Introduction:
Electronic Commerce has started a new revolution. It is defined as doing business over the Internet and covers any commercial transactions and trade that are effected via electronic means such as facsimile, telex, EDI, the Internet, and telephone.
E-commerce is going to change everyone’s business. There are many reasons for governments and private institutions to become interested in Electronic commerce. From a government perspective, however, e-commerce is a new phenomenon, particularly from an international point of view.
In recent years, electronic trade in digital content has become extremely important. The rising importance of digital content can be defined in two factors[1]: 1- traditional contents become digitalize rapidly, in addition, internet become a global distribution platform for digital content.[2] 2- The economic behind e-commerce, the high fix cost of distribution are decreasing on the internet distribution; hence duplication and distribution of digital content become tradable. [3]
Globalization, the dismantling of trade barriers, the development of technology, and the internet are some reasons 4 that have led to the growing potential of imported and exported digital content, such as software, music, films, and e-books; moreover, process innovations, product innovations, and market innovations help grow e-commerce.
E-commerce has characteristics of cross-border supply; consequently people are interested in this new phenomenon. They do not need to invest and pay huge amount of money for taxes and have a representative in other countries, and they can sell their products on the Net easily.
The e-commerce transactions around the world are increasing dramatically. In 1999, the secretary of the World Trade Organization (WTO) predicted that the turnover of global electronic commerce, which includes production, web advertising, sale of goods or distribution of products via electronic network, would amount to £150 billion. Forrester Research, Inc. USA, a consultancy firm in E-Commerce, stated that the e-commerce business would reach between $1.4 trillion and $3.2 trillion in 2003 – up from a range of $55 billion to $80 billion in 1998 4. 5 It shows the growth of globalize electronic commerce.
E-Commerce and the WTO
The term “e-commerce” is used within the WTO as the “production, distribution, marketing, sale, or delivery of goods and services by electronic means. The work programme will also include consideration of issues relating to the development of the infrastructure for electronic commerce.”[4] However, there is not a precise definition for Electronic Commerce and as Cathrine L.Mann has stated “it embraces a complex amalgam of technologies, infrastructures, process and products.” The element of infrastructure is important in understanding the meaning of Electronic Commerce. Mann continued that three types of infrastructure are of special importance for having Electronic Commerce, and one of them is Telecommunication infrastructure such as cable, satellite, etc.[5]
Due to this new phenomenon, WTO has been required to establish a new trade policy. At the Second Electronic Commerce, WTO members wrote the Declaration on e-commerce, and they called for the establishment of a global e-commerce “to examine all trade-related issues relating to global electronic commerce, taking into account the economic, financial, and development needs of developing countries…”[6] and also, on 20 May 1998, in the Ministerial Conference, it was decided to establish “a comprehensive work program to examine all trade-related issues relating to global electronic commerce…”[7]. In 2001, in Doha, they agreed that electronic commerce has created a new challenge and “opportunities for trade for members at all stages of development”[8]. At the fourth Conference in Doha in 2001, Ministers agreed to continue the work program.[9] As the Ministers declared to the General Council of the Fifth Ministerial in Cancun in 2003, they agreed to continue and also practice custom duties.
Because e-commerce comes across a very broad area which includes services, intellectual property rights, and trade of goods, in regarding, the WTO councils include the Council on Trade in Goods, the Council on Trade in Services, the Council on Trade-Related Intellectual Property, and the Committee on Trade and Development are studying the effect of e-commerce on world trade. They provided some reports by July 1999. The aim of these reports was to assess the effect of e-commerce on the various Council Responsibilities. They try to answer the following main questions:
- How do existing trade agreements affect electronic commerce?
- In existing legislation, if there are any loopholes?
- Does electronic commerce create a new field of responsibility for the WTO members, and do they need to legislate new trade rules?[11]
As opposed to many other tradable goods and services, the trade of digitally delivered content products does not yet face trade barriers erected by governments that discriminate against content suppliers of different national origins.
GATS or GATT: Defining the boundary Between Goods and Services
Defining the boundary between goods and services, particularly in the WTO, is very problematic as the jurisprudence makes it unclear when the panel and Appellate Body will apply the rules on goods in the GATT or the rules on services from the GATS. 12 The distinction between GATT and GATS means that members’ obligations differ if the product is classified as goods or services.
The WTO panel and Appellate Body Jurisprudence have ambiguous views on this issue. Moreover, in the comparable bodies, the European Union (EU), the same as the WTO, the question of the determination of such boundary arises.[12] Accordingly, considering that the European Union has some advantages, the European Court of Justice (ECJ) has carefully studied the distinction between goods and services in the interpretation of EU rules[13]. Consequently, there are some judicial considerations within the EU that can affect the decision of the panel and the Appellate Body.
Accordingly, there is one way to identify the boundary between goods and services, which could be by reference to scheduling.[14] However, there is still considerable ambiguity in the classification of products traded online and in audiovisual products. In these sectors, member of the WTO could not agree on the appropriate classification methodology because of their desire to protect their domestic market interests. The member of the WTO must decide whether the General Agreement on Tariffs and Trade (GATT) or General Agreement on Trade in Services (GATS) should be applied to international electronic commerce,[15] particularly digitally delivered content.
The WTO members can regulate and tax international trade, which depends on the WTO discipline and policy that they decide to apply. The digital content on the internet could be considered goods or services. Choosing each of them will determine whether this trade is subject to the rules that apply to GATS, GATT, or both.[16]
Before the creation of the WTO in 1995, only trade in goods was covered by the General Agreement on Tariffs and Trade, governed by the multilateral trade rules.[17] All the GATT principles are about two non-discrimination provisions: MFN (the most favoured nation clause) and national Treatment Provision.[18] However, GATT principles have some exclusions regarding the imposition of trade barriers in limited circumstances, which contain some non-trade issues.[19] As a result, the provisions of GATT do not govern the multilateral trade-in service. Hence, the General Agreement on Trade in Services is introduced.
GATS reduces the barriers to trade in services in two ways: 20 First, the restriction on domestic regulation has been eliminated, and second, GATS resolves issues by presenting particular service sectors through specific annexes. 21 However, GATS principles draw on the GATT provisions, which include MFN principles 22, national treatment provisions 23, and general exemption clause[20].
