South Centre

Address: Chem. de Balexert 7-9, 1219 Genève, Switzerland

Website: https://southcentre.int

Established in 1995, the South Centre is an intergovernmental policy research think tank composed of and accountable to developing country member states. It researches key policy development issues and supports developing countries to effectively participate in international negotiating processes that are relevant to achieving the sustainable development goals (SDGs). The South Centre promotes the unity of the Global South in such processes while recognising the diversity of national interests and priorities.

The South Centre works on a wide range of issues relevant to countries in the Global South and the global community in general, such as sustainable development, climate change, South-South cooperation (SSC), financing for development, innovation and intellectual property, traditional knowledge, access to medicines, health, biodiversity, trade, investment agreements, international tax cooperation, human rights, gender, and the fourth industrial revolution.

Within the limits of its capacity and mandate, the South Centre also responds to requests for policy advice and technical and other support from its members and other developing countries.

The South Centre has observer status in several international organisations.

Digital activities

Innovation and development is one of the issue areas the South Centre works on. As part of its efforts within this domain, it focuses on information technologies. Moreover, digital issues are also tackled in the domain of, inter alia, taxation and the digital economy, data governance, e-commerce, and the fourth industrial revolution.

The South Centre has produced deliverables/research outputs in the following areas: digital and financial inclusion, digital economy, digital taxation, digital industrialisation, and digital trade, among others.

Digital policy issues

Intellectual property rights

In June 2019, it published a policy brief on Intellectual Property and Electronic Commerce: Proposals in the WTO and Policy Implications for Developing Countries, in which it gave an overview of discussions within the WTO on IP and its potential implications for the digital economy.

In September 2020, the South Centre published a research paper on Data in Legal Limbo: Ownership, Sovereignty, or a Digital Public Goods Regime? and in 2022, a research paper on The Liability of Internet Service Providers for Copyright Infringement in Sri Lanka: A Comparative Analysis.

Additional research will be published on IP and digital-related topics in the coming year.

E-commerce and trade

The digital economy is another issue researched by the South Centre in the context of development. For instance, in 2017 it published an analytical note The WTO’s Discussions on Electronic Commerce, in which it explores the stance of developing countries (i.e. readiness in terms of infrastructure, upskilling, etc.) to engage in cross-border e-commerce. Among other things, it highlights challenges such as low information technology (IT) adoption and the lack of electricity supply that limit the uptake of e-commerce activities in Africa for instance. Another analytical note published that same year tackles the impact of the digital economy on micro, small and medium-sized enterprises (MSMEs), and looks into the type of e-commerce rules that could best serve the interests of MSMEs.

The South Centre also provides analyses and organises many meetings to discuss issues such as the WTO E-Commerce Moratorium and the Joint Statement Initiative (JSI) plurilateral discussions on e-commerce.

In 2019, it addressed issues on the regulation of the digital economy in developing countries, namely, the future of work, market dynamics, and data and privacy protection.

The South Centre recently published a research paper on the WTO Moratorium on Customs Duties on Electronic Transmissions. This paper highlights the adverse impacts of the continuing moratorium on developing and least developed countries. Because of the moratorium, almost all developing and least developed countries are losing tariff revenues at a time when they are most needed. With no clarity on the definition of electronic transmissions and thereby on the scope of the moratorium, its continuation can lead to substantive tariff revenue losses for developing and least developed countries in the future.

The South Centre recently issued a statement on the landmark shift of the US Trade Representative’s decision to rein in the Big Tech digital trade agenda under the E-Commerce Joint Statement Initiative (JSI) negotiations.

The South Centre also monitors developments and participates in discussions in the field and across international organisations in Geneva, including the UNCTAD eTrade for All initiative.

In 2022, the South Centre organised/co-organised two sessions during UNCTAD eCommerce week: Data Regulation: Implications for the Digitization of the Economy and Development and Exploring a Global Framework for Data Governance. The South Centre Executive Director also participated in the eTrade for All Leadership Dialogue. See the Centre’s contribution here.

