Trans Pacific Partnership eyes 'free' cloud

New technologies part of free trade zone puzzle.

Nine countries negotiating a Trans-Pacific free trade arrangement have agreed to consider whether or not to subject cloud computing to the planned regime.

A statement endorsed by all trade leaders at the latest round of negotiations aimed at developing a Trans-Pacific Partnership (TPP) noted that such an agreement, if achieved, would "set a new standard" for such agreements worldwide.

Significantly, leaders have agreed to consider how emerging technologies - such as the cloud - might help or hinder trade opportunities between member countries.

"New technologies will generate new opportunities for trade and investment among us, but also may raise potential new trade issues we need to address in the agreement so that we can promote trade in these products and services and ensure that all of our economies can benefit," the leaders said.

"For example, developments in the digital economy, such as cloud computing, create new issues not previously envisioned.

"Addressing them will facilitate use of this technology, particularly benefitting SMEs, which will comprise the vast majority of companies in the TPP countries and are the source of most job creation."

The inclusion of cloud computing in a free trade agreement could spell trouble for Federal Government policy that asks agencies to avoid hosting data overseas for privacy and sovereignty reasons.

Such policies may fall afoul of the TPP unless Australia reserves exceptions to the contrary.

The Gillard Government spent yesterday promoting progress towards the free trade agreement.

However, there is no official text available, making it difficult to determine exactly what a TPP might mean for the IT and telecommunications sectors.

Negotiators will meet again in early December and have been instructed to schedule further negotiation rounds for 2012 with a view to an approved text by the end of June 2012.

Further comment was being sought from Australian representatives at the last meeting.

Intellectual property

Under Intellectual Property, TPP countries have "agreed to reinforce and develop [the] existing World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) rights and obligations to ensure an effective and balanced approach to intellectual property rights."

TRIPS was negotiated in the 1980s to "set minimum levels of protection that each government has to give to the intellectual property of fellow WTO members."

It was designed to narrow gaps in the treatment of intellectual property rights across different countries.

TPP negotiators remain tight-lipped on how they plan to further develop TRIPS.

"Proposals are under discussion on many forms of intellectual property", the leaders said.

Property on the TPP table include trademarks, geographical indications, copyright and related rights, patents, trade secrets and data required for the approval of certain regulated products.

What this means for Australian ISPs and intermediaries in practice is unclear.

Earlier in the year, a leak of the United States' TPP position proposed a more aggressive rights regime.

The leaked draft from the Santiago talks outlined extensive new powers for rights holders beyond those required by current law:

• A new legal regime of ISP liability
• ISPs to identify internet users
• Established damages for the rights holder
• Criminal enforcement for technological measures beyond WIPO internet treaties, even when there is not copyright infringement
• Outlawing parallel trade in any copyrighted good
• 95-year copyright minimum term for works for hire

Telecommunications

The TPP agreement is intended to set new rules for trade in telecommunications. Specifically, the text is to promote competitive access for telecommunications providers in TPP markets.

In addition to broad agreement on the need for reasonable network access for suppliers through interconnection and access to physical facilities, TPP countries are said to be "close to consensus" on a broad range of provisions enhancing the transparency of the regulatory process, and ensuring rights of appeal of decisions.

Additional proposals have been put forward on choice of technology and addressing the high cost of international mobile roaming.

E-commerce

The TPP text also promises to address "impediments to both consumer and businesses embracing" e-commerce as a channel for trade.

Negotiators have made "encouraging progress", the leaders noted after the latest round of negotiations, including on provisions addressing customs duties in the digital environment,
authentication of electronic transactions, and consumer protection.

Additional proposals on information flows and treatment of digital products are being considered.