Interpreting the WTO rules and application is governed by the Appellate Body and the panels, which should make a distinction between trade in services and trade in goods. There are a few guidelines in the WTO rules that define trade-in service. Under article I(1) of the GATS, “Trade in Service” has been defined, which draws a distinction between trade in goods and trade in service. Article I define trade in service as the supply of the service.[21] Accordingly, article I(2) of the GATS describes four modes for service delivery: [22]
Mode 1: The service is exported from a member of the WTO to the other member;[23] (Cross-border Supply)
Mode 2: The service is supplied and consumed by the consumer in the county of origin (Consumption abroad)[24]
Mode 3: The service is delivered by the provider of a WTO member to supply another WTO member; in other words, a service supplier from a territory of one member provides services in the territory of any other member through commercial presence. (Commercial Presence)[25]
Mode 4: The service delivered by a natural person of one WTO member to another WTO member (Presence of natural persons)[26]
The emphasis on distinguishing a product from goods or services is on the way in which the product is treated rather than on its inherent characteristics.[27] As in paragraph 2 of the preamble of the GATS, considering the economic element or legal nature of the transaction, the scope of the definition will be drawn.[28] It aims to “establish a multilateral framework of principles and rules for trade in services with a view to the expansion of such trade under conditions of transparency and progressive liberalization and as a means of promoting the economic growth of all trading partners…” The same discussion in Mexico—Measures Affecting Telecommunications Services case[29] took place. As the panel, in this case, stated the definition of “trade in services” in Article I(2) was “defined comprehensively.”[30]
However, as Lorna Woods argued, there is a difficulty with the above view, which it has stresses the method of transfer without describing the characteristics of the products themselves, as the Article I of the GATS is silent on these points. It arises some issues when “problematic when viewed against the Appellate Body’s approach in Canada—Autos[31] where it clearly stated that the inherent economic characteristics of the product were relevant to the scope of the MFN obligation in GATT and GATS, as both agreements covered different subject matters. On this view, the essential characteristics of the product only appear relevant once the substantive obligations are assessed rather than when the threshold criteria for the application of GATS are considered.”[32]
Making orders and transactions on the Internet and delivering physical goods are treated as trade, and the GATT rules are applied to them. On the contrary, any content delivery on the internet is treated as a service to which the GATS discipline applies. The products delivered on the internet are considered goods, such as books, videos, music CDs, software, and magazines. When these products are imported in physical form, the GATS discipline applies to them; however, the question arises of whether they can be treated as services when digital content is delivered on the internet or if they should be treated as goods because of similarity with physical goods.[33]
One extreme possibility is to treat all transmission on the internet as goods which GATT discipline applied to them. Such a point of view is accompanied by the imposition of customs duties on the transmission. However, the WTO E-commerce Declaration included a statement that members to ‘…. Continuities their current practices of not imposing customs duties on electronic transmissions (the WTO Duty-freedom Moratorium on Electronic Transmissions).[34] This is because the national treatment and MFN statutes are general obligations under the GATT, which, under the national treatment rule, members must not accord discriminatory appropriate treatment between imports and like domestic products with the exception of the imposition of tariffs. Members would give up their rights to discriminate against Internet imports as far as domestic taxes are concerned.[35]
There is an opposite hard line, in which we could leave both GATS and GATS and develop an entirely new obligation for e-commerce. Nevertheless, some argue that Internet services, including Internet service providers and telecommunication providers, are already subject to the GATS and Annex of Telecommunications. As such, the rules necessary to regulate can be found in GATS or GATT.
In some situations, the transmission becomes physical goods such as a book or a CD. For example, the recipient of digital content may store it in a digital medium, read books on the screen, and listen to music directly on the computer.
Accepting the cross-border definition has the key advantage of minimizing possible disputes that may arise from countries that have certain transmissions classified as tangible goods or services.
In any electronic commerce dispute, the decision should determine whether the object of the dispute is a good or service. Consequently, the GATT or GATS obligation will apply. Imposing a domestic tax as long as the cost of the electronic transmission is lower than that of physical delivery can be a solution for developing countries. However, electronic transmission still offers a price lower than that available at cross-border physical delivery.
In developing countries, most consumers do not have computers or Internet access to use digital content transmitted around the network. In these countries, most independent entrepreneurs receive the product through the Internet, convert it into physical form, such as software or a music CD, and then sell it to consumers. However, these activities will add some additional cost to the product.
As Panagaria argued:[36] if music or any digital content is transmitted electronically without any tax paid to cross the border, then entrepreneurs import it electronically and convert it from digital form into a CD or a physical good, then sell them to consumers, the marginal cost of conversion, production and distribution are positive and leading to make the trade inefficient.
However, he suggests two solutions for the above problem. First, by eliminating the tariff on physical delivery, countries could achieve the efficiency they lose due to the lack of telecommunication infrastructure.
Second, a member of the WTO can choose to impose a higher domestic tax on digital content supplied on the Internet, equal to the tax on physical delivery.
At present, imposing a tax on digital content on the internet is not enforceable. Consequently, the only way to impost customs on a service or digital goods imported through the network is through domestic tax.
There is a difference between GATT and GATS from the viewpoint of efficiency. According to the GATT principles in the multilateral trading system, physical delivery is subject to a few custom duties, or if the WTO member is a signatory of ITA, quotas or custom duties are not permitted. However, quotas or other market access barriers are permitted under the GATS principles about the same content.[37]
Regarding technical standards and other regulatory measures point of view, the GATT offers a variety of regulatory disciplines that do not exist under the GATS.[38] These regulatory principles under the GATT help to ensure that national regulations do not create any barriers to trade.[39]
The GATT offers an agreement on Subsidies that a government forbids to involve a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees)[40]. There is no such similarity in GATS principles in which subsidies have been introduced; consequently, the conclusion of such a GATS agreement is not imminent.[41]
Therefore, the GATS does not have any agreement on anti-dumping, safeguard measures, trade-related investment[42] or rules of origin. The GATT principles have an agreement on subsidies, anti-dumping, emergency safeguard rules and an Agreement on trade-related investments.
Safeguarding the Technology in the WTO agreements:
The US and some software producer companies fear that the software and related products, which are traded under the GATT provision, could now fall under underdeveloped GATS.[43]
Accordingly, in the GATT, article IV on “Screening quotas for films and the indirect treatment of software via the ITA seems to indicate that until today, content has been treated under GATT.”[44] In practice, it is not stated anywhere that the GATT applies only to physical goods. Hence, it could not be necessary to reclassify from GATT to GATS because of a new method of distribution of software or music products.[45]
Furthermore, it is expected to classify the cross-border transmission of digital goods in order to produce CDs as a separate service transaction.[46]
The GATT principles allowed members to impost custom duties where members had not set their customs to nil. This principle applies to most WTO members that have signed the ITA, including software.
As the US argues, trade is more liberal under the GATT[47] principles rather than the GATS.[48] Moreover, the US argues digitally delivered products, such as music do not have the same characteristics as services. They are not consumed after being used, and unlike the service characteristic, the production and consumption of the service are not at the same time. Therefore, digital products have two sides: 1- The characteristic of durability and inseparability from a physical provider to digital transferred products constitute a good rather than a service.[49] Furthermore, The United States supported the classification of audiovisual products as goods according to the historical characteristics of the film sector within GATT.[50]
On the contrary, the EU argues that digitally delivered content consists of service which is governed by GATS provision. According to the EU, “WTO Members’ schedules generally only list physical goods according to their physical characteristics. And the GATT schedules have never covered any information digitized into bits and sent across a border through a telecommunications network, directly from the supplier to the customer.” [51] Moreover, members of the WTO have abstained from applying the GATS provision to telecommunications crossing the border even if the telecommunications network was carrying the same information. Accordingly, the EU on Work program on E-commerce stated: “This shows again that WTO Members have never wished to treat transmission of digitized information under the GATT, and the GATT schedules indeed do not cover it.”[52]
In the long term, GATS is more liberal and efficient than GATT[53]:
According to the EC, members of the WTO have always identified products, which can be goods or services, first and then negotiated market access for them. Consequently, they can apply GATS or GATT principles. 54 Moreover, parties should not “parties have always identified items first and then negotiated market access for them” 55 at the discussion stage.
According to the EU, the GATT is currently the most liberal trade mechanism with respect to content. Certainly, “at the moment, the GATT generally provides a more trade liberal framework”[54].
As a result, the GATS covers four modes of supply, while the GATT only apply to cross-border delivery. As Sacha Wunsch-Vincent assumes, in the future, “specific GATS commitments are offered, far greater liberalizing-effect may be achieved than under GATT.”[55] Moreover, the GATT does not define the regulatory dimension of market entry for service industries.[56]
In addition, the GATS “rule on transparency, domestic regulation and subsidies is also likely to evolve in the future through time.[57]”
Accordingly, the fact that the US chose the GATT classification can explained by two reasons: 1- “The more far-reaching dimension of GATS has not been sufficiently taken into account. 2- The supporters of GATT classification prefer to rely on existing free trade commitment under GATT, rather than on uncertain future GATS commitment”.[58]
Arguably, if a member of state wants to make a commitment under a set of rules, the member may classify the product based on its own political situation.[59]
On the other side, the EU supported the argument that only a GATS classification would make sense32. As will be shown below, the WTO members produced working papers on this central question; a decision, however, was not reached.[60]
The European Union case Law and the WTO, GATS or GATT?
