Securing Policy Space and Pacific Governance
PANG’s review has raised fundamental concerns about the Pacific E-commerce Strategy’s methodology and proposals. A key theme has been the need to ensure that Pacific Island Countries, nationally and regionally, retain the policy and regulatory space to develop an appropriate and effective holistic digital development strategy that is consistent with their broader Framework for Pacific Regionalism and the forthcoming 2050 Strategy for the Blue Pacific Continent.
To do this requires a clear understanding of the risks associated with the adoption of trade rules that constrain governments’ options and an accurate explanation of the current state of play regarding the development of such rules. The failure of the Pacific E-commerce Strategy to do this raises questions about the role of donors and consultants who are pushing Pacific Island Countries to adopt those agreements and the overall objectives, governance and implementation of a regional digital strategy.
Geopolitical Rivalries
The creation of digital development strategies is not a neutral or benign process. Developing countries, especially small island states, have little negotiating coin and often become by-standers in geopolitically-charged rulemaking arenas. The disproportionate influence of developed countries over emerging digital strategies and trade rules creates the potential for developing countries to be caught up in rivalries between three currently competing regimes:
the US’s hands-off approach that is reflected in the TPPA and has been enthusiastically promoted by Australia, New Zealand, Singapore and Japan;
the EU’s dual priorities to advance its corporate interests while protecting the right to privacy; and
China’s focus on national security, while expanding opportunities for its digital marketplaces, payments systems, and technology.
None of these models is designed for the circumstances or needs of the Pacific region.
Pacific Island Countries are adept at mediating such rivalries. Despite that, there is a very real danger they may end up trying to implement incoherent digital and e-commerce strategies and incompatible technologies, platforms and payment systems. That risk reinforces the need to ensure that digital and data sovereignty are central tenets of any Pacific regional digital strategy.
These geopolitical pressures are inevitably linked to aid programmes and the influence of donors. The UNCTAD Digital Economy Report 2021 cautions that solutions to problems of size, scale and distance, financial and regulatory capacity, knowledge and technological infrastructure should not be driven by the self-interest of donors.
The UNCTAD report also warns about the influence of the tech industry and its lobbyists over developing countries’ digital strategies and regulation. What UNCTAD refers to as “digital colonialism” “involves actions by major technology firms to shape the policy debate in their favour through lobbying, investment in infrastructure, and donations of hardware and software to developing countries”.
This risk would be heightened by so-called “transparency” provisions in recent trade agreements that entitle the relevant foreign companies and foreign governments to comment on a country’s proposed new regulations.
The MSGFTA3 has an “endeavour” obligation to give other state parties and their corporations prior notice of, and opportunities to comment on, proposed new measures. Pacific governments can already choose to do this, if they consider it appropriate to their democracy. But they should not be bound to do so.
There are also nuances when dealing with international organisations, such as UNCTAD itself. The Rapid e-Trade Readiness Assessments prepared by UNCTAD for most Pacific Island Countries promote the kind of approach that UNCTAD’s Digital Economy Report 2021 rejects as being narrow and inappropriate.
External self-interest
PANG’s review agrees with the Pacific E-commerce Strategy that Pacific Island officials need to be familiar with developments in current digital trade negotiations as they come under pressure to participate. However, that training needs to enable officials and their governments to assess whether it is in their countries’ interests to participate and if they decide they should take part, to identify what aspects of their regulatory space they would seek to protect.
The extensive commitments that Pacific Island Countries made in PACER Plus on computer and related services strongly suggest that the Pacific’s negotiators were not provided with adequate independent advice on very complex legal issues and the future implications.
The MSGFTA3 text also shows the unmistakable influence of both the US and EU models. The structure of the agreement, and the “understanding” on computer and related services, are straight from the EU’s template. Even without entering into force, they are likely to be cited as precedents for future negotiations with other countries.
Donors' Digital Trade rules
The peak body to oversee the E-commerce Strategy are Pacific Trade Ministers, serviced by trade officials, with day to day implementation through the Forum Secretariat’s trade team. Trade Ministers would receive their reports through the Pacific Aid for Trade Strategy Working Group.
The main operative mechanism is a Pacific E-commerce Committee to be chaired by the PIFS Secretary General, with the two co-chairs drawn from the private sector and the “development partners”. There is an obvious real risk under this structure that donors and the private sector will exercise undue influence over the implementation of the Pacific’s E-commerce Strategy. The development partners sub-committee, described as “the implementation powerhouse” of the Strategy, would place donors, with their own policy, regulatory and commercial interests, in an extremely powerful position to influence decisions and filter advice provided to Ministers.
The digital development strategy advanced in PANG’s review would require a more balanced multi-stakeholder style of governance to coordinate regional initiatives, to develop the relationships and cooperation initiatives suggested here, and to implement the outcomes.
As a first step, Pacific Island Countries could resolve among themselves to establish a Pacific Regional Digital Committee to provide organisational and governance arrangements that are much more fit for purpose.
Rethinking the Pacific's digital governance
A way forward
The Pacific E-commerce Strategy promotes a model of regional integration using e-commerce platforms, technologies and services that are controlled by big tech corporations and assumes that benefits of regional integration will flow from further trade agreements despite acknowledging the failure of the trade liberalisation model in the past. Even though Pacific Islands Forum Members have endorsed and begun to implement the E-commerce Strategy, there is still time for Pacific Islands governments to reconsider key elements before it is taken further.
A development-oriented regional digital agreement needs to be a very different instrument that enables the Pacific Island Countries to exercise control over their data, platforms, payment systems, and infrastructure for the broader public good. It should also set the foundations for cooperation, collaboration, and partnerships with other developing countries from whom the Pacific region can benefit and learn.
The obstacles that trade rules pose to that initiative can be worked around, provided Australia and New Zealand are prepared to accept that PACER-Plus should not be deployed to prevent Pacific Islands Countries from adopting a cooperation based approach that advances a development-based model of digital regional integration.