WTO/Digital Trade: Non-application between Joint Initiative participants and similar practice in other agreements
Dr Ines Willemyns has an interesting guest post over at the IELP Blog on the recent draft Chair’s text from the WTO’s Joint Initiative on Electronic Commerce (E-Commerce JI), which I commented on last week. It’s worth a read in full, but I just wanted to follow-up on the discussion on the ‘non-application clause’ found in the proposed final provisions (noting this was not the focus of the post but instead just a side comment!):1
There was a discussion in the comments on how significant this clause was, including implications for MFN - does it presage splintering among the E-Commerce JI participants themselves?
As I mentioned on Twitter and in the comments to the post, this clause does have some precedents in the WTO. It’s in the GATT (Article XXXV) and the Government Procurement Agreement (Article XXIV(14)), and as Ricardo commented on the IELP it’s also in the Marrakesh Agreement itself (Article XIII).
I also noticed that the WTO’s Analytical Index Article XXXV entry lists six Members making current use of GATT Article XXXV, and the entry on Article XIII of the Marrakesh Agreement says two invocations of it are still in force (Turkiye in respect of Armenia, and the United States in respect of Tajikistan).
I would think these provisions make the most sense in the context of agreements with actual market access commitments that are negotiated for each Members (e.g. tariffs schedules or government procurement coverage). It seems from the Analytical Index that in the GATT, Article XXXV was driven by a concern that Members that hadn’t undertaken tariff negotiations with acceding parties didn’t want to be forced to give them the benefits of their commitments when it was agreed accessions only required a two-thirds majority to be approved. The Analytical Index also mentions a treaty law concern about forcing Members into a trade agreement with acceding parties against their will. There also do seem to be some clearly political cases in the lists of past uses. These latter two concerns may still be relevant to the E-Commerce JI given its proposed open accession clause, which has no requirement for agreement from current participants.
In the end, I expect the proposed use of this non-application language in the E-Commerce JI comes from a mix of looking at past precedents, treaty law fastidiousness, and a small dose of geopolitical concerns.2
Full disclosure: these were proposed by Australia, and I previously worked for Australia including on WTO JSI issues, so I may be biased in favour of their excellent trade lawyers (this post also obviously does not disclose any confidences but is based only on public information).
Prof Jane Kelsey noted that: “…a provision on non-application between particular parties would allow one Party to cherry pick which other parties the agreement applies to. That appears to be geopolitical, given that China and Anglo-American countries are both parties. It would be very difficult for most developing countries to use in practice, in contrast to a broader self-judging national security exception.”