One of the regional trading organizations is the European Union, which can help the WTO to find out the boundaries between goods and services.[61] The Treaty of Rome established the European Union in 1997 for trade purposes.[62] Still, the central aim and object of the European Union is four elements, which are freedom of the internal market such as goods[63], services[64], people[65], and capital[66]. Accordingly, there is a similarity between the European Union and the WTO, which both are trying to deal with and resolve the trade issue. However, it needs to be discussed, to what extent does the distinction between goods and services have any difference in the context of the European Union?
The boundary between the definition of goods and services is not clear under the European Union provision; for example, The recent telecommunication directive included five harmonizing directives based on Article 95, which these directives are the internal market provisions rather than the service provisions.[67] It is not clear why Telecommunication, which is clearly considered a service, has come under the internal market provision. By contrast, “the Television Without Frontiers Directive,[68] which concerns the creation of the internal market in television services, was based on Article 47(2) of the Treaty Establishing the European Community, that is, the provisions relating to services.”[69]
Nevertheless, Article 50 of Treaty Establishing the European Community defines the scope of “Services” but it is silent on the meaning of “goods” and it seems that ECJ has adopted a common approach to the meaning the goods.[70] However, It seems, the ECJ adopt a natural language base definition on the ability to trade an to transfer the product. Emphasis is also placed on the tangible nature of the product, implied by the use of word “object”.[71]
Generally ECJ noted where the service is the object of the transaction, the trade is subject of article 49, “even though the TEC specifies that the services provisions are residuary in character.” [72]
Distinguishing Between Goods and Services
Drawing the boundary between goods and services for regulatory purpose is base on theory that products comprising “goods” differ fundamentally from those constituting “services.”
According to Article 3(2) of the Understanding on Rules and
Procedures Governing the Settlement of Disputes (the “DSU”) the WTO rules can be interpreted “in accordance with customary rules of public international law.” Article 31(1) of the Vienna Convention noted that “a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.”[73]
The Oxford English Dictionary defines “goods” as “saleable commodities; merchandise [or] wares, or property or possessions”[74] and Encyclopaedia Britannica defines goods as “any tangible commodity purchased….[75]” And “Merchandise” is defined as “the commodities of commerce” or “goods to be bought or sold,”[76] Longman Contemporary English define goods as “things which are carried by road, train etc and things which are carried by road, train etc”[77] in contrast, “services” are defined as “the sector of the economy that supplies the needs of the consumer but produces no tangible goods.”[78]
The Oxford English Dictionary’s definition of goods implied that the product must be tangible and in physical form; in contrast, the definition of service shows that services are intangible and should be consumed immediately.
Therefore, it is suggested that the product should be tradable or saleable[79], and to satisfy this characteristic, the goods should be able to “transform from one party to another and have the capability of commercial transactions.” [80]
Focusing on both these elements in the “services” definition mirrors the Oxford English Dictionary’s characterization of “trade” as a transaction where products are bought and sold for profit.251 For a product to satisfy the “traceability” characteristic, it must be
transferred from one party to another (the transfer element)252 and also be capable of being the subject of a commercial transaction (the commercial capability element).[81]
goods and services, whereas “tradability,” in this context, makes a distinction between those products which can be classed as goods or services and all other products which do not fall into either the goods or services definition at all.[82]
Despite initial objections from the United States to the classification of the sector as involving trade in services,260 the audiovisual sector is currently subject to discussions
within the context of the GATS negotiations.[83]
The economics literature indicates that the essential character of a product, whether goods or services, is inextricably linked to its tangibility.
Television services provided by SKY & TIVO allow the consumer to pause the live TV feed and then restart the programme when they are ready to watch it. While it can be argued that this is an exception to the instantaneous consumption example, in reality, the television signal is still transmitted in real-time, but the technology records the relevant program, and then the consumer watches the recording and not the live TV per se[84]
Although services’ intangibility means it is difficult to possess the service per se, the consumer can still have physical evidence of the existence of the service or legal evidence of their right to receive it. Physical existence can occur in three ways. First, after the provision of the service, physical evidence may exist demonstrating that the service has been received. For example, when a consumer receives a haircut, the receipt of the service is evident as the hair is shorter. Second, physical evidence of the service may be available before it is provided to indicate that the consumer has the right to receive that service. A legal document, such as a contract or receipt, may fulfil this function. A third, more complex situation may arise as in the case of pay television, where the consumer must subscribe to a package first and obtain a decoder card and box before they can access the television signal sent by the broadcaster.[85]
Where the product’s function is to form the subject matter of the transaction, the product will be goods because its possession is enough to transfer ownership from the producer to the consumer. For example, the sale of a chair is clearly goods because the transfer of
ownership requires control over the physical possession of a chair. In contrast, when purchased independently, the pay-television decoder and satellite dish may be goods. Still, they are services when purchased as part of a contract to acquire access to the relevant television package. [86]
Based on the natural language and economic literature, two concepts seem to underpin the products captured by the WTO: traceability and tangibility.
GATS or TRIPS
It is argued that the trade of digital goods concerns intellectual property that is not included in either goods or services categories; thus, digital trade is for licence fees or royalties payment, which concerns intellectual property.[87]
Australia notes that: “ even when a consumer “purchases” a product, such as a music CD or a software application on CD-ROM, the true legal nature of the transaction is somewhat different from a simple purchase of a physical product. What is really happening is that the consumer is taking out a limited licence to use a sound recording…”[88]
The purchase of a cross-border program or software, whether delivered on the Internet or on a CD, is, in fact, the purchase of the licence to use the software, which remains in the possession of the intellectual property right holder. Accordingly, some members of the WTO argue that the trade of a CD or trade on the Internet could be considered a trade in Intellectual property, which falls under the Trade in Intellectual Property Rights provision.
However, applying the TRIPS provision, which has complex standards to protect intellectual property, is not a solution. TRIPS provision neither grants market access nor free trade.[89]
GATS: which mode of supply? Mode 1 or Mode 2
Existing Commitments and the GATS
If members of the WTO agree on the GATSS classification, it is not clear what mode of supply would be fall. The WTO work programme on E-commerce considered whether cross-border transactions are covered by the GATS commitment provided during the Uruguay Round. The US and European Community agree that the current GATS commitment may apply to
Council for Trade in Goods: Aspects of e-commerce relevant o the GATT and other
WTO Agreements affecting trade in goods (CG, Agreement on Technical Barriers to Trade, Agreement on Antidumping, Agreement on Rules of Origin) include Market access, customs valuation, import license procedures, customs duties, technical standards, rules of origin, and classification.
Council for Trade in Services: The treatment of e-commerce in the GATS legal framework include:
Scope (Include modes of supply), MFN, Transparency, increasing participation of developing countries, domestic regulation, competition, protection of privacy and public morals and prevention of fraud, market access and national treatment commitments on electronic supply of services, access to and use of public morals and prevention of fraud, market access and national treatment commitments on electronic supply of services, access to and use of public telecommunications transport networks and services, customs duties, and classification.
