Prof. Stiglitz on digital trade (3 min video)

OWINFS’s Deborah James was invited to an April 12, 2019 event in Washington, DC to launch "A New Multilateralism for Shared Prosperity: Geneva Principles for a Global Green New Deal," by the Global Development Policy Center at Boston University and UNCTAD.

She was able to ask the first question, and noted that civil society groups

“are particularly concerned about the efforts of developed countries to launch a new round of negotiations (at the WTO) focused on digital trade, leaving behind the development agenda forever. We’re particularly concerned about the idea that it seems to be an effort by the biggest corporations in the world, Big Tech, based in the US, to grab ownership over the most valuable resource in the world, data. And we should be thinking about the issue of countries having the sovereignty to use that valuable resource for their national development and digital industrialization; and instead [the corporations want] to keep it private and use it for the most powerful. And I’m wondering if you’re seeing this in your work and if you have any comment?”

Prof. Stiglitz, in response, said:

“Well I’m very concerned. On digital, I think these are really important issues. People talk about data as being the new natural resource. And I think within our own countries, we are gradually beginning to realize the wide set of problems, that these digital behemoths represent for our society, in terms of privacy, market power, manipulation, fake news, a whole set of issues. And there are real efforts going on, particularly in Europe, but also in California, and a few other states, to devise a regulatory framework that addresses all four of these issues. Some countries like the UK have come up with a competition focus that Jason Furman is chairing; Germany has addressed the issue of market power and Facebook. So, there are a number of efforts but what is very clear is that none of these go far enough. And what I see is exactly what you see; that big corporations want to embed in international agreements, a framework that would stop domestic legislation.

“It seems to me that there should be no international agreement until there is a greater clarity about how to regulate them. Or, if there is an international agreement, be very clear that it’s only temporary until there is clarity about what the rules of the game, the regulatory structure ought to be.

“There is another set of issues going on in another forum, that have to do with digital taxation. And there is a lot of concern that the principles of digital taxation, which tend to be focused on destination, where the activity occurs – where sales occur – will be used to shift the right to tax multinational corporations away from where the production occurs to where the consumption occurs. If that happens that would have very adverse effects on developing countries. So, digitalization, the issue of digital, has helped contribute to a revisiting of the multinational tax regime but we have to be very careful about where that revisiting goes and there are some elements of that that give me concern.”