Benefits from e-commerce provisions in TPP actually non-existent

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Problems? Oh, the Trans-Pacific Partnership has a few! Read about them all in the new series The Trouble with the TPP.

As part of the U.S. effort to drum up support for the TPP, President Barack Obama enlisted the support of eBay, sending an email to 600,000 merchants that claimed that the agreement would help e-commerce and small merchants. That message was repeated by Andrea Stairs, the managing director of eBay Canada, who wrote an op-ed in the Financial Post that similarly pointed to the e-commerce rules, de minimis customs rules, and the benefits for small and medium sized business.

The Trouble with the TPP is that a closer look at the text reveals that the benefits from the e-commerce provisions, de minimis rules, and the much-touted SME chapter are practically non-existent.

Article 14.6 of the TPP addresses the issues of electronic authentication and electronic signatures, key aspects of ensuring that e-commerce transactions are enforceable. The foundational issue, as found in many e-commerce laws, is that electronic signatures have the same validity as paper-based ones. The TPP provides:

"Except in circumstances otherwise provided for under its law, a Party shall not deny the legal validity of a signature solely on the basis that the signature is in electronic form."

In other words, unless a country rules otherwise, electronic signatures are valid. By providing for the flexibility to determine otherwise, the TPP gives business with no additional certainty with respect to electronic signatures as it remains up to each country to develop its own rules. Additional provisions on electronic signatures contain similar limitations, while the electronic authentication issue is limited to "encouraging" the use of interoperable authentication systems.

The de minimis customs rules are of little help as well. The rules allow low-value shipments to proceed without further customs duties. The eBay Canada op-ed notes that the de mimimis threshold "remains a key barrier to Canadian consumer and small business participation in the global economy." How does the TPP address the issue?  It states:

"no customs duties will be assessed on express shipments valued at or below a fixed amount set under the Party's law."

In other words, it doesn't. The TPP leaves it up to each country to set the threshold and only requires periodic review.

The SME chapter is even weaker. It creates two obligations. 

First, creating a website that contains the TPP text. Additional information, such as tax data, foreign investment regulations or business registration procedures are optional. 

Second, the TPP countries agree to establish a Committee on SMEs that is required to meet once within one year of the TPP taking effect. That's it.

In fact, the chapter notes that non-compliance with these "obligations" are not subject to treaty dispute resolution procedures. These provisions do not meaningfully advance e-commerce. If anything, they serve as a reminder of how little the agreement does to better promote online transactions.

This piece originally appeared on Michael Geist's blog and is reprinted with permission.

Photo: flickr/ Anonymous Account

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