Council for Trade-related Aspects of Intellectual Property Rights:
Intellectual property issues arising in connection with e-commerce include protection and enforcement of copyright and trademarks and access and use to/of new technologies.[90]
The General Council forwarded the progress reports to the Seattle Ministerial Conference in 2001.[91]
But even this majority view was challenged as a number of developing country Members questioned the extent to which e-commerce came within the scope of the WTO rules.”‘ In other contributions to the Work Program, Members have wondered whether a new WTO framework of general principles, for example, a ‘reference paper for e-commerce’, needs to be created.”[92] Such a reference paper could address cross-sectoral issues like the classification of digitally-delivered content products, including general objectives like nondiscrimination, better market access and national treatment commitments for relevant Goods and services, and a regulatory discipline for e-commerce that ensures transparency, non-discrimination, least-trade restrictiveness and other key objectives.[93]
Some areas have been identified that need additional clarification as to how current rules should be applied in particular circumstances. The treatment of digitally delivered content products was central to these unresolved questions. In practice, the Council for Trade in Services developed a list of issues to be examined.[94]
Council for Trade in Goods:
Delegations agreed that goods sold or marketed electronically but delivered physically across borders were subject to the GATT and could be subject to customs duties. Some Members thought the Information Technology Agreement (ITA) was an important contribution to promoting e-commerce by providing less expensive access to e-commerce-related products.
Council for Trade in Services:
It was the general view that:
The electronic delivery of services falls within the scope of the GATS since the agreement applies to all services regardless of the means by which they are delivered ……………………..
The parties that could especially benefit from E-potential are small and medium-sized enterprises, which are thus able to sell their goods and services on the world market. OECD 1999b
Consonantly, in particular, developing nations may profit from tapping the potential behind e-commerce. Aitic, 199, ITU, 1999.
Therefore, access to the internet and perfect telecommunication is highly necessary for the residents of a country. Access to the Internet is subject to the level of development of the telecommunications services. In the villages of many developing countries, basic telecommunications services do not even exist. For example, people in Afghanistan do not even have the necessary hardware for telecommunication, and the route for simple telecommunication does not exist. Telecommunications services should be introduced to encourage trade on the net in these villages. However, even where telecommunications services exist, additional hardware, such as ISP equipment, is needed.
As Arvind Panagaria in his article “ E-Commerce, WTO and Developing Countries” has discussed, three principles on WTO provisions govern access to communications networks: “GATS Article VIII on monopolies and exclusive service suppliers, GATS Annex on Telecommunications and the Reference Paper on regulatory principles in the Agreement on Basic Telecommunications. In addition, specific commitments on national treatment and market access made by countries in the basic telecommunications sector have implications for access to the Internet”[95].
Telecommunication and Developing Countries under the General Agreement on Trade in Services
Increasing participation of developing countries (Article IV)
Article IV required Developed countries to help developing countries by, inter alia, strengthening their domestic services capacity, which includes telecommunication services. Therefore, developing countries need to undertake domestic reforms[96]. Industrial countries can help develop telecommunication services by encouraging and increasing the participation of developing countries in telecommunication standardization activities.[97] they can regulate competition and liberalize the market to achieve this aim. As we can see, “Telecommunications is the classic example of a natural monopoly due to huge fixed costs and the very low marginal cost of services.”[98]
Also, Article IV of the GATS provides access to technology, which is an important element for increasing the participation of developing countries in the services negotiations.[99] Therefore, Article IV of the GATS has the general obligation to increase participation of developing countries in the world trade through “negotiating specific commitments . . . relating to:” [100]
“the strengthening of their domestic services capacity and its efficiency and competitiveness, inter alia through access to technology on a commercial basis, the liberalization of market access in sectors and modes of supply of export interest to them.”[101]
Members from developed countries and some members from developing countries have been asked to establish contact points within two years …to facilitate the access of developing country members to information, concerning: “1-commercial and technical aspects of supply of services; 2- registration, recognition and obtaining of professional qualifications; and 3- the availability of services technology”[102]
Therefore, the Mexico case is very important because it was the first case which was about telecommunication industry. However, as we can see, Mexico relied on article IV paragraph 1(a) of the GATS and in particular, the Panel examined Mexico’s arguments that commitments of such members have to be interpreted in the light of Article IV of the GATS.[103]
Domestic Regulations
Market access is of prime importance for free trade regulations. In fact, GATS is seeking trade liberalization to create a safe environment for global trade that will help develop E-commerce.
To prevent a member from introducing regulations to increase trade barriers, the “Council for Trade in Services adopted Disciplines[104] on Domestic Regulation in the Accountancy Sector”[105] [106]. In other words, members can not introduce regulatory measures to the Internet world.
Article VI of GATS helps developing countries to get the same recognition of standards enjoyed by other members in a specific area. Professor Arvind Panagariya gives an example: “The United States may recognize accountancy degrees from Europe but not India. This could signal potential buyers that it is hazardous to buy accountancy services in India even though the latter may be capable of supplying them competitively”[107]
Therefore, Under Article VI (3) of the GATS, members are required to measure general application and to “ensure authorization procedures are handled[108]” for the supply of a service within a reasonable period of time[109]. Obviously, “such commitments apply to licensing procedures for the provision of telecommunication services.”[110]
Competition and the GATS
So far, the WTO has planned for all members to have access to E-commerce. This means that the WTO wants to ensure access to telecommunication services by its members, which can lead to the expansion of their Electronic trade. Article VIII has protected members from suppliers who want to monopolize network technology. Article VIII has limited members who possess certain technologies, such as phone lines or the like, to abuse their monopoly.
In accordance with Article II of the GATS, known as general obligations, “each Member shall accord immediately and unconditionally to services and service suppliers of any other member treatment no less favourable[111] than that it accords to like services and service suppliers of any other country.”[112] However, a member may maintain a measure inconsistent with providing such a measure is listed and meets the conditions of the Annex on Article II Exemptions[113].
There are some arguments about the most favoured nations. It has been argued that in many competitive markets, the amount an incumbent operator charges for the termination of international calls varies significantly in different originating jurisdictions. However, each member is required that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that member’s obligations concerning the “most favoured nation” principle under Article II of the GATS and specific commitments.
Article VIII, which applies to all services, is designed to deal with monopoly suppliers who can potentially frustrate a member’s MFN and specific market access commitments. For instance, suppose a single entity owns telephone lines in a member country, and that member makes market access commitments to other countries for the provision of Internet services. Article VIII requires this entity not to limit access to phone lines by service suppliers from other Members or discriminate among them. It also requires this entity to ensure that the commitments made by the members in other service sectors are not frustrated. Article VIII is limited in its application to cases where a monopolist supplies the service in question[114].
It is specified in Article IX (Business Practices) that if a member recognizes a supplier’s action to restrain trade in service,[115] at the request of any other member, it shall enter into consultations to eliminate those practices.[116] Therefore, Article IX required members “to accede to any request for a consultation with any other member concerning such practices to eliminate them” 117 and also to cooperate and to provide non-confidential information.
Annex on Telecommunications of the GATS
When Members adopted GATS, they also adopted a Supplementary Annex on Telecommunications. In the Telecommunication Annex, the position of the Members “with respect to measures affecting access to and use of public telecommunications transport networks and services[117]” has been clarified. We can also see further competition provisions in the Annex.[118]
“Moreover, the Telecommunication Annex can be seen as a general insurance policy for suppliers of other services that they would have access to the incumbent networks of the WTO Members.”[119]
Under paragraph 4 (Transparency) of the Annex, each Member is required to impose an obligation of transparency of information on conditions affecting access to and use of public telecommunications transport networks and services, including tariffs and other terms and conditions of service; specifications of technical interfaces with such networks and services.[120]
Paragraph 5 of the Annex emphasizes that access should be reasonable and (non-discriminatory). The term “non-discriminatory” refers to the most favoured nation and national treatment as defined under Article II of the GATS.[121]
Therefore, any member’s telecommunications service suppliers are permitted access to and use any public telecommunications transport network or service offered within or across the border of that Member, including private leased circuits.[122] Under Paragraph 5 of the Annex, service suppliers have to provide access to the use of any public telecommunications transport network or service offered within or across the border of that Member and private leased circuits. Furthermore, access to the leased lines must be guaranteed, and suppliers can use the service supplier’s operating protocols.