Taxation

The taxation of the digital economy is the single biggest issue in international taxation today. Countries around the world are trying to find solutions for taxing Big Tech companies that operate with very different business models owing to which they are able to escape taxation under outdated international tax rules meant for a brick-and-mortar economy. The key solution being negotiated is known as Amount A of Pillar One of the Organisation for Economic Co-operation and Development (OECD)’s Two Pillar solution. The South Centre has been actively involved in Amount A negotiations, briefing its member states and submitting comments on every single set of Model Rules that have been put out for public comment, articulating the concerns and issues of developing countries. In 2022, we published the world’s first set of country-level revenue estimates on Amount A contrasted with the UN solution of Article 12B of the UN Model Tax Convention. The revenue estimates were published for the member states of the South Centre and the African Union, with whom the study was jointly conducted. We are coming up with a revised set of revenue estimates based on the latest version of Amount A for our member states and these will be released in late 2023. In October 2023, we published another Policy Brief titled Beyond the Two Pillar Proposals: A Simplified Approach for Taxing Multinationals, which offers an alternative policy solution different from those of the UN and the OECD.

We also published a Policy Brief in June 2023 titled Taxation of Digital Services: What hope for the African States? which argues that African countries need to improve digital connectivity to be able to collect more taxes under the OECD digital tax solution of Amount A. This is because the revenue sourcing rules of Amount A allocate profits using digital indicators such as viewing of advertisements, IP addresses, etc.

In the UN Tax Committee, we participated in the 26th Session in New York where we mobilised the developing country members through peer exchanges and briefings and also participated in the negotiations to promote the interests of our member states and other developing countries, inter alia, on the taxation of the digital economy. 

Ahead of the UN Tax Committee session, we published a study on the taxation of computer software. The study on computer software showed that 34 of the South Centre’s member states could have collected $1 billion in taxes in 2020 from computer software sales had there been the corresponding standards by the UN. The Brief helped mobilise developing country support and bring to a close a 20-year negotiation on the taxation of computer software.

We also published a Policy Brief titled Conceptualizing Remote Worker Permanent Establishment, which provided an innovative solution for taxing the emerging phenomenon of Work From Home/Work From Anywhere. 

The UNCTAD Intergovernmental Group of Experts on the Digital Economy invited the South Centre to present to UN member states the policy options for taxing the digital economy. Our presentation was so appreciated that the governments of Palestine and Cambodia immediately requested capacity building on the subject.

Given our expertise in the taxation of the digital economy, we co-organised in June 2023 a Group of Twenty (G20)-South Centre event on international taxation. This was on capacity building for Indian tax officials on the Two Pillar solution and the international tax standards being negotiated in the UN. This was also our first G20 event, and was widely praised and appreciated by the Indian participants. We mobilised international tax experts from across Asia, Africa, and Latin America to share their perspectives on these topics with Indian officials.

We partnered with the United Nations Development Programme (UNDP) to co-organise a Capacity Building Workshop on the taxation of the digital economy in May 2023. The two organisations shared the policy options available to Sri Lanka to tax the digital economy, which included a Digital Services Tax. The workshop was so impactful that within a few days the government introduced a digital services tax and in the record time of two months got it passed by Parliament. We remained engaged and provided technical briefs to the Sri Lankan Parliament, particularly the Finance Committees.

We were also invited to participate in the Addis Tax Initiative (ATI) General Assembly in Zambia where we provided capacity building on ATI member states on the taxation of the digital economy. After the workshop, the Finance Ministry of Zambia reached out to the South Centre Tax Initiative (SCTI) for detailed policy advice.

Multiple news channels and agencies regularly solicit the South Centre’s views on the concerns of the developing countries in international tax negotiations on the taxation of the digital economy.

Sustainable development

The South Centre has delved into the interplay between digital technologies and development on several occasions through its research outputs. In 2006, it published an analytical note titled Internet Governance for Development, arguing that affordable access to the internet allows for better education opportunities, greater access to information, improved private and public services, and stronger cultural diversity. More specifically, the document provided recommendations on issues such as openness (e.g. leaving the policy space open for developing countries), diversity (e.g. multilingualism), and security (e.g. funding of computer security incident response teams (CSIRTs)) to maximise the outcomes of discussions for developing countries at the Internet Governance Forum (IGF).

