IGF 2010

VILNIUS, LITHUANIA

15 September 10, 0900, Room 3

Transcript of Session 80

"INTERNATIONAL TRADE AND INTERNET GOVERNANCE"

http://bit.ly/igf10trade

Video recording of the session is reposted here

http://bit.ly/igf10tradev

Note: The following is the output of the real-time captioning taken during Fifth Meeting
of the IGF, in Vilnius. Although it is largely accurate, in some cases it may be incomplete
or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to
understanding the proceedings at the session, but should not be treated as an
authoritative record.

>> SEBASTIEN BACHOLLET: First of all, I would like to apologize, Siva who set up this
workshop is not able to be with us in person today. I hope she will join us through
WebEx as soon as we will be able to start the process of having WebEx and all of the
sessions on the screen. Siva asked me to take that role which is impossible because I'm
fellow member of the India chapter in Chennai and I'm from France not from India
sorry. I was asked that two days ago. We have a good speaker. I'm sure it's somewhat
more important than the guy helping with the meeting. And we will have a formal
presentation as soon as Olivier will be able to run the WebEx system.

(Standing by).

>> SEBASTIEN BACHOLLET: Okay. It will take one or two more minutes for technical
reasons. Why don't I suggest that if you agree that you present yourself and what you do
and I hope that it will be ready to start your presentation as soon as we will do that, if you
agree. May you start, please?

>> SHEBA MOHAMMID: Hi. I'm Sheba Mohammid. I'm from Trinidad and Tobago.
That's a small island right in the Caribbean Sea. I work for the Government. There I'm
an ICT Policy Specialist. And I'm here with the African Caribbean Government and so I'll
be talking about Small Island Developing States lands today. Looking at MSMEs to look
to what could be done to what could help enable them using international trade using
ICT.

>> LEE TUTHILL: Hi I'm Lee Tuthill. I work with the World Trade Organization on the
General Agreement on Trade in Services, the GATS. I've been working there a long time
on telecommunications and communication services but more recently on what's been
called IT-enabled services. And that's a very interesting development in itself. So we'll
talk about that today.

>> ALAN DAVIDSON: Good morning, my name is Alan Davidson I'm Director of public
policy at Google in Washington D.C. where I head up our public policy work in north and
South America.

Before joining Google, I was civil liberties lawyer at the centre for democracy and
technology for a number of years -- democracy and technology for a number of years I
used to be an engineer but to my mother's great sadness, I'm now an attorney.

>> DIMITRI YPSILANTI: Good morning. I'm Dimitri Ypsilanti. I'm with the
Organisation for Economic Co-Operation and Development. I'm responsible for two
committees at the OECD one the Consumer Policy Committee which looks at issues of
consumer protection and the other is the ICCP information communications -- sorry
information computer and information communications policy which look after issues
like tell col, security, privacy, the information economy, Internet issues.

>> OLIVIER MJ CREPIN-LEBLOND: Good morning. I'm Olivier MJ Crepin-Leblond. I'm

an ISOC ambassador. And I'll be speaking on behalf of the people who are not here in
Vilnius but who are everywhere else around the world and who are watching this
through the audiovisual system we have here and bringing feedback on WebEx. So
hopefully we have a very good session. Looking forward to it. Thank you.

>> SEBASTIEN BACHOLLET: Okay. We are having some technical trouble.

>> OLIVIER MJ CREPIN-LEBLOND: I don't know if the person on remote presenter

status at the moment is hearing us but I need to have the ability to put presentations on
at the moment. And I don't have it. So we're waiting for it.

>> SHEBA MOHAMMID: Hi. I'm Sheba again from Trinidad. We'll start small today.
We have a really diverse panel so I think we're going to get a lot of different perspectives.
And pretty much we're here for dialogue. So it has to be interactive. I'm not going to
expertly present anything. I'll just present a story of a small developing island state,
Trinidad and Tobago, and see what reflections it gives us on Small Island States
everywhere and what's happening in international trade and development and how this
can be an enabler of development. So I'll just help Olivier out because he's doing a lot
and just say: Slide.

So in the context of globalization a lot of big things are happening in the world a lot of
really big impressive things are happening with transnational companies and tab go is
no exception we are an oil economy everyone thinks we have a lot of money and we're
not enabled for funding sometimes. But the idea is if -- there are a lot of transnational
companies there and we want to look at how that kind of benefits everyone so does it
really trickle down at citizens and when we look a little bit closer at the economy a lot of
both economic employment and kind of the cultural relevance comes from micro, small
and medium-sized enterprises, MSMEs and we wonder are they being marginalized and
enabled and what is the landscape of international trade it's a context now where tab go
and a lot of the Pacific and Caribbean states people are buying a lot more online and
there's more an American streamlining of goods coming in and it's fantastic for
consumers and they are being given more choice and we're wondering how can ICT
benefit small and medium-size enterprises.

And kind of one of the answers that we're getting is that we really have to start using it as
a lever and if we're going to participate in the international economy you have to use
those tools and one of the initiatives that the Government piloted was enterprise matter
and that's a B2B marketplace and it's meant to be Trinidad and Tobago online all the
time a home for MSMEs and creating an online space something that's concrete and
people can go on to and now the project is in review and they are deciding the way
forward but these are some of the steps that are happening so how can we get MSMEs
online and if they are very small single entrepreneurs how can you canvas them together
so their companies can be showcased for international markets.

And more recently we've had the business development company of Trinidad and
Tobago has developed a trade portal and what it does is allows B2C commerce by having
enterprises kind of catalog their services so it really is trying to use the tools that are out
there to empower businesses to put their voices out there, let them be heard. To put
their products out there and allow some kind of development.

And some kind of coalescing and maybe it funnels it to create more power and people
can go on and say this is the Caribbean or this is where we can access goods.

And more recently we've had a single -- launched a single electronic window facility in
Trinidad and Tobago and what this does simply is it's just a single point where
information, forms are all that's needed for small and medium-sized enterprises to kind
of participate in trade internationally import, exports all of the messy logistics of it all
that can be really daunting for a really small business they can get on there and they can
have access and it's this lever that allows them to use ICT as a tool to kind of effectively
get their businesses out there and participate in markets where they may otherwise kind
of be marginalized or may not even think of participating.

And one of the really exciting things that's been happening in Trinidad and Tobago I
don't know if anyone has been there but our major kind of highlight of the year is
Carnival and that's -- exactly. I think someone has been there. And so pretty much it
was a festival that we have in February normally. And it's this big street parade like any
other carnival but it's got it's own idiosyncracies and it draws -- one of the things that
ICT has been enabling us to do which is kind of unprecedented in a merchandise trade
that's happened in the past when we participated traditionally in the sugar economy and
that type of thing is now we have the capacity to really culture and make it more tangible
and participate in trade in a whole new way and it's this paradigm shift where selling
Trinidad and Tobago doesn't become just kind of a commodity of it but how do we get
messages out there and small businesses have really started adopting this, adopting a
medium and using it as both cultural expression but kind of a lever to get into the market
and participate and connect with both the international markets out there and Carnival
is kind of a fantastic example of how that's being adopted in Trinidad and Tobago to
create greater traffic, greater interest, more tourists coming in and it's been experienced
by a lot of Latin America kind of countries where you're selling identity in this way and
trade becomes something that we think about very differently than we may have in the
past, you know?

And one of the kind of new and burgeoning areas that we're looking at and that's kind of
a great lever for Small Island Developing States is this concept of open innovation so it's
crowd sourcing. And we have all these just new Web sites out there, these new
companies. That may traditionally have had a closed innovation cycle. Their research
and development was centred within their company. There were these fixed experts and
now with the knowledge economy, everything is changing. It's turning upside down.
And they are looking outside. They are putting it out there. They are asking for ideas.
And Jasper kind of started conceptualizing innovation by seeing this market funnel that
kind of traditionally went one way and within a company and very internal focused and
now you have the capacity for contributions to come from elsewhere.

And this can happen within a state. But it can also happen globally. So it kind of is an
opportunity for Trinidad and Tobago and other developing countries to participate in a
knowledge economy and there starts to be this really fascinating thing with international
trade on ICT and development becomes a trade in ideas.