Under Article 5(E), “Restriction on access and use must be necessary to ensure public availability of the network it service, networks or service integrity, or the enforcement of the commitments made in the GATS schedules.”[123]
Under Paragraph 5(g), a Developing country may place reasonable conditions on access to and use of public telecommunications transport networks and services necessary to strengthen its domestic telecommunications infrastructure[124].
The obligation of the Annex applies not only to service providers but also to those in the telecommunication sector who compete with national incumbent operators.
Furthermore, the Annex never clarifies the distinction between basic and value-added telecommunication services. Value-added services include online data processing, such as e-mail and voice mail, while basic services include negotiations regarding real-time communications of customer-supplied information, such as voice telephony.
The Reference paper
WTO members agreed on competition rules. The Members that are part of the Agreement on Basic Telecommunications Services managed to agree on a set of specific regulatory principles. It requires members to ensure that anti-competitive practices do not compromise the commitment of other members. These principals are named Reference Papers. Then, this commitment modifies any existing submissions made by Members and is annexed to the existing Schedules through a device referred to as a protocol.[125] This protocol constitutes the Fourth protocol.
The Reference Paper contains some measures to “prevent suppliers unilaterally or collectively from engaging in or continuing anti-competitive practices.”[126] It seems the reference Paper considered the abuse of dominant, which is referred to in the Reference Paper as an anti-competitive practices term that is prohibited in Paragraph 1. [127] However, the reference Paper contains some principles which are not mere guidelines, “but represent binding commitments, which means that their inadequate implementation is changeable through the WTO Dispute Settlement System[128]”. So far, there has been no request from any WTO panel or Appellate Body decisions interpreting the Reference Paper; however, in Mexico’s case, The US government requested from the Panel compatibility with WTO law of certain Mexican measures[129]. However, Mexico failed to ensure that Mexican incumbents provide interconnection to US suppliers on reasonable rates, terms and conditions, as required by Mexico’s commitment under Section 2 of the Reference Paper.[130]
Reference Paper is divided into six paragraphs or headings. The first two paragraphs apply to the Major provider.
The Reference Paper has defined the major supplier under section one, “Definition,” as: “A major supplier is a supplier which has the ability to materially affect the terms of participation (having regard to price and supply)in the relevant market either due to control over essential facilities or use of its position in the market.”[131] The definition of Relevant Market and position of the market is ambiguous; there is a contrast between the definitions given in the EC leased –Lines Directive and the definition of Dominance under the EC Framework Directive, which extended the definition of dominance in the Case of United Brands[132]. Under Article 14 (2) of the Framework Directive, Dominance is defined as: “An undertaking shall be deemed to have significant market power if, either individually or jointly with others, it enjoys a position equivalent to dominance, that is to say, a position of economic strength affording it the power to behave to an appreciable extent independently of competitors, customers and ultimately consumers”[133]. However, the dominant position in a relevant market under the new framework has been defined when the market share exceeds 40% compared to the previous criteria, which is 25%.[134], the reference paper seems to be used to define the relevant market, and its position is based on the Framework Directive.
Paragraph 2 of the Reference Paper contains a set of requirements for Interconnection[135]. The aim of Paragraph 1 is to protect major suppliers from engaging in anti-competitive practices. To, Reference Paper states that :
- Interconnection must be provided under non-discriminatory terms, conditions (including technical standards and specifications) and rates and of a quality no less favourable than that provided for its like services or for like services of non-affiliated service suppliers or for its subsidiaries or other affiliates;
- It must be provided in a timely fashion and on terms and conditions (including technical standards and specifications)
- It provided cost-oriented rates
- The terms and conditions must be transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided;
- Interconnection must be provided “upon request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.”[136] [137]
The last Four headlines deal with general regulatory issues, such as
- Universal Service: Paragraph 3 138, which is about Universal Service, requires Members to define the kind of Universal service obligation they wish to maintain. Such obligations provided that “they are administered in a transparent, non-discriminatory and competitively neutral manner and are not more burdensome than necessary for the kind of universal service defined by the Member.”[138]
- Licensing: Paragraph 4 requires members to request the telecommunication incumbent for a license, they have to make public: “(a) all the licensing criteria and the period of time normally required to reach a decision concerning an application for license and (b) the terms and conditions of individual licenses”[139]. However, The Reference Paper does not define where a license may be required.
- Independence of the Regulator: Paragraph 5 requires the Member “regulatory body is separate from any supplier of basic telecommunications services.[140]”
- Allocation of Recourses: Under Paragraph 6 (Allocation and use of scarce resources), “the procedures for the allocation and use of scarce resources, will be carried out in an objective, timely, transparent and non-discriminatory manner[141].”
Conclusion
E-commerce is very important for countries. It is becoming very important and plays a significant role in the economics of countries. Access to the Internet is becoming important in order to develop E-commerce for Countries.
The link between e-commerce and WTO is very close because of the digitalization of products and contents such as books, media, information, and services. Furthermore, Not only are digital goods important, but also telecommunication between businesses is also important for Members. Another aspect of the WTO is telecommunication services. The Liberalization of the telecommunication sector establishes an infrastructure for e-commerce; in other words, Members can do e-commerce when they have telecommunication infrastructure. WTO examines infrastructure requirements for e-commerce.
Obviously, the liberalization of the telecommunication service is considered. WTO members, along with the Annex on Telecommunications or Reference paper and Fourth Protocol, will protect telecommunication providers with liberalization and anti-competition regulations. Also, the GATS wants to develop telecommunication between Members, especially developing countries, with liberalization and protection of the domestic market and anti-competitive trade.
Bibliography:
Books and Article
Electronic Commerce law and Practice , Third Edition, Michael Chissick and Alistair Kelman ,
Global Electronic Commerce and the General Agreement on Trade Services: The “Millennium Round” and Beyond, William J.Drake and Kalypso Nicolaidis
Doha Declaration
http://www.wto.org/english/tratop_e/ecom_e/ecom_briefnote_e.htm
Electronic Commerce in Developing Countries, Issues for Domestic Policy and WTO Negotiations, Cathrine L.Mann, Institute for International Economics, March 2002
E-commerce, WTO and developing Countries, Arvind Panagaria, May 3, 1999.
WORLD TELECOMMUNICATION STANDARDIZATION ASSEMBLY, Florianópolis, 5-14 October 2004 , Resolution 17 – Telecommunication standardization in relation to the interests of developing countries
Trade in services – the impact on developing countries, James Hodge, DPRU, University of Cape Town, Hildegunn Kyvik Nordas, CMI
Telecommunication Law, Edited by Lan Walden & John Angel, Blackstone Press, 2001,
“Levelling the Playing Filled: Is the World Trade Organization Adequately Equipped to Prevent Anti- Competitive Practice in Telecommunications?” Damien Geradin and Michel Kerf, The World Bank.