A year later, the South Centre published the research paper Towards a Digital Agenda for Developing Countries, in which it looks into the conditions, rights, and freedoms necessary for developing countries to benefit from digital and Internet resources. By bringing together several different strands of ongoing discussions and analyses at the national and international levels, it provides a direction for further research and policy analysis by laying the groundwork and creating awareness of the relevance and scope of digital and internet content for policymakers in developing countries.

In 2020, the South Centre continued to research the impact of digital technologies in the context of development. Its research paper The Fourth Industrial Revolution in Developing Nations: Challenges and Roadmap tackles trends in emerging technologies such as big data, robotics, and the internet of things (IoT), and identifies challenges, namely, the lack of infrastructure, a trained and skilled workforce, scalability, and funding faced by developing countries. It goes on to propose a strategic framework for responding to the fourth industrial revolution, which focuses on capacity building, technology incubations, scientific development, and policymaking.

Discussions towards the adoption of a Global Digital Compact (GDC) have been included as one of the proposals made by the United Nations Secretary-General (UNSG) in his report Our Common Agenda (A/75/982). The main objective of this proposal is “to protect the online space and strengthen its governance” based on “shared principles for an open, free and secure digital future for all”. The issue of digital governance is quite complex and includes the need to reaffirm the fundamental commitment to connecting the unconnected; avoiding fragmentation of the internet; providing people with options as to how their data is used; applying human rights online; and promoting the regulation of AI. 

The need to guarantee the implementation of human rights online requires that discussions leading towards the GDC are conducted with upmost transparency, public disclosure, and accountability. Likewise, the private IT sector must respect human rights, apply human rights due diligence and increased accountability, and allow broader oversight from the state and civil society. In some instances, public-private partnerships (PPPs) can be a useful tool to support an inclusive digital transformation, but public participation and oversight of PPPs, guided by strong principles of transparency and the protection and respect for human rights, are necessary to support the transfer of technology, skills, and knowledge needed to promote an inclusive digital transformation. The South Centre has actively engaged with other partners to strengthen multilateralism in this process and to limit the detrimental impacts of multistakeholderism in global governance.  

The South Centre combines expertise in global matters of governance in the discussion of the GDC with the objective of strengthening multilateralism through an intergovernmental process that protects the voices of developing and least-developed countries. We prepared a submission to the GDC on applying Human Rights Online. In addition, our forthcoming research paper considers the discussion on the GDC, the current fragmentation of digital governance from the perspective of developing countries, and the need to increase international cooperation directed towards digital transformation, while highlighting the need to address climate change, the protection of human rights, and inclusiveness as the most relevant issues for developing countries today. 

In light of the global health pandemic, the South Centre, as part of its publication series South Views, shared the perspectives of developing countries on digital health. its challenges and recommendations to overcome these, and harnessing digital technology for education in developing countries, A SouthViews on Access to Medical Equipment in a Pandemic Situation: Importance of Localized Supply Chains and 3D Printing was also published.

In 2020 and 2021, a SouthViews on Technology and Inequality: Can We Decolonise the Digital World?, on Digital Transformation: Prioritizing Data Localization, and An Introduction to the UN Technology Bank for the Least Developed Countries were also published.

A Public Health Approach to Intellectual Property Rights is a virtual help desk on the use of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) flexibilities for public health purposes.

The South Centre has general and specific emailing lists and is moving to institutionally become a paperless organisation.

Future of meetings

In the COVID-19 global pandemic, the South Centre has increasingly used Zoom and Microsoft Teams for online meetings and webinars.

See meetings that the South Centre has organised at https://www.southcentre.int/category/events/the-south-centre-events and https://ipaccessmeds.southcentre.int/ event/ and https://taxinitiative.southcentre.int/event/

Social media channels

Facebook @South Centre

Instagram @southcentre_gva

LinkedIn @South Centre, Geneva

X @South_Centre

YouTube @SouthCentre GVA

World Trade Organization

Acronym: WTO

Established: 1995

Address: Centre William Rappard, Rue de Lausanne 154, 1211 Geneva 21, Switzerland

Website: https://www.wto.org/

Stakeholder group: International and regional organisations

WTO is an intergovernmental organisation that deals with the rules of trade among its members. Its main functions include administering WTO trade agreements, providing a forum for trade negotiations, settling trade disputes, monitoring national trade policies, providing technical assistance and training for developing countries, and ensuring cooperation with other international organisations.