And InnoCentive is one of these. CrowdFlower is another. They look into the -- target
into the developing world specifically. And here -- and InnoCentive large companies
transnational company where there may have been a hierarchal divide before or a
perception of such it kind of deconstructs the whole thing and you have a problem and
it's really a simple equation you have a problem put it up need a solution and instead of
keeping it within your company you put out there and out there with ICT means
everywhere now and it gives Trinidad and Tobago the ability to kind of sell their ideas, to
trade in their ideas. And I mean there are these burgeoning issues and it's really exciting
but how about international property how does that factor in trade when you're doing
things like trading ideas how is that governed what are the policy implications of that.

The whole new kind of issues coming up in the landscape of trade. We're hoping we can
have a discussion about that today. So this is from Trinidad and Tobago's perspective
but how do people elsewhere see it. So these are some of the kind of initiatives that are
happening in Trinidad and Tobago and other Small Island Developing States some of the
likely barriers the usual suspects are kind of there so access and connectivity issues.
How is that broached. There's usage and uptake so even know with a greater infusion of
ICT and greater access, what even motivates small businesses to think they can
participate in international trade. Because it seems rather daunting in the first place,
you know.

Do they have the skills? Is there a need for capacity building?

These are some of the issues that are ranging up.

And then there's the policy landscape and I come from a policy context. But in Trinidad
and Tobago we have electronic transactions bill data protection bill and a consumer
protection white paper that's floating around but we are still lagging behind and these
are kind of cross jurisdictional use and how do we harmonize internationally this use of
trade and create an environment of trust for consumers and producers. And these are
some of the issues that are kind of banding about right now. And we hope -- I mean
Google is here. We have a whole range of speakers. We're going to kind of throw these
out there.

So this is just starting small. This is one country. And what we're trying to do. Whether
we will be successful or not kind of depends on all of us. And I'll pass it onto other
speakers and we'll have a great discussion today. So thanks so much.

>> OLIVIER MJ CREPIN-LEBLOND: I think it's up to Sebastien to follow up. I was going
to ask if there are any questions for those. Thank you very much. Anyone that wishes to
start on the questions remotely at the moment I don't see any.

Excuse me; when you ask questions please state your name, your affiliation and also
what country you're from.

>> KARLENE FRANCIS: Good morning, everyone. My name is Karlene Francis. I'm
from the Organisation of Eastern Caribbean States. I live in Saint Lucia. But of course
I'm Jamaica.

(Chuckles).

>> SHEBA MOHAMMID: Globalization, right.

>> KARLENE FRANCIS: Right. All right. I shared the perspective that was just said by
the panelist in terms of MSMEs making up 30 to 40% of the Private Sector in Small Island
Developing States. However, the issue in terms of international trade has to do I think
primarily with the legal framework.

There are many, many projects in the Caribbean where we're working on harmonized
legislation, eTransaction, cybercrime data protection, data protection -- eTransaction,
cybercrime, data protection, access to information. And interception of information.

So the ITU CTU project and the project that I worked on VerCom that's funded by the
information for integration project and what we're finding is the legal framework has to
be in place in order for us to effectively participate in international trade. And that is
where the primary focus is on now. And it trans sends into intellectual property rights
and all of the other trade legislation. So it would be good to find out when the other
speakers speak, as well what has been their experience with regards to the transitioning
for the legal framework. And how is it we can participate as developing states since we
are at a different stage in terms of our legal framework. Thank you.

>> SHEBA MOHAMMID: I think that's a fantastic point and it kind of gives one of the
lenses that the legal issue really is important in terms of building trust and in the
Caribbean we have hipca going on through the ITU we have harmonization projects and
I think with the Caribbean working together there's another avenue Small Island
Developing States kind of coalescing to harmonize and form a greater power and I think
it would be great to hear from some of the other participants because one of the things as
the developing world we are looking towards best practices and Trinidad and Tobago
signed MOUs with other governments more recently with Singapore I believe and other
MSME exchange is kind of being modeled under TradeNet we are looking at some of the
legalist use. The context is very different and historically we may not have some of the
frameworks that other countries kind of take for granted and these are some of the issues
we need to streamline and it would be great to hear from everyone on these.

Thanks so much.

>> OLIVIER MJ CREPIN-LEBLOND: Technology isn't with us today.

>> GORDON CAMPBELL: Thank you. I'm Gordon Campbell and I'm Canada's Director
of eBusiness development. And actually one of my preoccupations even though Canada
is a G8 member is the SMEs in Canada. SMEs may make up 80 to 90% of Canada's
business but it seems we're actually facing a number of the similar challenges that small
developing island states and other states are, which is particularly motivating SMEs to
participate in the online economy.

We found over the last decade the purchasing by SMEs online has risen significantly but
the selling by SMEs online has almost not moved at all it's maybe a couple percent up
and we have again many, many remote areas in Canada, disparity businesses and so for
so while certainly business models may be different between Trinidad and Tobago and
other Small Island Developing States and Canada I'm similar to your thoughts as to what
you thought may motivate SMEs because we have tried different information
programmes, partnership programmes with some success from time to time but as you
know there are just so many businesses and so many people to talk to. And I think it
does remain as you put your finger on fundamentally a question of motivating and what
would encourage small businesses who have so many other things to worry about
meaning staying in business day to day, hiring new employees, balancing their books to
go out and participate in programmes like you're doing so I'm just interested in that.

Thanks.

>> SHEBA MOHAMMID: Sure. Thanks so much. And it's great to see there are similar
issues being faced internationally. I think one of the main things has been -- although
this is kind of an economic frontier, it's really a change in culture and how do you change
behavior. And some of it really is just kind of changing every day morals that happen in
society and for Trinidad and Tobago one of the initiatives we have been pushing is
having governments start being a model user of ICT so with Government having
eServices online trying to create a precedent of use, create a more dynamic use of ICT, it
a model and starts stirring things up that this is a different way of doing business and I
work for Government the most antiquated machinery can start to get on board. Then it
creates -- it starts to create a different culture, it starts to create that change and another
way I think we have been doing it is through public-private partnerships so we need to
kind of stop working in silos and kind of us and them and get people to do things and
start realising we are all kind of facing these challenges and how do we work together and
really leveraging on success and showcasing that success.

We have some bigger businesses in Trinidad and Tobago how do they mentor and
partner with smaller enterprises and get them on board. How do they transfer that
knowledge. How does that happen within a country but how does it happen
internationally are there opportunities for kind of matching small businesses with larger
ones. Are there opportunities for greater dialogue online where if SMEs do go on and
they have questions or there's a level of uncertainty, how is that broached? And these are
some of the kind of ways that we have been kind of trying to streamline or increase --
create some incentive. I know that other countries have used tax incentives. There are
different kind of economic ways to do it. But really I think in Trinidad and Tobago at
least it's been a change in culture and seeing things a bit differently and kind of helping
people navigate their way around a new space as you would a new frontier and how do
you do that gradually and showcase a success that's out there and create a pull factor I
think that's how we've been trying to do it in Trinidad some of the online spaces we've
created kind of we hope will draw people in or create a level of comfort.

Like she said the legal area really is something that we're grappling with right now but
kind of getting SMEs on board and getting them to speak to each other so we have the
business development company Trinidad and Tobago and kind of getting SMEs in the
room and having everybody kind of put their face out there and put their ideas out there
and how can we start building on these ideas and making them something more
concrete. And working within the country and with other agencies. We work within the
commonwealth. Within the Caribbean we have MOUs with the UK, with Singapore. And
sharing that knowledge. And I think the great salvation that's going to kind of happen for
MSMEs using ICT is really going to be leveraging on that knowledge aspect or that idea
aspect. How do you move something that's so intelligible and so nebulous and make it
real to people and that's kind of some of the ways we are doing it I know people may
have a lot of ideas in terms of that and maybe after the panelists speak we'll have a
discussion but I'll pass you onto another panelist and then we'll keep the dialogue
rolling.