E-Commerce: contributions to the WTO ,WORK PROGRAMME ON ELECTRONIC COMMERCE Progress Report to the General Council adopted by, the Council for Trade in Services on 19 July 1999 E-Comerce & WTO
E-Commerce & WTO Digitalizing Trade Liberalization, YOUSAF HAROON MUJAHID
Constructing an Effective Dispute Settlement System: Relevant Experiences in the GATT and WTO, Rosine M. Plank-Brumback http://www.sice.oas.org/tunit/studies/dispute/tu5disp.doc
http://europa.eu.int/comm/trade/services/ecommerce/ecom8.htm
Law and cases
GATS
MEXICO – MEASURES AFFECTING TELECOMMUNICATIONS SERVICES, Report of the Panel, 2 April 2004, WT/DS204/R,
http://www.wto.org/english/res_e/booksp_e/analytic_index_e/gats_02_e.htm#fnt24
The adopted Disciplines: S/L/64
case “BELGIUM ‑ MEASURES AFFECTING COMMERCIAL TELEPHONE DIRECTORY SERVICES”, complaint by the United States (WT/DS80/1)
Telecommunication Annex of the GATS
The Reference Paper:
Marco C. Bronckers and Pierre Larouche. Telecommunication Services and the WTO.
Journal of World Trade 31 (1997) Supra note 63 at 23
Case 27/76 United Brands v Commission [1978] ECR207
DIRECTIVE 2002/21/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 7 March 2002, Framework Directive
The European Commission Guideline, (2002/C 165/03) Paragraph 75
Leased line Directive 94/44/EC
A central conclusion of the book is that only very few of the identified negotiation requirements have been satisfactorily met at the multilateral level. It is demonstrated that the coverage of digital content products by WTO rules remains at best uncertain and that free trade in digital content has not yet been secured. Moreover, although some modest progress could be achieved in the framework of US preferential free trade agreements, the latter are unlikely to be able to lock in free trade for digital content. Prompt and decisive efforts by the WTO in the current negotiation round are therefore imperative.
In conclusion, as new technologies are an increasingly prominent source of trade disputes (see the recent US-Antigua Internet Gambling case), this book is a pragmatic assessment of how WTO Members can maintain the relevance of the multilateral trade framework in a changing technological and economic environment. Given the lack of an in-depth treatment of these issues in the existing academic literature, it is clearly a highly important contribution and will become compulsory reading for anybody interested in this subject area – academics, policy practitioners and members of the business community alike. Martin Gedult v. Jungenfeld
Fote Notes:
[1] The WTO, internet book page 3,
[2] OECD (2003b, 2004a, b).
[3] Ibid
[4] General Council, Work programme on Electronic Commerce: Adopted by General Council on 25 September 1998, WT/L/274 (30 September 1998) , General Council work Programme on Electronic Commerce, para 1.3.
[5] Electronic Commerce in Developing Countries, Issues for Domestic Policy and WTO Negotiations, Cathrine L.Mann, Institute for International Economics, March 2002
[6] See http://www.wto.org/english/tratop_e/ecom_e/mindec1_e.htm for the declaration. Also, WTO, “Work program on electronic commerce,” Adopted by the General Council on 25 September 1998,
[7] http://www.wto.org/english/tratop_e/ecom_e/ecom_briefnote_e.htm
[8] paragraph 34 of the Doha Declaration.
[9]paragraph 34 of the Doha Declaration.
[10] http://www.cid.harvard.edu/cidtrade/issues/ecommerce.html
[11] A Call for a WTO E-Commerce Initiative by Heinz Hauser & Sacha Wunsch-Vincent, International Journal of Communications Law and Policy. Issue 6, Winter 2000/2001, page 9
[12] A Call for a WTO E-Commerce Initiative by Heinz Hauser & Sacha Wunsch-Vincent, International Journal of Communications Law and Policy. Issue 6, Winter 2000/2001,, Page 6.
[13] Columbia Journal of European Law, Issue 12.1, A distinction without a difference: exploring the boundary between goods and services in the world trade organization and the European Union, Fiona Smith.
[14] GATT and GATS are using different system which GATT use the Harmonized description and Coding System (HS). See A Call for a WTO E-Commerce Initiative by Heinz Hauser & Sacha Wunsch-Vincent, International Journal of Communications Law and Policy. Issue 6, Winter 2000/2001, 14, page 19 and the International Convention on the Harmonized Commodity Description and Coding System, June 14, 1983, as amended by Customs Cooperation Council Recommendation, June 25, 1999, entered into force Jan. 1, 2002, http://www.wcoomd.org/ie/En/Topics_Issues/topics_issues.html. (date 28 February 2007)
[15] E-commerce, WTO and developing Countries, Arvind Panagaria, May 3, 1999. Page 1
[16] “……If it is possible to classify a product as both goods and services, then a member may classify the product based on historical imperatives rather than on a conscious decision based on the benefits of classifying a product ….” See A Call for a WTO E-Commerce Initiative by Heinz Hauser & Sacha Wunsch-Vincent, International Journal of Communications Law and Policy. Issue 6, Winter 2000/2001,, Page 22.
[17] The WTO has been established in 1 January 1995. Final Act Embodying the Result of the Uruguay Round of Multilateral Trade Negotiations.
[18] The GATT. Part 2, Article III(2): “…. No contracting party shall otherwise apply internal taxes or other internal charges to imported or domestic products in a manner contrary to the principles…..” and 3(4): “The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favorable than that accorded to like products of national origin in respect of all laws…”
[19] GATT, Article XX (general Exceptions). Article XIX (Emergency Action on Imports of Particular Products), (a): “….any product is being imported into the territory of that contracting party in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products, the contracting party shall be free…”
[20] GATT article XX.
[21] See Appellate Body Report, Canada-Certain measure Affecting the Automotive Industry, WT/DS139/AB/R and WT/DS/142/AB/R (31 May 2000) adopted 19 June 2000. Panel refused to analyse the scope of the definition of the scope of “Trade in Services” under GATS article II(1). On this case, According to the panel’s interpretation, “It is the nature of the violation that determines whether GATT or GATS applies.” Ibid 15, Page 12. GATS article I: (Scope and definition), “For the purpose pf this Agreement, trade in services is defined as the supply of the service.”
[22] The definition of ECJ about services and mode of supply is very similar to the GATS. ECJ stated: “the freedom to provide services includes the freedom, for recipients of services, to go to another Member State in order to receive a service there, without being obstructed by restrictions, even in relation to payments . . . tourists, persons receiving medical treatment and persons traveling for the purpose of education or business are to be regarded as the recipients of services.” Case 186/87, Cowan v. Trésor public, 1989 E.C.R. 195, paragraph 16.
[23] GATS, Article I(2)(a)
[24] GATS, Article I(2)(b) “refers to situations where a service consumer (e.g. tourist or patient) moves into another Member’s territory to obtain a service”: http://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm (Date: 28/02/07)
[25] GATS, Article I(2)(c)
[26] GATS, Article I(2)(d) and see, A Call for a WTO E-Commerce Initiative by Heinz Hauser & Sacha Wunsch-Vincent, International Journal of Communications Law and Policy. Issue 6, Winter 2000/2001 page, page 10.
[27] C JEL, Issue 12.1, A distinction without a difference: exploring the boundary between goods and services in the world trade organization and the European Union, Fiona Smith & Lorna Woods, Page 17.
[28] C JEL, Issue 12.1, A distinction without a difference: exploring the boundary between goods and services in the world trade organization and the European Union, Fiona Smith & Lorna Woods, Page 17.
[29] Mexico—Measures Affecting Telecommunications Service, WT/DS204/R
[30] Ibid 34. and see, C JEL, Issue 12.1, A distinction without a difference: exploring the boundary between goods and services in the world trade organization and the European Union, Fiona Smith & Lorna Woods, page 18.
[31] Canada—Certain Measure Affecting the Automotive Industry,
[32] Columbia Journal of European Law, Issue 12.1, A distinction without a difference: exploring the boundary between goods and services in the world trade organization and the European Union, Fiona Smith & Lorna Woods, page 18
[33] C JEL, Issue 12.1, A distinction without a difference: exploring the boundary between goods and services in the world trade organization and the European Union, Fiona Smith & Lorna Woods, page 18
[34] WTO, the Geneva Ministerial Declaration on Global Electronic Commerce, WT/MIN (98)/DEC/2 (20 May 1998) [WTO E-Commerce Declaration].