WTO members have negotiated and agreed upon rules regulating international trade, fostering transparency and predictability in the international trading system. The main agreements are the Marrakesh Agreement Establishing the WTO, the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS), and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS Agreement).

Digital activities

Several internet governance and digital trade policy- related issues are discussed in WTO. E-commerce discussions are ongoing under the Work Programme on Electronic Commerce and among a group of 87 WTO members currently negotiating e-commerce rules under the Joint Statement Initiative (JSI) on E-commerce. Discussions focus on several digital issues, including data flows and data localisation, source code, cybersecurity, privacy, consumer protection, capacity building, and customs duties on electronic transmissions.

As part of its outreach activities, WTO organises numerous events such as the Aid for Trade Global Review and an annual Public Forum, which brings together governments, non-governmental organisations (NGOs), academics, businesses, and other stakeholders for discussions on a broad range of issues, including many relating to the digital economy.

Digital policy issues

Telecommunications

In 1997, WTO members successfully concluded negotiations on market access for basic telecommunications services, which resulted in new specific commitments in the sector for a significant part of  WTO  membership.  These negotiations also resulted in the Reference Paper, a set of regulatory principles for basic telecommunication services that various members have inscribed in their schedules of commitments. Since 1997, the number of members that have undertaken market access commitments on telecommunications and subscribed to the Reference Paper has continued to increase as a result of new governments joining WTO through the process of accession. Under the JSI negotiations, participants are discussing a proposal that seeks to update the provisions of the Reference Paper.

Digital standards (1)

International standards are important to the global digital economy as they can enable interconnectivity and interoperability for telecommunications and internet infrastructures. The WTO Technical Barriers to Trade Agreement (TBT Agreement) aims to ensure that technical regulations, standards, and conformity assessment procedures affecting trade in goods (including telecommunications products) are non-discriminatory and do not create unnecessary obstacles to trade. The TBT Agreement strongly encourages that such regulatory measures be based on relevant international standards. The TBT Committee serves as a forum where governments discuss and address concerns with specific regulations, including those affecting digital trade. Examples of relevant TBT measures notified to or discussed at the TBT Committee include (1) measures addressing the internet of things (IoT) and related devices in terms of their safety, interoperability, national security/cybersecurity, performance, and quality; (2) measures regulating 5G cellular network technology for reasons related to, among others, national security and interoperability; (3) measures regulating 3D printing (additive manufacturing) devices; (4) measures regulating drones (small unmanned aircraft systems) due to risks for humans/consumers, interoperability problems, and national security risks; and (5) measures dealing with autonomous vehicles, mostly concerned with their safety and performance.

Cybersecurity

Cybersecurity issues have been addressed in several WTO bodies. For example, the TBT Committee has discussed national cybersecurity regulations applicable to information and communications technology (ICT) products and their potential impact on trade. In the TBT Committee, WTO members have raised specific trade concerns related to cybersecurity regulations. Some of the specific issues discussed include how cybersecurity regulations discriminating against foreign companies and technologies can negatively impact international trade in ICT products. Proposals on cybersecurity have also been tabled in the JSI on e-commerce where negotiations are ongoing.

Data governance

The growth of the global digital economy is fuelled by data. Discussions on how provisions of WTO agreements apply to data flows are ongoing among WTO members. In this context, is particularly relevant, as it applies to trade in services such as (1) data transmission and data processing by any form of technology (e.g. mobile or cloud technologies); (2) new ICT business models such as infrastructure as a service (IaaS); (3) online distribution services e.g. (e-commerce market platforms); and (4) financial services such as mobile payments. The extent to which members can impose restrictions on data or information flows affecting trade in services is determined by their GATS schedules of commitments. Under the JSI, proposals on cross-border data flows have been submitted and are being discussed. These proposals envision a general rule establishing the free flow of data for commercial activities. Proposed exceptions to this general rule are, to a large extent, similar to the existing GATS General and Security Exceptions and relate to, for example, protection of personal data, protection of legitimate public policy objectives, national security interests, and exclusion of governmental data. Issues related to data flows have also been raised by members in other contexts at the WTO, such as in the Council for Trade in Services, for instance, when national cybersecurity measures adopted have been considered by some members as trade barriers.

