Why NZ should take a moral stance on global e-commerce

Tensions between the US and China are at an all-time high. That’s mostly because of the ongoing trade war between the two powerhouse countries, but it wasn’t helped last week when the US laid criminal charges against Chinese telco Huawei.

As a result of the unease and accompanying paranoia over possible cyber-espionage, there’s been growing talk of two separate internets emerging. One for the US and its allies, and one for China and its allies. A “splinternet,” if you will.

The latest battle for the internet’s soul, or at least its commercial heart, is over global rules for digital trade.

Over 70 members of the World Trade Organization have opened negotiations for a set of international rules to govern e-commerce. Most of these countries, which include New Zealand, Australia, the European Union, Japan and Singapore, want a better global e-commerce system in order to help their economies expand.

However, China is demurring. According to a Financial Times report, China is seeking “watered down rules” because it wants to maintain control over internet data flowing through its country.

On the face of it, the touted global e-commerce rules are sure to benefit our country. It would give us easier access to much larger markets, for a start.

Minister for Trade and Export Growth David Parker said in a press release, “E-commerce is especially important to small businesses as it enables them to participate in cross border trade previously more practical for larger businesses. This is especially important in New Zealand because as a smaller country smaller businesses are the norm.”

However, not all New Zealanders are optimistic about this process. Professor Jane Kelsey from Auckland University, an expert on international trade, claims that what the 70+ WTO countries want “literally codifies a wish-list of rules written by the US Big Tech industry – the likes of Google, Amazon, Facebook and Apple (GAFA) – to protect them from regulation. ”

Kelsey summed up her position in a blog post last week:

Given the turbulence engulfing the digital domain, from tax evasion and abuse of monopolies to unfair labour practices and political interference in democratic elections, the last thing we need is a set of global rules that prevent governments from regulating Big Tech’s activities in New Zealand and globally.

Global data governance also on the table

Meanwhile at last week’s Davos, the annual schmoozefest for the political elite, there was also talk about new global rules for information transfer. The New York Times reported that Japanese Prime Minister Shinzo Abe wants to “push forward a new international system for the oversight of how data is used.”

Japan will chair the next annual G20 meeting, in Osaka in June, so it will use that venue to negotiate a “worldwide data governance” accord.

To make matters even more complicated, Germany has differing views to both the US and China on data governance. According to the New York Times report, Chancellor Angela Merkel thinks neither the American nor the Chinese approach would work for Europeans, who place a high value on privacy and social justice.

Which way to jump?

As you can see, there are big question marks over whether both the WTO and the Japanese-led G20 meeting can get agreements on global e-commerce and data governance.

The key concern is that the powerhouse economies – mainly the US and China, but the German-led European Union must also be considered a force to be reckoned with – will splinter off into separate internet environments. That would leave smaller countries, like New Zealand, to decide which internet to support.

As Professor Kelsey pointed out, putting our chips behind the US-led internet risks surrendering (yet again) our sovereign data rights to the US big tech companies.

But is it simply a question of the devil you know? China may soon have the world’s largest e-commerce market, but its “Great Firewall” internet policing along with its propensity to favour local businesses over foreign, means that New Zealand is likely to fare worse in the long term if it chooses China.

There’s also the trust factor. New Zealand, along with its Five Eyes partners, has already made it clear it doesn’t trust Chinese telco Huawei to build our 5G network.

And from a consumer point of view, because of the China firewall we know little about how Chinese apps like WeChat and Alipay operate. Despite all of the privacy and other issues we’ve uncovered with Facebook, Google and other US companies in recent years, we are at least able to hold them to account in the court of public opinion.

Taking a moral stance

Given the issues with China’s internet, it’s a virtual lock that New Zealand will support whatever the WTO ends up agreeing on global e-commerce. We’re far too small to fend for ourselves in the brutal worldwide e-commerce market.

With that said, New Zealand is in a position to adopt a more aggressively moral stance on protecting the data sovereignty of our country.

Remember David Lange’s anti-nuclear speech at an Oxford University debate in 1985? “I can smell the uranium on your breath,” he famously quipped to his opponent.

I’d love to see our current Prime Minister take a similarly bold stance over the digital rights of New Zealanders. “I can smell the algorithmic bias on your breath” would be a neat catchphrase for Jacinda Ardern, should she find herself delivering a speech to the WTO on digital trade and data governance.