[35] CJEL, Issue 12.1, A distinction without a difference: exploring the boundary between goods and services in the world trade organization and the European Union, Fiona Smith & Lorna Woods, Page 17.
[36] E-commerce, WTO and developing Countries, Arvind Panagaria, May 3, 1999. Page 1
[37] E-commerce, WTO and developing Countries, Arvind Panagaria, May 3, 1999. Page 8, and see The WTO, The internet and Trade in Digital Products: EC- US perspectives, Sacha Wunsch-Vincent, Hart Publishing 2006, page 53 or see, Work program on Electronic Commerce, Submission from the US, WT/GC/16 (12 February 1995). Page 5.
[38] The WTO, The internet and Trade in Digital Products: EC- US perspectives, Sacha Wunsch-Vincent, Hart Publishing 2006, page 54
[39] The WTO, The internet and Trade in Digital Products: EC- US perspectives, Sacha Wunsch-Vincent, Hart Publishing 2006, page 54
[40] The WTO Agreement on Subsidies and Countervailing Measures: Article 3, Paragraph 1 (a): For the purpose of this Agreement, a subsidy shall be deemed to exist if: (i)a government practice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees)
[41] commerce, WTO and developing Countries, Arvind Panagaria, May 3, 1999. Page 1
[42] Investment may be covered under GATS Mode 3., See The WTO, The internet and Trade in Digital Products: EC- US perspectives, Sacha Wunsch-Vincent, Hart Publishing 2006, page 53
[43] Business Software Alliance, 2001a
[44] Ibid 21
[45] Ibid
[46] Gats 2000: New Directions in Services Trade Liberalization (Paperback) by Pierre Sauve, Robert M. Stern, Brookings Institution,U.S. (1 Feb 2000) page 399
[47] GATT, Article IV: Special Provisions relating to Cinematograph Films
[48] GC Work program on Electronic Commerce, Submission from the US, WT/GC/16 (12 February 1995). Page 5. US argues some electronic content can certainly be characterized as a service, such as electronic greeting cards, clip‑art, Web‑pages, Java‑based “applets,” and certain industrial designs might be created, distributed and used entirely within a network, without never acquiring a tangible form. But US argues it is not clear that any intangible products should be considered a service as some WTO Members classify “Electricity” as a good in their tariff schedules. Moreover it stated, there may be an advantage to a GATT versus GATS approach to such products which could provide for a more trade‑liberalizing outcome for electronic commerce.
[49] The WTO, The internet and Trade in Digital Products: EC- US perspectives, Sacha Wunsch-Vincent, Hart Publishing 2006, page 56
[50] The United States objected to the use of “European Independent Works” in the “Television without Frontiers Directive”. Council Directive of 3 October 1989 (on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities) 89/552/EEC, (OJ L 298, 17.10.1989, p. 23)
[51] Work Program on Electronic Commerce, Classification Issue, Submission from the European Communities, WT/GC/W/497 (9 May 2003) Paragraph 7
[52] Ibid paragraph 8 and see paragraph 9: “The fact that the customer may later put this digitized information on a physical support is irrelevant as the transaction only addresses the transmission of the content, as explained in several submissions so far.”
[53] Ibid 31, Page 59.
[54] Ibid 31, Page 59.
[55] Ibid.
[56] Ibid.
[57] Ibid.
[58] Ibid.
[59] A Call for a WTO E-Commerce Initiative by Heinz Hauser & Sacha Wunsch-Vincent, International Journal of Communications Law and Policy. Issue 6, Winter 2000/2001, page 23
[60] A Call for a WTO E-Commerce Initiative by Heinz Hauser & Sacha Wunsch-Vincent, International Journal of Communications Law and Policy. Issue 6, Winter 2000/2001, page 9
[61] Lorna ? page 27.
[62] Treaty Establishing the European Community art. 2, November 10, 1997. 1997 O.J. (C 340 3)
[63] Treaty Establishing the European Community articles 23-31.
[64] Treaty Establishing the European Community article 49.
[65] Lorna page 27…………………
[66] Treaty Establishing the European Community articles 56-60.
[67] Council Directive 2002/21/EC, 2002 O.J. (L 108) 33 (Framework Directive), Council Directive 2002/20/EC, 2002 O.J. (L 108) 21 (Authorisation Directive); Council Directive 2002/19/EC, 2002 O.J. (L 108) 7 (Access Directive); Council Directive 2002/22/EC, 2002 O.J. (L 108) 51 (Universal Service Directive); Council Directive 2002/58/EC, 2002 O.J. (L 201) 37 (Privacy and Electronic Communications Directive); Council Directive 90/387/EEC, 1990 O.J. (L192) 1 (ONP Directive) (Establishment of the Internal Market for Telecommunications Services through the Implementation of Open Network Provision). Network Provision). The previous ONP Directive was also based on Article 95.
[68] Council Directive 89/552/EEC, 1989 O.J. (L 298) as amended by Council Directive 97/36/EC.
[69] Lorna page 31
[70] Article 50 of The Treaty Establishing the European Community: “Services shall be considered to be “services” within the meaning of this Treaty where they are normally provided for remuneration,……….. “Services” shall in particular include:(a)activities of an industrial character; (b) activities of a commercial character;(c) activities of craftsmen;(d) activities of the professions.
[71] Case 155/73, Sacchi, 1974 E.C.R. 409. However in Case 7/68, Commission v. Italy, 1968 E.C.R. 423 , the word of product does not have the same meaning in ordinary language. See infra Part III- The Art Treasures case
[72] Lorna Page 42, see Case C-275/92, H.M. Customs and Excise v. Schindler, 1994 E.C.R. I-1039. And see Case C-42/02, Lindman, 2003 E.C.R. I-13519
[73] Lorna 48
[74] [1 A–M] The New Shorter Oxford English Dictionary on Historical Principles, 1116 (Lesley Brown ed., 1993) More definitions are: “movable property; money; livestock; items for transmission by rail.” And definition of item is “an individual thing, article, or unite included in a set, list, computation” Page 1430
[75] http://www.britannica.com/ebc/article-9361487 Date:8/04/2007
[76] [1 A–M] The New Shorter Oxford English Dictionary on Historical Principles, 1745 (Lesley Brown ed., 1993)
[77] Longman dictionary of Contemporary English, 2003
[78] [2 N–Z] The New Shorter Oxford English Dictionary on Historical Principles, 2788 (Lesley Brown ed., 1993) There are some other definition of services such as: “1- a position as a servant in the employment of a ruler or the state. 2- performance of the duties of a servant, work undertaken according to the instructions of an individual or organization. 3- an act or instance of serving, a duty undertaken for a superior. 4- the duty of a soldier, sailor, etc. the performance of this duty. 4- provision of a facility to meet the needs or the use of a person or thing. 5- the organized system of providing labour, equipment, et. To meet a public need such as health or communications. 6- expert advice or assistance given by a manufacturer or dealer to a customer after the sale of goods. 7- the provision of the necessary installation, maintenance, or repair work to ensure the efficient running of a machine, 8- the supply of a programs by a broadcasting organization.”
[79] [1 A–M] The New Shorter Oxford English Dictionary on Historical Principles, 1116 (Lesley Brown ed., 1993)
[80] Lorna page 49, it is stated the goods should have two elements: “ the transfer and the commercial capability”
[81] Lorna 50
[82] Lorna 50
[83] Lorna 52
[84] Lorna 52
[85] Lorna 54
[86] Lorna 55
[87] The WTO, the Internet and Trade in Digital Products: EC-US Perspectives, Sacha Wunsch-Vincent, HART, 2006 , Page 60
[88] Paragraph 13 in TRIPS Council, Electronic Work Programme, Submission from Australia IP/C/W/233 (7 December 2000)
[89] The WTO, the Internet and Trade in Digital Products: EC-US Perspectives, Sacha Wunsch-Vincent, HART, 2006 , Page 61
[90] Page 17. the WTO, internet……………………………………….
