a reality."
As the Internet expands globally, the cross-border nature of the technology is revolutionizing international trade. Consumers now have the ability to bypass the traditional export-import system and conduct a transaction directly with a foreign seller, without needing to travel to the seller's country. Unless industry and policy makers can come to grips with a host of pressing policy issues, web consumers may lose confidence to visit web sites beyond their national borders. Given the confusing and conflicting laws of nearly 200 nations, many erected by countries seeking to protect their domestic industries from global e-commerce competitors, e-commerce sellers may find it easier to not conduct business with foreign buyers.
The PPI paper, entitled "A Third Way Framework for Global E-Commerce" - by Robert Atkinson, Director of the Technology and New Economy Project at PPI, and Shane Ham, Technology Policy Analyst for the Technology and New Economy Project - lays out a comprehensive policy framework and proposes specific policy recommendations to ensure that this emerging form of trade is allowed to flourish.
"The Internet is revolutionizing trade by connecting sellers and buyers in different countries directly," Atkinson said. "But if consumers are wary of venturing into foreign cyberspaces or businesses are burdened by conflicting national laws, we risk the creation of a digital iron curtain which may balkanize the Internet, causing the World Wide Web to become Numerous National Nets."
To preserve the cross-border nature of the Internet and promote its continued growth, policymakers must address two essential questions: jurisdiction, the question of whose laws apply to a cross-border transaction; and sovereignty, the question of how much domestic control over access to the global Internet must be relinquished in order to promote global e-commerce. Through a combination of government action and development of new private institutions, it is possible to create an environment of trust for buyers and sellers that will allow cross-border electronic commerce to flourish.
PPI has developed a framework of six principles to achieve this goal:
Take a cautious approach to regulation: allow global e-commerce time to develop before determining which areas will require government action.
Increase global market access: maximize opportunities for buyers and sellers to come together.
Don't use regulations for protectionism: signatories to the WTO or other multilateral trade agreements should not be allowed to impose rules on e-commerce or the Internet with the intent of reducing online foreign competition.
Enforce regulations domestically: governments cannot impose their laws on foreign companies unless those companies target their activities within the government's territory or a treaty is in effect.
Limit restrictions on social, cultural, and political content: government restrictions on content cannot block trade in violation of WTO principles and must be enforced only within the restricting government's territory.
Take advantage of technology: encourage innovation in the development of technological tools and industry best practices that solve public policy problems.
This report may represent the first overarching, logically consistent policy framework for international e-commerce in the 21st century. As nations begin to debate in the international arena a whole host of issues - consumer protection, data privacy, taxation, content regulation, copyright, spam, jurisdiction, customs duties, import and export restrictions, cyber crime, and more – following the framework's principles will ensure that the world wide web will remain truly global.
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