>> OLIVIER MJ CREPIN-LEBLOND: I have two more questions then we have --

>> TRACY HACKSHAW: Tracy Hackshaw. Internet Society Ambassador. I work where
the Government is in charge of the Enterprise Network Projects. I want to address the
question from our Canada colleague directly how do you do it. There are a couple of
things that the project uncovered. One, we need incentives. So for the MSMEs to
participate directly in the economy provide what they came up saying why are we selling
online if we can get better prices in the stores and the offline? So one of the things we
have recommended is if you are selling online in the case of traveling we have value
added tax that applies to products we remove value added tax so it's effectively cheaper
online and that will affect both the local market and international market.

As well, we have a unique product as Sheba pointed out which is the cultural product. I
believe it's considered to be 500 million US in value the Carnival culture sort of thing
product and online the seal of things that are online are high primarily dias but also to
the international market beyond the dias burrow and it's been estimated that 10 to 20%
of the market so for so I would say for the MSMEs in Canada if there's something in
particular maple syrup whatever it is that you can showcase to the world and you can get
those companies involved in and have them as examples a company with
maplesyrup.com is doing very well and they have made X dollars. So you can draw the
other companies in with the best practice along those lines. That's the feedback we have
gotten from our MSMEs have said because there's really reason for them to see online
there's no real reason they can see as a reason and we have had 1500 people
participating in that project and that's what we have gotten to address Colleen's point,
though, about legal frameworks, I agree that legal frameworks are important and need to
be addressed and will be addressed today. I assume the fact that it's happening
nonetheless without the legal framework international trade is happening on the
Internet and with the Small Island Developing States there's a way around it and we need
to regulate that as fast as we can money is being transferred to easycheckout.com and
these companies by other means and the Government isn't seeing a sign of that in their
pockets.

The taxpayer -- the tax man isn't seeing it and it's going out and the money is coming to
the MSMEs in quite a large amount but no news with what's trapping it so it's happening
so we also have to deal with that issue despite there's the legal framework in some of the
MSMEs so I think she was addressing it from this angle a more useful approach for the
legal framework supporting and coming they need to come with the context as opposed
to coming from only a best practice. So both context and best practice. So I think that's
going to start us off as well.

>> SHEBA MOHAMMID: Thanks so much, Tracy. He's the chief financial architect at
Trinidad. While I'm in the boring policy side, Tracy is the firsthand man to grab for
projects. He's in that arena. Feel free to speak to us later on.

>> DR. GOVIND: Director from communication --

>> Speak into the mic.

>> DR. GOVIND: I'm Dr. Govind, Senior Director for communication and IT in New
Delhi. I wanted to thank Sheba for a wonderful presentation on Tobago and Trinidad
working on the SME sector we are already in India which is a big company we have a
large number of SMEs sector but the only difference is we have clusters like textile
clusters, IT sector.

And we have various clusters. Hundreds of clusters working in different parts of the big
country. And there will be ICT which is the same small enterprises they will not know
what kind of softwares they have to use for kind of the billing sector -- building sector for
charity sector and all of those issues and the online business, how to sell, how to buy and
these sectors what we are trying to do is see how can we enable the ICT in these small
and medium devices which are not knowing what to do in a cluster way. And how to
educate them. How to educate them on the various aspects of the ICT industry. And the
trade aspects. And the -- even in the ICT what kind of software is there to buy the
hardware. Whether the outcome will be the better option or any other kind of thing that
is there so we are all working on these issues.

It's good that we can share this in that form with the Google and others players coming
up so how can we replace the ICT is the M -- how can we place the ICT in MSME sector.

>> SEBASTIEN BACHOLLET: Okay. Maybe we'll go to the second panelist. Thank you.

>> LEE TUTHILL: Thank you very much. Another wonderful aspect of Trinidad and
culture is the food. But that's a little harder to trade online these days so you still have to
go there to get it. I'm glad there were a couple of questions about the legal framework
because that's what I'll address. Like I said, I work within the WTO on general agreement
on trade and services and we've done a lot of thinking and talking at least about
eCommerce as we once called it but it goes by many other names today I think.
eBusiness and so on.

This particular presentation was inspired by a meeting I attended not too long okay at
the OECD about Internet intermediaries and a lot of the discussion was on the legal
issues surrounding that. And it appeared to me that with the recession the global
Economic Crisis as well as greater concern about cybercrime and cyber terrorism there
was a trend really like never before towards wanting to regulate the Internet and regulate
Internet access and in particular Internet access providers in a way that I had really not
seen an enthusiasm for this before.

And there's also people on the other side of the fence saying: Wait a minute, shouldn't
we still think twice.

To the point that one of the participants in the meeting at the OECD was even suggesting
there should be a treaty on Internet. And I think this falls very clearly within the scope of
Internet Governance. Both at the national and international level.

And I thought it would be good for people to have a little better understanding as they
perhaps embark on more heavy regulation as to what is already in international law in
the Services Agreement that does relate to the benefits, the rights and obligations that
governments have vis-a-vis Internet access providers in particular.

Let's go to the next slide. It's just a title slide here.

The question, I'm going to raise it through a series of questions. One is: Who does the
Services Agreement cover? And you can flip to the next slide. It's mostly a title.

We hold very close to our hearts this concept of universal coverage of services by the
GATS Agreement. This means all commercial service and service suppliers are covered
by the agreement and this does include Internet access providers on which there are
probably at least half of the governments in the WTO have taken some form of
commitment to the services that Internet access providers provide.

And a variety of Internet enabled services.

Now, what are the legal benefits offered by the GATS? First let's go to the next slide
which shows you essentially the two what I call golden rules the GATS one is non-
discrimination against countries, MFN, and the way you apply your trade and regulatory
traditions affecting service suppliers.

And the other one that I think sometimes we as trade legal experts or trade negotiators
tend to sometimes dismiss to easily but the business community certainly doesn't, the
rule of transparency. That all of the measures, regulations, licensing criteria, if any, and
so on would be made publicly available by Government so that the service providers
know what the rules are and what they have to abide by.

Next comes to a slide on two rules that are actually committed individually by
governments because they get to choose the services they wish to take greater levels of
commitment on in the telecom and Internet access computer services area, there's quite
extensive commitments. Less so in the area of IT-enabled services. But that's not what
this particular presentation is about. But if there are commitments on the services,
you're looking at there's a national treatment obligation to not discriminate against the
foreign providers of a service any more than you would against the national. You would
treat them as if they were a national.

And market access which within limits governments can have some restrictions they can
reserve against. But in principle it means the governments agreed they will impose no
quantitative and in some cases qualitative barriers to the supply of a service they have
committed on.

Finally I think which is quite important as well is the slide on a general -- next slide -- on
a general obligation that requires governments with all measures that affect trade and
services that they administer these measures in a reasonable, objective and impartial
way.

And I've worked a lot with regulators of telecom which are increasing becoming ICT
regulators or converged regulators as they call it. And I think many of them are new and
enthusiastic and they take very seriously their responsibility to be transparent, objective
and impartial vis-a-vis all of the market participants.

Now, the next question we have is how. How do governments within the WTO context at
least address some of the competing policy objectives they have today.

Could you change the slide, please? Thank you.

And I think there's a number of things written into the WTO which is fairly easy to read in
some of the concerns people have today about Internet services and Internet providers.
Change the slide, please.

This was not designed for me not to be clicking by myself here. Bling, bling.

Yeah, the next slide shows that if you want to, some of the concerns involve public
morals, think about issues related to obscenities obviously and other things on the
Internet. Think about for example public order. German situations and some other
countries that don't want hate kind of Web sites to proliferate inciting ethnic violence
and stuff like that.

If you change the slide you also have issues coming up about the protection of human
life and animal and health issues. Think of pharmaceuticals being sold over the Internet
in markets where they should have prescriptions or considered to be dangerous for
example. And pharmaceutical companies sort of struggling with these issues as well as
governments.

And next slide.

Obviously just like the non-Internet world or the non-cyber world, you have concerns
that are perhaps heightened about fraudulent practices, fraudulent commercial
practices in this case and things like what do you do if the contract default is happening
in another territory and another national jurisdiction people have called for these things
to be international understandings or treaties that help governments cooperate on these
kind of things and finally I know a big concern with people working on a national level as
well as regional levels in many cases is working to protect the privacy and confidentiality
of individuals and their records, their accounts, et cetera. This is something that we have
already seen quite a start in having national rules. We don't have so much international
rules.