[91] GC, Minutes of Meeting: held 3 and 8 May 2000, WT/GC/m/45 (16 June 200)
[92] See GC, Communications from the Chairman, Interim Review of Progress in the Implementation of the Work Program on Electronic Commerce, WT,GC/24 (12 April 1999) para 10.2. See also Drake and Nicolaidis (2000) p 406. ( Book Page 19)
[93] Page 20 of book
[94] See S 2.3.2 and CTS E-commerce Report. And Page 20 of book
[95] E-commerce, WTO and developing Countries, Arvind Panagaria, May 3, 1999.
[96] Global Electronic Commerce and the General Agreement on Trade Services: The “Millennium Round” and Beyond, William J.Drake and Kalypso Nicolaidis
[97] WORLD TELECOMMUNICATION STANDARDIZATION ASSEMBLY, Florianópolis, 5-14 October 2004 , Resolution 17 – Telecommunication standardization in relation to the interests of developing countries
[98] Trade in services – the impact on developing countries, James Hodge, DPRU, University of Cape Town, Hildegunn Kyvik Nordås, CMI
[99] Article IV “the strengthening of their domestic services capacity and its efficiency and competitiveness, inter alia through access to technology on a commercial basis”
[100] GATS Article. IV
[101] Ibid
[102] Ibid
[103] MEXICO – MEASURES AFFECTING TELECOMMUNICATIONS SERVICES, Report of the Panel, 2 April 2004, WT/DS204/R, paragraph 7.214 : “More generally, Mexico argues that commitments made by developing country Members have to be interpreted in the light of paragraph 5 of the preamble to the GATS, and GATS Article IV which recognize that these Members need to “strengthen their domestic services capacity and efficiency and competitiveness”. However, we note that these provisions describe the types of commitments that Members should make with respect to developing country members; they do not provide an interpretation of commitments already made by those developing country members.”
[104] S/WPPS/W/21, paragraph. 2: These Disciplines contain, inter alia, the following provision under the heading “General Provisions”:
“Members shall ensure that measures not subject to scheduling under Articles XVI or XVII of the GATS, relating to licensing requirements and procedures, technical standards and qualification requirements and procedures are not prepared, adopted or applied with a view to or with the effect of creating unnecessary barriers to trade in accountancy services. For this purpose, Members shall ensure that such measures are not more trade-restrictive than necessary to fulfill a legitimate objective. Legitimate objectives are, inter alia, the protection of consumers (which includes all users of accounting services and the public generally), the quality of the service, professional competence, and the integrity of the profession.”
[105] http://www.wto.org/english/res_e/booksp_e/analytic_index_e/gats_02_e.htm#fnt24
[106] The adopted Disciplines: S/L/64
[107] E-COMMERCE, WTO AND DEVELOPING COUNTRIES By Arvind Panagariya, he describe article VII of the gats : “Article VII of GATS allows for such recognition even on a discriminatory basis, in the sense that it allows Members to extend such recognition on a selective basis.”
[108] Telecommunication Law, Edited by Lan Walden & John Angel, Blackstone Press, 2001, Page 371
[109] GATS article VI paragraph 3.
[110] Ibid
[111] Definition of “no less favorable treatment” : In EC – Bananas III, the European Communities argued that Article II of GATS did not describe clearly the terms of “no less favorable treatment” ; The Panel rejected this argument, it declared that Article XVII “is meant to provide for no less favorable conditions of competition regardless of whether that is achieved through the application of formally identical or formally different measures … The absence of similar language in Article II is not, in our view, a justification for giving a different ordinary meaning in terms of Article 31(1) of the Vienna Convention to the words ‘treatment no less favorable’, which are identical in both Articles II:1 and XVII:1.” The Appellate Body did not agree with this reasoning of the Panel, it was declared: “We find the Panel’s reasoning on this issue to be less than fully satisfactory.” but it reached the same conclusion as interpreted Article II of the GATS in the light of panel reports.”
[112] Ibid ,GATS Article II
[113] Ibid
[114] Only one request was for consultations under Article VIII of the GATS, in the case “BELGIUM ‑ MEASURES AFFECTING COMMERCIAL TELEPHONE DIRECTORY SERVICES”[114], complaint by the United States (WT/DS80/1)
[115]Article IX, paragraph 1: “Members recognize that certain business practices of service suppliers, other than those falling under Article VIII, may restrain competition and thereby restrict trade in services.”
[116] Article IX: (Business Practices) GATS: paragraph 2
[117] Under the Objectives and the Scope of the Telecommunication Annex of the GATS and Telecommunication Law, Edited by Lan Walden & John Angel, Blackstone Press, 2001, Page 371
[118] See paragraph 5(a)
[119] Seminar 9, by Rohan Kariyawasam
[120] Paragraph 4 of the Telecommunication Annex of the GATS
[121] http://www.wto.org/english/tratop_e/serv_e/12-tel_e.htm, the note of this page: 20/04/05
[122] Paragraph 5 (B) of the Telecommunication Annex of the GATS
[123] Seminar 9, by Rohan Kariyawasam
[124] Annex on Telecommunication of the GATS 5(g)
[125] Telecommunication Law, Edited by Lan Walden & John Angel, Blackstone Press, 2001, Page 337
[126] Seminar 9, by Rohan Kariyawasam
[127] Paragraph 1 of the Reference Paper: “Prevention of anti-competitive practices in telecommunications, appropriate measures shall be maintained for the purpose of preventing suppliers who, alone or together, are a major supplier from engaging in or continuing anti-competitive practices”
[128] Marco C. Bronckers and Pierre Larouche. Telecommunication Services and the WTO.
Journal of World Trade 31 (1997) Supra note 63 at 23. and, see the article: “Levelling the Playing Filled: Is the World Trade Organization Adequately Equipped to Prevent Anti- Competitive Practice in Telecommunications?” Damien Geradin and Michel Kerf, The World Bank.
[129] Ibid
[130] Ibid and WT/DS204/3 ,Paragraph 4.1: “The United States claims that Mexico’s ILD Rules fail to ensure that Telmex provides interconnection to United States basic telecom suppliers on a cross-border basis with cost-oriented, reasonable rates, terms and conditions and that this is inconsistent with its obligations under Sections 2.1 and 2.2 of the Reference Paper, as inscribed in Mexico’s GATS Schedule of Commitments.”
[131] Negotiating group on basic telecommunications ,Under the Definition : “A major supplier is a supplier which has the ability to materially affect the terms of participation (having regard to price and supply) in the relevant market for basic telecommunications services as a result of: (a) control over essential facilities; or (b) use of its position in the market”
[132] Case 27/76 United Brands v Commission [1978] ECR207
[133] DIRECTIVE 2002/21/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 7 March 2002, Framework Directive
[134] The European Commission Guideline, (2002/C 165/03) Paragraph 75 and see leased line Directive 94/44/EC
[135] The definition of Interconnection under the Reference Paper is : “linking with suppliers providing public telecommunications transport networks or services in order to allow the users of one supplier to communicate with users of another supplier” Paragraph 2
[136] Reference paper, Paragraph 2
[137] Ibid
[138] Ibid
[139] Reference Paper, Paragraph 4, Public availability of licensing criteria
[140] Ibid, Paragraph 5,
[141] Ibid ,
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