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Learning to Love the WTO: How Trade Policy Can Save Open Internet - and Bridge the Digital Divide

From the dawn of the mainstream commercial Internet in the late 1990s until quite recently, the world trade and Internet communities have been almost entirely disconnected from one another. This isn’t surprising, given that trade policy historically follows technological developments with a considerable ‘lag.’ As the senior-most ‘permanent representative’ on the ground in Geneva from the for-profit tech sector, a big part of my job is to try and translate the Internet for the Diplomatic Corps across many different policy subjects. Even two years ago trade policy wasn’t on our radar (in Geneva); there didn’t seem to be any point of interconnection.

Fast forward to today and trade policy is at the heart of our work in Geneva, so much so that I’m leading a delegation of Internet companies and organisations to the WTO’s Ministerial meeting in Bali the first week of December. More than that, I have come to believe that world trade policy is the best opportunity we have to protect the fundamentally open, permissionless nature of innovation at the heart of the Internet—and that it just might provide the key to bridging the ‘Digital Divide’ as well.

Let me explain why. Trade policy begins from the premise that zero barriers, zero tariffs, reducing regulations, and eliminating ancillary impediments to trade between countries is the starting place because anything which creates friction in the trading process reduces trade. This starting place makes trade unique amongst policy environments: everywhere else regulation, creating rules, processes and structures is the where things begin, albeit in the interest of creating predictability in the relations between nations.

The Internet comes from a remarkably similar place: that efficiency in all things is the objective of all design choices. For example, the bar to extending the network or starting a new online service is as low as you can get: anyone can expand the physical network simply by attaching a standards-compliant device to it at any point, just as anyone can start up a new online service and immediately serve a borderless world’s billions of users. There is also a commonality on standards: trade has long recognised that true, international standards promote trade through interoperability of products and services, just as the Internet community knows that common standards make the Internet possible.

This all makes the two communities a natural fit once you get beyond the different language each speaks (a gap sufficiently great that we produced a discussion paper to give both a common frame of reference). So what can the two do together?

The Internet is a platform increasingly relied upon by the entire economy: a recent McKinsey study found that 75% of the economic benefits of the Internet accrue to traditional industries. This argues that the starting place should conceptually be: “The Internet is the trade platform of the modern world. All countries have a shared interest in maintenance of its health and development. Let us collectively agree to avoid acts which disrupt its ability to serve the greatest number at the lowest cost with the greatest efficiency and performance.”

What are the elements of this common platform? The answer must be all those functions necessary to ensure that any ‘point a’ on the network can reliably reach any other ‘point b’ without interference. This includes the telecommunications ‘pipes’ but also addressing functions and the technical standards that facilitate the interoperability of hardware, software and security systems that ensure that ‘point a’ is reaching the real ‘point b’, not some location that simply looks like it. Of course, there are some provisions in existing trade agreements that cover elements of what has become the Internet—but not in a holistic and coherent way.

Protecting this set of services and standards creates difficult choices the moment the two points exchange data: what if that data relates to some illicit activity? What if it is content objectionable to some for social or other reasons?

Those are hard questions, but trade policy can’t (and shouldn’t try) to solve them. Right now we have a growing global problem where content issues are causing countries to interfere with the underlying platform, proposing balkanizing measures in the interests of various public policy priorities. Agreeing to ensure the network serves all based on efficiency alone is a common essential good—and agreeing that issues with content should be dealt with in a way that does not interfere with that objective the indispensable corollary. Meeting those objectives would be of profound global benefit—but that achievement contains within it another immense benefit to billions.

According to the ITU’s omnibus report “Measuring the Information Economy 2013” about 40% of the world is online now. The least connected countries (39 of them, home to one-third of the human family or 2.4 billion people) are not catching up; they’re falling further behind. We know that where you create legal predictability in commerce you create an essential precondition for investment. An agreement that protects the network as a platform would create a profoundly positive climate to spur the long-term investments in developing world Internet access indispensable to bridging the Digital Divide.

The trade community is struggling to resolve issues that date back a decade or more. These issues are not trivial—quite the contrary—but the networked economy value proposition is too immense to wait; a mechanism needs to be agreed such that digital economy issues can be mainstreamed and explored alongside current issues. I can tell you there is a genuine interest in the digital economy in trade ministries around the world—and at the WTO itself. The Internet community should help the trade world understand the Internet better—and vice-versa. Both communities—to say nothing of society at large—have everything to gain and a meaningful agreement down the road on the networked economy just might turn into one of the world trade system’s greatest achievements.

By Nick Ashton-Hart, Associate Fellow, Geneva Centre for Security Policy

The views expressed in this article are his alone. Find him on Twitter at @nashtonhart.

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Good piece Nick Kieren McCarthy  –  Dec 3, 2013 6:13 PM

Strikes me that this may be a good way to build up a counter-balance to governments’ natural regulatory response when it comes to the Internet. The tech community can’t expect to do it all by itself.

Thanks Kieren - for reading and for Nick Ashton-Hart  –  Dec 6, 2013 1:02 AM

Thanks Kieren - for reading and for the thought. Not only is it a good counter-balance, I think it also helps to bring a ministry - trade - into a discussion otherwise often dominated by the communications ministry, at the ITU.

Restarting-point? JFC Morfin  –  Dec 4, 2013 5:38 PM

Kieren, such a counter-balance would also, at last and anew, be to the iStar political and technical community. The Internet cannot continue to support a unique ICANN and co. globality. Sometimes Business should read ICP-3.

A further thought... Nick Ashton-Hart  –  Dec 6, 2013 1:07 AM

One thing I should add to the article, for which I thank a colleague in the hardware side of the technology world. There is a strong precedent for the Internet world to look to when looking through a trade ‘lens’ at our issues: the success of the Information Technology Agreement (“ITA”), now 15 years old, in eliminating tariffs on technology related hardware and, crucially, components. There is compelling evidence that this agreement has had a very beneficial effect in disseminating more technology and driving innovation as well as the global IT supply chain.
This agreement is the fruit of long labours and a negotiation to expand its scope is now underway in Geneva. While it is true that the Internet services - and broader Internet governance and policy communities - are largely strangers to the WTO, the “hardware side” of the IT world is not, thanks to the ITA.

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