But if you look at this collection of things, you really have a collection of issues if you
switch to the next slide that look as if they were practically written for the cyber
environment.

Well, they are -- click again I think.

They are already in the WTO. As it were. And they are in the WTO in an area called the
Exceptions Provision. And you can see at the very top in blue it says nothing in this
agreement shall be construed to prevent the adoption or enforcement by members of
measures which and then if you click again you can see the rest of this provision they
have anticipated governments having certain national objectives that are above trade.
Even the traders and the trade officials recognize certain public objectives perhaps
trump trade when it comes to dealing with things so they can even violate the WTO,
violate the GATS provisions if these concerns come into play.

So let's look a little bit about how this works. The next slide is again a title slide about
sort of when it's possible for governments to take these departures, under what
circumstances.

And the next slide shows one of the disciplines on governments taking advantage of this
exception to the GATS or these public policy aims is in what we call the Shampo
(phonetic). And it says that any of these measures that do depart from the GATS
obligations wouldn't be applied in a manner that would constitute a means of arbitrary
and unjustifiable discrimination. Which if you think about what I said a few slides ago,
there's two forms of discrimination that the Services Agreement looks at and in both
cases they are in principle not allowed.

So here you see the word unjustifiable discrimination implying there would be a
justifiable discrimination if the problem at hand that you had to deal with, be it cyber
terrorism, cybercrime, et cetera, implied some kind of measures aimed at this particular
country, then that might be justified discrimination.

If you look at the second standard applied in the WTO, you click to the next slide, it
implies you would not have a measure which is actually a disguised restriction on trade.
And you know, that has not been beyond governments to try to use some higher policy
objective to try to do something that perhaps not even inadvertently also happen to
restrict trade as one of the hidden agenda items and it might be looking as it were
looking at intent but it's often not that hard to determine.

(Echo)

>> LEE TUTHILL: We are really going here. Am I hearing myself?

(Chuckles).

>> LEE TUTHILL: Okay. I'm happy.

Anyway, a disguised restriction on trade. So anyway, you're not supposed to try to slip in
through this Exceptions Clause trade restrictions because you may be sorry -- the
Government may be sorry it didn't take a trade restriction earlier.
Yeah, let's move on. There's also a third thing which is also sometimes controversial
when it's trade people but I won't deal with that here. If you click on another slide, click
again, these provisions have the word necessary in them. And it's become what we call a
Necessity Test. And a Necessity Test means that the measures you take to achieve these
objectives would be judged against a standard that essentially implies two things.

One is proportionality. One, did the measure overreach? Did it really restrict trade more
than it needed to?

So the expression we used when discussing it because we did borrow some of this from
the Goods Agreement and bring it into the Services Agreement, the idea is you don't
necessarily shoot a mouse with an elephant gun.

And the second kind of standard that the Necessity Test implies is that if in fact the exact
same public policy objective, be t let's say public morals or purity of food if they can be
achieved at the same level because the people don't question the public policy objective
concern and we realise different morals of morality different things exist around the
world but if the same level the Government desires to be achieved can be achieved with
the less trade restrictive approach then that's the approach that should be taken.

Now, this test is usually performed by what we call Dispute Settlement Panels in the
WTO which is a very active area in the WTO. It's a quasi judicial agency and it has
meanwhile the trade negotiations have been stalled for years but the dispute settlement
machinery has been working very hard and not only has this Necessity Test been used
and set precedent in the goods area but we also had a case on Internet gambling in
which this Necessity Test was applied in the services area, as well. And I think it's quite
important to bear in mind, although it sometimes means the Government doesn't
necessarily win its case, which is why sometimes it becomes controversial. And finally, a
title slide on why. Why did I feel it was necessary to talk about that?

If you move to the next slide the main points I really wanted to make it is probably the
first international treaty that does cover Internet as many of the -- one of the many
services it covers, its rules and obligations tell us what we should do in terms of how we
treat Internet access providers as governments. And I think that efforts to create both
national but in particular international rules, if that were to come in the future, should
take these existing standards into account or at least be aware if there's any departure
from them but hopefully not need to depart from them. And you know, key trade
obligations, the disciplines I think do relate to some of the solutions that might be sought
on privacy, cybercrime, many of these issues that people are increasingly thinking about
as the basis for greater regulation of Internet access.

Thank you.

>> SEBASTIEN BACHOLLET: Thank you, Lee. One or two questions, if there are? If not
we will go to the other panelists -- okay, you have a question online? Thank you, Mr.
Online.

>> OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien. Thank you, moderator.

There's a question from Syed Razek at the India remote hub in India I guess. The
question is to Ms. Tuthill with regards to the free market access, I think it's good to think
of such a situation but at the same time it's also scary that it will make room for further
fly by night marketers to swoop in and try to make a quick buck by setting up shop.

>> LEE TUTHILL: This is obviously a simplified version and governments all around the
world have taken a view of careful marketing decisions on what to give market access on
and what not to in some cases the Government agencies go a little further than suppliers
want them to do but in much cases they have gone much less far than the trading
partners would want them to. It's a careful balance. People don't commit on everything.
In some cases they have told me that because of concern of those type fly-by-night
suppliers in some of the areas such as telecom or computer services, people have
deliberately committed on market access on a service combined with a joint venture
requirement for example. So there are some solutions that governments have tried to
craft when they have worked with the Services Agreement.

>> SEBASTIEN BACHOLLET: Thank you. May I ask Dimitri to take the next slot, if you
agree?

>> DIMITRI YPSILANTI: Sure, thank you.

>> SEBASTIEN BACHOLLET: Thank you.

>> DIMITRI YPSILANTI: Good morning. I live in Paris, France and -- closer, sorry. Okay.
Is that okay?

As I was saying I live in Paris, France. And in the mid '90s when we wanted to buy as
individuals wanted to buy music or movies or small electronic devices we actually used
to go to the United Kingdom because there was a significant price difference between the
French market and the UK market. And of course with the advent of the Internet, we all
got very excited that we saw the potential of cross-border competition taking place. And
much more efficient pricing. And harmonization of pricing.

And -- harmonization of pricing and our member governments in fact had the same
vision at the OECD in 1998. And we had a ministerial level conference in Ottawa, it was
aimed basically a building trust for users and consumers and setting the ground tools for
a digital marketplace. And there was important outcome of this conference over 12 years
ago. We adopted a lot of declarations, what we call recommendations or guidances in
OECD language. And just let me name some of them.

There was a declaration on protection of privacy on global networks. Obviously privacy

is important for consumers as they share information with unknown retailers in both
domestically and internationally.

We adopted a declaration on consumer protection in the context of electronic

commerce.

Declaration of authentication for electronic commerce.

And then a taxation framework conditions. Not in order to make sure you're taxed. But
that possibly was part of it. But also to make sure that you don't get taxed twice when
you purchase an online product.

And again in the context of OECD, we are not the European Union our declarations,
guidances, recommendations are exactly that. They don't impose a requirement on the
member governments to adopt them. But they provide, if you want, a best practice idea
of what member governments should try to aim for. And of course we can't -- we can't
force them to do that. It's up to them. So whether they implement these
recommendations in their own domestic frameworks or not is out of our hands.

Since that time, since '98, we have tried to develop all of these recommendations and
guidances. And a couple of years ago we held another ministerial meeting in Sol on the
future of the Internet economy where we again pushed our member governments
forward on trying to go further in enhancing eCommerce as well as putting the idea on
the table that the Internet is not something proliferate. That the Internet is the main part
of our economies, has become the main part of our economies. And will be the main
source of development, innovation, growth in our economies.

Data on eCommerce are not very good. So it's difficult to benchmark exactly what's
been happening.
But just let me give you just a couple of figures.

In the United States business to consumer eCommerce is about $140 billion. That
sounds a huge number. But it's in fact just under 4% of retail sales. So it's not high. And
I think most of -- most of this activity is domestic in nature, not cross-border.

When you look at business-to-business eCommerce, the figures are much better. It
represents about 27% of business transactions. And again, it's difficult to say how much
of that activity is domestic and how much international.

Within the European Union, data shows that one-third of consumers purchase products
online. But only 7% from another country. And obviously you should recall that
European Union is supposedly a single market. So that 7% is incredibly low. And if you
look at data at European Union retailers, 51% were selling online. Whereas only 21%
conducted cross-border transactions within the EU. And again that's a fairly low
number.

So there's obviously our vision in the mid '90s of harmonized markets and much more
cross-border are competition didn't quite develop as we saw it. Although from a positive
point of view, we now can actually purchase online from the UK instead of taking the
train across to London.

And prices in Europe have harmonized. But I think that's mainly because much more
domestic competition rather than competition from cross-border sales.

In fact, now if we do want to purchase music, movies, we go to the United States, where
it's easier to get them. And we can get them from Amazon as long as you don't order too
many. Otherwise customs will stop you from getting those.

So what are the difficulties with cross-border eCommerce?

There's a very good EU report which actually looks at the barriers. And this is within the
European Union. And one of the first barriers is of course language problems. But if you
want to -- to have sales outside your home base, obviously you can allow consumers to
choose their language and in fact many do so.

High delivery costs is an issue. Evolving scams and misleading practices. Compliance
with domestic fiscal regulations cause problems.

And regulatory barriers including questions pertaining to the applicability of each

country's laws when cross-border transactions take place.

And of course, one of the biggest problems is redressibility that if your product doesn't
get delivered or you charge too much for the product and you want to go back to the
retailer in another country, it's quite difficult for you as a consumer to get redress from
the retailer.

So when we look at one particular area, digital content, that's perhaps much more
complex because immediately there we come across some digital rights management
where frameworks differ across countries. And within the EU they differ even within the
single EU market.

In 2008 the OECD issues a policy guidance for digital content which recommended that
governments put in place policies that promote accessibility to digital content to all
people regardless of location.

I can't see that coming in the very near future. It's a complex area. And any of you who
have tried to buy music from Apple for example will see that you get diverted to the local
Apple store and not to the one in the US or UK or wherever you live.

So digital rights management is a key issue.

It seems to be much less of an issue in -- at least at the moment in electronic books

where if you buy a Kindle and want to buy a book, as long as you bought the Kindle in say
Canada or the US and you live in France and you have no difficulty getting a book. And
downloading it.

What should we do to enhance international trade in eCommerce. And I thought what

Lee presented was an excellent framework, which exists. But doesn't seem to be applied
as much as perhaps it should be.

I was interested to see that the US and Korea in their Free Trade Agreement have inserted
a clause on eCommerce. I think that's a big step forward. And New Zealand, Australia
and the Asian countries that have entered into a Free Trade Agreement just this year
have also inserted clauses on eCommerce. And again, that's quite a big step forward.

One of the biggest difficulties that we need to overcome is secure payments. And there is
a lot of work mainly by financial and other payment intermediaries in the market who
are setting up different systems well, we all know PayPal but there's Amazon payments
have come on the market. And Google Checkout on the market. And there are a number
of institutions which have been set up.

For example International Council of Payment Network Operators, who are starting to
standardize how you can undertake a payment without divulging your personal
information to the retailer. And I think that's an important step forward to ensure your
privacy to safeguard your identity and ensure security in payments.

The other important step that needs to be taken is to get much better dispute resolution
-- transported dispute resolution. And that usually needs Government to Government or
at least if there's a party which is a non-governmental body but attached to
administration. So it's not necessarily Government department to Government
department. But it could be a body like the Federal Trade Commission in the US getting
agreements. The office of fair trade in the UK. But there needs to be some agreements.
Some means to ensure better dispute resolution. And this could be undertaken again
through intermediaries who could set up systems between companies to step in if there
are disputes. So just let me summarize.

I think we have moved on. There's a lot of cross-border trade activity developing. But
it's far from perfect. The sort of hopes that we had in the '90s when we saw the potential
of the Internet have not quite been realised. And in many cases the inclusion of
companies in transporter transactions is limited. It's often limited to the larger
countries, to the wealthier economies. And is not well linked to the developing
economies who perhaps have not got the domestic frameworks in place. And I think for
them to start developing their domestic frameworks in order to support transporter
transactions would provide in the longer term a significant boost to their economic
activity. Thank you.

>> SEBASTIEN BACHOLLET: Thank you, Dimitri. Any questions? In the remote
participation?

>> OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien, none at the moment. But I'm
just about to ask so it might take a few seconds for them to type them.

>> SEBASTIEN BACHOLLET: Okay. Christopher? Just as a --

>> CHRIS BUCKRIDGE: Just as a filler until somebody else has the courage to speak. I
would just like to pick up on a couple of Dimitri's points about the European Union
internal market. I think he's made a very fair point which is fairly general. That the
eCommerce was a bit overhyped in the 1990s.
There has been significant growth. But there are two factors which would be equally
relevant for Trinidad and Tobago and perhaps even for Canada.

One is that -- one is language. However free and open the market is online services are
sensitive to the language that's being employed. And in current circumstances that
tends to privilege the local national market. And for example it occurred to me to
wonder to what extent your constituencies in small and medium-sized enterprises in
Trinidad and Tobago were addressing your native language in Spanish and French
markets which are not insignificant.

The other issue is the liberalization of the post offices.

I regulate post birthday presents to I won't tell you how many grandchildren. And I'm
not stingy. But usually cross-border the postal cost is higher than the value of the
content of the package. Now why the post offices wish to cream off as much as possible
from the cross-border market less than the local market I'll leave that to you but I will say
there's trade on the cross-border products especially on small scale in the local level and
I think that would affect the extent to which the Internet can promote cross-border
eCommerce.

And of course I'll pick up on the last point. It depends a great deal on the availability of
the broadband connection and a reliable one. And as we've heard from other panels
from the speeches yesterday, although the Internet penetration is welcomely growing
quite rapidly there's still vast areas that the world economy would not be able to use the
Internet in the way Sheba was hoping that all of her small and medium-sized enterprises
in Trinidad and Tobago would be able to do so. Thank you.

>> SEBASTIEN BACHOLLET: Thank you, Christopher. May I ask Alan to take -- Alan?
Okay? One quick question. And then the last presenter will be able to speak. Two?
Okay.

>> Excuse me; I know you said it already but it's for the transcript if you can say your
name again.

>> KARLENE FRANCIS: My name is Karlene Francis. I'm from the OECS, Organisation
of Eastern Caribbean States.

The point was raised that perhaps the GATS Agreement should take care of some of the
concern about the legal regulator framework. But in my mind I'm wondering why is it
that none of the developing countries seem to either -- or are using the provisions? So if
you can comment, please?

>> LEE TUTHILL: Well, I think what it is is a little bit of cross fertilization from say for
example ministries of trade which can be quite active in Geneva. And their
dissemination of what they are doing into other ministries. Usually when we have a
national event and we made meet with the trade officials we encourage them to have for
services at least as many other ministries as possible that deal with these issues. And
there is a proposal that was led by India. But in which at least a dozen developing
countries were members that request that they want from not just developing countries
but some of the secondary markets for outsourcing and call centres that they want to see
more in the way of guaranteed market access commitments on an awful lot -- a long list
of IT-enabled services.

The list became longer and longer because some of the members of the group were more
interested in the lower end BPO and going all the way up to some of the knowledge
services like financial advice.

So there are governments who are doing this.

I've worked -- had -- very recently was given a regional project in the Caribbean and I
have been disappointed about the activity or lack thereof CARICOM in this WTO request
process to get commitment on things you want. Variety of political intervening factors I
won't go into here.

On the other side of course Antigua's case -- the case against the US on it's gambling
restrictions was brought by Antigua it was seen very much as the very small guy going up
against Goliath and it's interesting they won a case in a fashion they won their case by
using -- by the Exceptions Provision that I was describing which is why I think it's so
important to the future of perhaps an increased level of regulation of Internet access
providers and the like. They essentially lost their case on Article 14 because the US
persuasively argued that -- I'm grossly oversimplifying here. But persuasively argued
that there was a risk of online gambling of children going in. Addicts who had been
restricted from access to casinos doing it which you could control in a physical casino so
the public policy objectives like this took precedence.

However Antigua then won the case because they could prove that there were certain
aspects of gambling which the US did allow to happen online and this idea of
discrimination or if in fact you had this wonderful objective that we agreed was
important enough for you to have restricted Internet gambling, then you're
contradicting yourself by allowing some forms of gambling to happen online and the
ruling was that the US had to -- this is interesting how the WTO works. In Antigua, they
had the first experience seeing how online trade case could work. The choice was to
either get rid of that little area where they are allowing online gambling. I think it was
offtrack betting. So that no gambling was allowed or to allow other forms of gambling.

So what happens when you know you try to get rid of the offtrack betting? It has a huge
lobby. A very strong lobby that comes to the floor. So they are being forced to reconsider
the whole banning of online gambling in other areas because the lobby in favor of
offtrack betting online is so strong.

But that's in effect the beauty of the WTO. You finish your work at the legal level and
then you let the domestic players get at each other and often they are the forces that then
encourage a greater level of liberalization by bringing these factors.

But I think that there is probably in the IT area and the telecom computer -- telecom area
at least, which itself often regulates Internet a better awareness of developing countries
than a lot of other aspects of the GATS in part because we had dedicated negotiations in
the telecom and IT area that at least regulators are often more aware of the international
rules than in sectors that have been sleepier perhaps.

But it's far from perfect.

>> SEBASTIEN BACHOLLET: Thank you, last question, please.

>> RODNEY TAYLOR: Thank you, Rodney Taylor from the Caribbean
Telecommunications Union living in Trinidad my observation with respect to the
presentation so far is that I think the whole problem is for developing countries and
eCommerce really I think has not been fulfilled primarily because I think there's a huge
capacity issue. And even if we -- even if we were for example to offer our traditional
products and services online, there's a question of whether or not we can -- we have the
capacity even if we got 1% of global trade in our respective goods and services whether or
not we have the capacity to do it.

And I think what we need to do is foster ready innovation within region. Why, for
example, are we seeing the Googles and the Facebooks and these kinds of companies
originating out of the Caribbean for example? And the CTU has established an
Innovation and Entrepreneurship Trust that seeks to promote innovation particularly
among young people in Jamaica for example you have a mobile phone penetration of
110 or 20%. So at least everybody has at least one and a half mobile phones.
>> Three.

>> RODNEY TAYLOR: Okay. Three? Everybody has three mobile phones why aren't we
developing applications for mobile phones why are we still thinking of traditional
products and services that really and truly we don't have the capacity to create outside of
our borders?

>> SEBASTIEN BACHOLLET: Any panelists who want to -- if not, I will ask Alan to make
his presentation. And maybe answer part of this question during the presentation. If
not, welcome back after. Thank you.

>> ALAN DAVIDSON: Excellent. Well, well good morning, my name is Alan Davidson
with Google and I would like to thank the organizers for having us here today. And
despite our technical difficulties having spoken downstairs yesterday I just want to say
how much I appreciate the acoustics of this room. They are wonderful.

And for my presentation I just really wanted to focus on some of the impediments to
trade that companies like Google and those of us who focus to Christopher's point more
on the movement of bits than atoms I think are increasingly facing.

So it's a relatively simple story. I think over the last two decades the Internet has
transformed productivity, job creation, access to new markets and international trade
generally. I think many agree. We've heard some of those stories already today. But our
concern is that in some ways this engine of economic growth is now increasingly under
attack. Or threatened in some ways by policies, governmental policies, that are
restricting the free flow of information online. And these restrictions can be viewed as
erecting real substantial barriers to trade. They threaten the open architecture and
freedom that's been the key to the Internet's economic success.

So our hope is that policymakers will develop and aggressively pursue in agenda in part
through trade structures that exist today and perhaps through new ones that foster the
free flow of information online and protect it. So let me try to unpack that a little bit.

First, you know, I think we have already heard some of the great stories about how about
the potential of the Internet to transform commerce. And we believe it's creating and
continuing to create really an astounding array of opportunities around the world. In the
US alone recent studies showed that more than 3 million Americans now owe their jobs
to the Internet. Hundreds of thousands of businesses are using the Internet to reach
once inaccessible markets to them and we think this is having a significant ripple effect
and we can talk more and have talked a little bit about some of the challenges and
opportunities that are out there. But my focus and the second point I want to make is
the Internet architecture of openness and freedom which has been a fundamental
prerequisite for generating these economic benefits is increasingly being challenged.

Part of what we have seen is that what was once seen as a kind of unstoppable
technology promoting the free exchange of ideas and information is actually a medium
that can be restricted censored or disrupted and that's been very much Google's
experience in the last few years we've had major service blockages in over 25 different
countries. For example right now you can't get access to YouTube in Turkey because of
some videos that have been posted criticizing the founder of the Turkish Republic. We
have been criticized in Pakistan over videos, YouTube has been blocked a year and a half
over in China. It's just not those countries. It's a broad set of countries. It's not just
Google that faces this, Facebook, Twitter, other Search Engine companies have had these
issues freedom house has indicated in a recent study over 40 governments engage now
in what they view as broad online censorship.

I say that there's a variety of forms that this kind of blocking can take part of it is
wholesale blocking of access to service which I was just describing but it can take more
subtle forms licensing requirements that force companies to remove particular kinds of
content. Certain kinds of take-down requirements. Encouragement of self censorship of
users of companies through surveillance or monitoring of users, threats of legal action
and particularly a concern that often these are done without a tremendous amount of
transparency. And as a result, it's becoming harder for companies to compete in certain
foreign markets where the governments choose to favor local firms or impose these
kinds of regulations.

Some of the particular kinds of impacts. Blocking Internet services outright or regularly
disrupting them as we faced in some of the examples I mentioned we believe is in
essence a non-tariff trade barrier that's not normally tolerated in trade regulation.
Demanding that data be stored in a country or other kind of Internet regulations that are
designed to favor local companies can be viewed as a local presence requirement. Or
discriminatory practice in favor of a local -- local players.

We are concerned about imposing requirements on online service providers when those
requirements aren't made public which has certainly been an experience that we've had
and it's a departure from the transparency regime we have already heard about.

And finally, we've experienced and others have, as well, the issuing of orders to online
service providers or others without any legal process or appropriate legal process which
we also think is a departure from the due process requirements that we have heard
about.

So taken together, I think our experience is that we -- that many companies are facing a
very difficult international trade environment.

So what can we do about it? I think there are three things that we propose.

First to focus on and publicly highlight what we view as some of these unfair trade
barriers and practices by governments that censor or disrupt online services. So part of it
is just being out there and talking about it and getting information out there.

But a second is to try to pursue and hold accountable governments that would impede
the free flow of information. Including taking appropriate actions under the regimes that
exist already. And I think we have just begun to play out how those existing tools could
be used. And the final thing and I'll say a little bit more about this is just to figure out
whether we need to craft new trade rules. Including some of the bilateral or regional
agreements that are being developed that could better discipline the actions that impede
the free flow of information on the Internet that I've discussed.

In particular you know one of our big pitches to the US Government and we hope others
will consider this as well is to insist that Free Trade Agreements explicitly recognize the
concerns about the free flow of information online. And establish a presumption in favor
of it.

So the Korea-US Free Trade Agreement which has already been mentioned by Dimitri is
a good example which includes a provision on the free flow of information explicitly and
I think that's a very good start.

We have also spoken within the United States about the potential for the transPacific
Partnership Trade Agreement which is under development to include specifically
include stronger provisions in this area and we're hopeful that people will think about
that.

A second and really important area for companies like Google is promoting -- and we
actually think for our users and business partners, as well, is promoting stronger
transparency rules.

One of the biggest concerns that we have is that we get tremendous number of requests
to remove information from the Internet. Requests for information about our users.
These can have a big impact on our ability to provide our services. And often it's done
without a lot of public knowledge or knowledge of our users. Google itself has tried to
take a step to give more information to people about these kinds of requests. Or orders.
We have a new service that was launched this spring. It's on
Google.com/Governmentrequests or you can type the word government requests into
your favorite Search Engine it's the first result on Bing I'll say if you do it.

And you can see this tool that we have created which is -- it's a map of the world. And
shows all of the requests that we've gotten from any particular country to either remove
information from the Internet or to provide information about users. And it's kind of
shocking when you take a look at it because there really are a huge number of these
requests.

Our hope is it's an example of the kinds of transparency that other companies might
provide or governments themselves might provide and really in the longer run what we
need is for governments to go beyond the current rules and for example publish on a
regular basis all of the orders or requests that they make of Internet information services
or the limits they put on information on the Internet. To publish in advance the
measures that they want to impose to -- that would affect information services. And to
publish the terms of licenses that they impose on information services and this would go
a hugely long way to giving more information to the user community but also to the
business community but what's being faced out there and then the last thing I should say
and then we should really turn to questions is that a third area where we hope that there
will be more attention is about the issue of local investment before Internet services can
be proved.

We really believe that service providers particularly in the bits and atoms world should
be able to provide their services either on a cross-border basis or through local
investment placement of servers creation of data centres but they should be ensured the
same treatment either way and this is an area where we have seen increasing attention --
or increasing tension I should say and we hope that there will be more attention paid to
it.

So in conclusion I would just say, you know, our belief that it's in the Internet age
barriers to the free flow of information is in effect barriers to trade. And they ought to be
addressed through the existing frameworks that we have. Through new frameworks, if
we need them. They present a tremendous challenge. But there's also a great
opportunity for Government officials to align our trade policy with the needs of the 21st
Century information economy. And we look forward to working with you all and with
them to do that. So thank you for your time.

>> SEBASTIEN BACHOLLET: Thank you, Alan. Now it's time to have more questions.
Okay.

As we have said, please give us your name, affiliation, country.

>> SOKOL HAXHIU: Okay. My name is Sokol Haxhiu. I'm from Albania representing the
Centre for Development and Technology. Regarding what you said for the Government's
request so you comply with any request you receive from the governments.

>> ALAN DAVIDSON: No. To be honest --

>> SOKOL HAXHIU: If not --

>> ALAN DAVIDSON: Simple answer.

>> SOKOL HAXHIU: And this was a second: If not, where do you base that?

>> ALAN DAVIDSON: I would say this is true for most companies that operate in this
space that your -- that the answers vary and are very fact dependent. We all have
different structures out there. But I think in most cases we are very eager to try to work
with law enforcement where the requests are appropriate. We have a team of people and
I can tell you at Google who work 24 hours a day to receive these requests, evaluate them.
And we are -- most of our services are offered out of the United States. And need to
comply with US law. And there's a set of paths for how different requests are handled
under the requirements of US law. And then -- and we evaluate requests and follow the
legal path that we're required to under US law. Different companies operate in different
ways. But that's I think the general approach.

And so it's not every request that can be immediately answered. But we have a team of
people. And we regularly do work with governments around the world to deal with that
request.

>> SOKOL HAXHIU: Thank you.

>> AUDIENCE: I'm from Hanyang University in Korea. My question goes to Lee. If I
read a book online on Kindle is this a trading service or trading good if we need a bigger
framework?

>> LEE TUTHILL: You know, that's one of the issues we struggled with in our
eCommerce Work Programme. And it's actually one of the reasons our eCommerce
Work Programme is more abundant because there's a stalemate on that particular issue
and one of the sides of the aisle feels the eBook is in fact a service and the physical book
was a physical embodiment that was there before the Internet exists and the other side
feels like these are virtual goods because they were always goods throughout history so
let's consider them virtual goods. Politically there's that debate. If you take something
as straightforward as a book I can make it sound straightforward but when you start
getting into more sensitive cultural products, it also starts to get much more
complicated. So I could answer your question during the coffee break but that's the
answer I need to give that shows where the WTO stands on that right now.

If you have any . . .

>> DIMITRI YPSILANTI: Well I would think if you buy a book from Amazon US and you
live in Korea, then it's -- then it's a trade in services. I can say that because we don't have
-- as my part of OECD doesn't have responsibility for trade. So I'm not committing
anyone.

I did -- if I may, I did have a question for Lee, though, in the context of Cloud Computing.
Transporter storage of data. Would that be considered a trading activity or not?

>> LEE TUTHILL: You know, we've been exploring again -- when we want to say the
neutral word we use for both your question and this question is classification issues.
And we are really combing through the underlying definitions of what we use to try to
commit on our very antiquated -- they date to 1991. And you know they were being
negotiated for the years in the '80s. So I mean, Internet wasn't even commercialized yet
then.

And we're trying to figure out how you could best adapt what we have to answer
questions like that.

I think we all believe it's in there somewhere in computer services or online at a telecom
services or a combination thereof and I think we would like to encourage people to not
think it's not in there. Very much so because there's quite a lot of important
commitments in these areas that should mean something. But exactly which service it is,
web hosting we get asked all of the time that's a form of storage then your question goes
further what if it's stored in a Cloud. You know, also the question raises important
questions of legal jurisdiction which in that GATS isn't so much a question for national
lawmakers as it is of a question of standing up for an injured party and I think you go
back to the corporate structure rather than the geographical place but some people
question that.

>> SEBASTIEN BACHOLLET: Thank you. Any questions? Last questions? Go ahead.

>> LEE TUTHILL: I have a question for Google as to have you considered for example I
think you're right, some of the aspects of what you're worried about do -- are potentially
addressed by what exists in the Services Agreement. But have you given thought to
classification issues for yourself and that conundrum?

>> ALAN DAVIDSON: I think we have. We actually -- I don't want to spill the beans but
we're receiving a paper next week at a conference we're hosting in Budapest on free
expression online. If anybody is interested in hearing more about it I would be happy to
tell you offline where we actually try to explore some of these issues. So I'll leave it to the
real trade nerds at Google I'm not one of them but I say that with the real trade nerds in
the room to get into the details of it but I think we are eager to try to use the tools that
exist and explore how they can be used. And I think that's an important and necessary
starting point before we go out and try to build new ones.

It seems that there are possibility to address some of the concerns that companies are
raising now. And so we're eager to try that.

>> SEBASTIEN BACHOLLET: Olivier, you have a question.

>>OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien, no, I don't have a question.

There's a question from the ISOC Chennai hub which I guess is the to the whole panel.
The starting point for -- is the Search Engine even for transactions not conducted on the
Internet? The first step is to search for information with technology available for
localized searches. Can governments indirectly restrain or prioritize Internet commerce
to local business firms?

>> SEBASTIEN BACHOLLET: Who wants to answer that?

>> ALAN DAVIDSON: It sounds I should probably take a first cut at it. Well, I think our
hope is it's not governments that will be restraining or prioritizing commerce to local
business firms. And that's pretty much our concern that we have raised. And the fear
that in some places already we worry there is preference and pressure towards
preferencing local providers.

I think our hope and expectation is that search in all its different forms will continue to
try to provide relevant information to users for cases that will be -- in a lot of cases that
will be a local result or a local firm. That's often where commerce and information best
resides.

So we expect that to happen. But I think our fear is that we will see pressure from
governments.

I think now right now it's really -- it's been more blunt instruments that actually outright
block services wholesale that we have seen partly because I think the tools available to
Government are relatively blunt at the movement. But we have seen that. And that's our
broad answer.

>> SEBASTIEN BACHOLLET: Lee?

>> LEE TUTHILL: Just very briefly, I think I mentioned in my presentation that for
services national treatment was committable and thus scalable. But were the question to
be limited to preferential treatment in Search Engines for online ordering of goods, the
general agreement on trade and tariffs that covers goods in the WTO, there's no
question. National preferences would be illegal. Because national treatment is an
automatic right for goods-related trade.

>> SEBASTIEN BACHOLLET: Thank you, Dimitri. Or Sheba, do you want to add
something? Yes.

>> SHEBA MOHAMMID: I think we've had a comment on the Search Engine of choice.
So I think we are okay there.

>> SEBASTIEN BACHOLLET: Okay. Thank you. Great.

>> MARIA PUY: My name is Maria Puy. I'm an ISOC Internet Ambassador but also
speaking in my personal capacity. I wanted to ask how do you think -- like it's like a
global question.

How do you think that the countries should face all of the problems related to
authentication of identities regarding eCommerce? It's a big problem. Some of the
countries like Argentina have taken a legal instrument, a concrete legal instrument
regarding electronic signature. But it hasn't been implemented yet. So it's an unuseful
tool for us.

What do you think about this? And how should we -- it be solved by the countries or
globally?

>> SEBASTIEN BACHOLLET: Thank you. Dimitri?

>> DIMITRI YPSILANTI: Yeah, I didn't mention I think that identity theft has been a big
problem. And it's not only a problem international. It's a national problem when people
are purchasing online within their own country.

I also mentioned that there are a number of payment intermediaries, financial

intermediaries that are taking steps so you do not have to divulge your personal
information to the -- online or to the retailer that you are dealing with. So in fact when
you go to make a payment, you divert it -- you divert it to your bank. And then it's -- the
relationship is between your bank and the retailer.

So there's no personal information. So that is one -- at least one way and it seems to me
quite an effective way of cutting down the necessity of providing your detailed banking,
credit card and other information online. And I think that's the way to go is using
intermediaries to take up that function.

>> SHEBA MOHAMMID: Thanks, Dimitri. And I share a concern because in Trinidad
and Tobago similar issue going on where we had a bill and it's getting promulgated and
whether it's licensing or how it should be licensed to CSPs and how do you keep things
technically neutral and it came down to cross jurisdictional issues as we come up with
policies in Trinidad how does that become effective cross borders so I think Dimitri has a
practical solution and how does it keep pace with technology, as well. It becomes an
issue.

>> SEBASTIEN BACHOLLET: Thank you. Olivier, you want to add something?

>> OLIVIER MJ CREPIN-LEBLOND: Maybe I will ask the final question. Where
consumers could participate in this discussion and reflection? Is there one place where
there's a governance place of this issue taking care we discussed that with the IGF
meeting once a year, no more where you have various participants with different
Government sellers and consumers. Where is the best place to be involved in that as an
end users or end customer place?

>> DIMITRI YPSILANTI: Well I mentioned that OECD has the committee on consumer
policy where we look at these type of issues and consumers international which is an
NGO for consumers is involved in the process. Obviously OECD has 33 member
countries we can't have all of the domestic consumer organisations in the meetings. But
they do via consumers international, they do make their voice heard.

>> ALAN DAVIDSON: I would add I think this is -- it's an important question and this is
going to be a dialogue or conversation that's going to be happening in many places for
probably a number of years as we work this out. And so I think you'll see national
governments increasingly engaging in these issues both to get their own national policy
frameworks right but also in the international play. I think Civil Society has a major role
to play partly why we're sponsoring this big event next week but also I hope they will
continue to engage in all of the forums they have but ultimately this is a very important
question for users, small businesses and for industries generally and our hope is we will
see more engagement and have people working together to try to update if necessary
and use our trade framework and to bring it into line and match the needs of the
Internet.

>> SHEBA MOHAMMID: I think another kind of channel we can use is some of the
Dynamic Coalitions that have been formed because a lot of the trader use are cross-
cutting use so freedom of expressions that will be picked up in a few of Dynamic
Coalitions that are out there if they are active or become more active.

>> LEE TUTHILL: Unlike the OECD, the WTO doesn't have -- doesn't -- consumers can't
represent themselves directly. And the consumer issues are indirectly considered rather
than directly considered. But we do expect our governments to in fact bring this
synthesis of views and in a case -- in a few cases when I've attended interagency
conferences at a national level the most interesting debate has occurred when a
consumer rights organisation is invited by the Government to be part of this
consideration of what their trade priorities will be. So that's extremely important that it
happens at WTO that it happens at the national level.

>> SEBASTIEN BACHOLLET: Thank you. Last online question.

>> OLIVIER MJ CREPIN-LEBLOND: Thank you, Sebastien. I have a long question which
will require a short answer.

Major eCommerce and this is from ISOC Great Lakes I will say for the transcript major
eCommerce before listing a seller's product is available in a certain country for instance
a clothing item may not be listed as available in Spain if a minimum quantity isn't
warehoused in Spain for a foreign business to warehouse a minimum volume there
would be ground level barriers could this be another way by which free trade on the
Internet is slowed down directly.
>> SEBASTIEN BACHOLLET: May I ask that you answer your question and you make
your final remarks so that we can close this meeting because we are just on time. It is
great. You do a good job. But if you can do the answer and some concluding remark as
you want. And others as you want. Okay. Dimitri, go ahead.

>> DIMITRI YPSILANTI: Well, I think the question is would this slow down free trade.
And the answer is yes. And it seems to me it's not a very proper way of conducting
eCommerce, eCommerce at the global level, international level, you should be able to get
what you want from where you want. And from the questions it seems that this is a
company taking restrictive action. So it's a big -- a bit odd that retailer from the other
country doesn't find a second way to sell its products in the country. It seems to be an
unfair process of undertaking trade.

>> ALAN DAVIDSON: I would just say, you know, one of the really obvious and exciting
things about the Internet is the ability to sell globally without having to have a presence
globally in every country. And that's both true for this kind of example or for the new
kinds of information services, Cloud Computing services that we're going to be seeing
offered.

So we would -- we would be concerned about the ways that yes, trade could be slowed
down by requirements like this. And it's not obvious how they would play out. As I say
in the bits business. But we have seen more conversation about for example the need to
have servers in a country or to have a presence in a country and I think that would be
very damaging to the possibilities for international trade on the Internet.

So we would be concerned about that.

>> SHEBA MOHAMMID: And I think similarly we are concerned and it really comes
down to global freedom and our boundaries and barriers kind of being constructed right
now and how do traditional trade flows and markets be represented by this knowledge-
based economy. Are there changes that need to be made. We have to think more
creatively about how we approach trade as a whole. I mean there are issues in terms of
what's a good. What's a service. This is almost unchartered territory in some ways. And
I think if we kind of coalesce and continue to dialogue that's the only way to approach it
with issues like Cloud Computing and Cloud sourcing there are new gamuts coming up
all the time and new ways and new avenues for trade, for goods and services for what it is
and the only way to keep at it is to get the dialogue going and realise that everyone kind
of is a stakeholder here that it's not just big corporations but consumers regardless of
what aspect you're involved in with global policy or global citizen this affects you in a
very real way so just keeping that dialogue going I think.

>> LEE TUTHILL: I agree with what everyone before me said about warehousing so I
won't address it directly so forgive me to the questioner and just a final remark I think
why I wanted to serve on this panel after being invited is I think that governments
everywhere are thinking about coming up with national as well as some international
guidelines I've been told or stronger rules on privacy and cybercrime, et cetera. And I
just wanted people to realise that they are not necessarily reinventing the wheel. There
are some disciplines out there.

Many of these concerns fall within what might be our exceptions. But the exceptions
have three very important caveats to them.

You know, basically that are there to ensure that people don't hide trade barriers behind
other public policy concerns and try to give preference to local suppliers or block the
provision of services using what seem to be very, very sacrosanct public policy concerns
as a clover. Thank you.

>> SEBASTIEN BACHOLLET: Thank you very much. I would like you to join me to thank
the panelists for the presentation and very good presentation and explanation. And
thank you, Lee, thank you, Sheba, thank you Alan and thank you, Dimitri and thank you,
Olivier for your remote access participation online in life here.

>>OLIVIER MJ CREPIN-LEBLOND: And thank you to the audience here and thank you
to the audience out here that's watching us.

>> SEBASTIEN BACHOLLET: And thanks go to Siva from India who set up this panel and
I was just acting for him here and thank you very much for your participation and see
you in other areas during this IGF during the next three days. Thank you very much.

(Applause)

(Session ended at 1103)

Link to this transcript on the IGF Web is at page

http://www.intgovforum.org/cms/transcripts/648-80

Video recording of the session is reposted here

http://bit.ly/igf10tradev