Intellectual property rights

The TRIPS Agreement is a key international instrument for the protection of IP and is of relevance to e-commerce. The technologies that underpin the internet and enable digital commerce such as software, routers, networks, switches, and user interfaces are protected by IP. In addition, e-commerce transactions can involve digital products with IP-protected content, such as e-books, software, or blueprints for 3D-printing. As IP licences often regulate the usage rights for such intangible digital products, the TRIPS Agreement and the international IP Conventions provide much of the legal infrastructure for digital trade.

These conventions include:

The role of IP in promoting innovation and trade in the digital age has been highlighted in recent WTO World Trade Reports.

IP-related issues are also being discussed in the JSI. Submitted proposals include text on limiting requests to the access or transfer of source code. The source code or the data analysis used in the operation of programmes or services is often legally protected by IP law through copyright, patent, or trade secret provisions. The main goal of the JSI proposals on access to source code is to prevent members from requiring access or transfer of the source code owned by a national of another member state as a condition for market access. Some exceptions to this general prohibition have also been proposed. For example, for software that is used for critical infrastructures and public procurement transactions.

Electronic commerce

WTO agreements cover a broad spectrum of trade topics, including some related to e-commerce, which has been on the WTO agenda since 1998 when the ministers adopted the Declaration on Global Electronic Commerce. The Declaration instructed the General Council to establish a Work Programme on electronic commerce. In that Declaration, members also agreed to continue the practice of not imposing customs duties on electronic transmissions (the ’moratorium’). The Work Programme provides a broad definition of e-commerce and instructs four WTO bodies (Council for Trade in Goods; Council for Trade in Services; TRIPS Council; and the Committee on Trade and Development) to explore the relationship between WTO Agreements and e-commerce. The Work Programme and the moratorium on customs duties on electronic transmissions have been periodically reviewed and renewed. At its recently concluded 12th Ministerial Conference (MC12) in June 2022, WTO members agreed to reinvigorate the Work Programme, particularly in line with its development dimension, and to intensify discussions on the moratorium, including on its scope, definition, and impact. Furthermore, members agreed to extend the moratorium on customs duties on electronic transmissions until MC13 (2).

At MC11 in 2017, a group of members issued the Joint Statement Initiative (JSI) on E-Commerce to explore work towards future WTO negotiations on trade-related aspects of e-commerce. Following the exploratory work, in January 2019, 76 members confirmed their ‘intention to commence WTO negotiations on trade-related aspects of electronic commerce’ and to ‘achieve a high standard out- come that builds on existing WTO agreements and frameworks with the participation of as many WTO members as possible’. Negotiations are continuing among 87 members (3) and are structured under 6 broad themes, namely enabling e-commerce, openness and e-commerce, trust and e-commerce, cross-cutting issues, telecommunications, and market access. JSI participants have reached a high degree of convergence on e-authentication and e-signatures, e-contracts, open government data, online consumer protection, unsolicited commercial electronic messages (spam), transparency, open internet access and paperless trading. Negotiations on electronic transactions frameworks, source code, cybersecurity, electronic invoicing, privacy, telecommunications, and customs duties on electronic transmissions continue. On the margins of the MC12, the co-convenors of the JSI (Australia, Japan, and Singapore), issued a statement underlining the importance of developing global rules on e-commerce and, together with Switzerland, launched the E-commerce Capacity Building Framework to strengthen digital inclusion and to help developing and least developed countries to harness the opportunities of digital trade.

Access (4)

Information Technology Agreement (ITA-I and ITA-II)

The ITA-I was concluded by 29 participants in 1996. Through this agreement, participating WTO members eliminated tariffs and other duties and charges (ODCs) on hundreds of ICT products – including computers, laptops, servers, routers, communication devices (i.e. mobile telephones),  semiconductors, semiconductor manufacturing equipment and parts thereof – to foster the development of ICT global value chains and facilitate greater adoption of the ICT products that lie at the core of a global digital economy and power the downstream innovative and competitive capacity of every industry that deploys them. Currently, 83 WTO members are participants in ITA-I, accounting for approximately 97% of world trade in ITA-I products. As technology continues to evolve, ICT is found at the core of an ever-increasing range of products. At the MC10 in Nairobi in 2015, over 50 WTO members concluded ITA-II negotiations and agreed to expand the ITA product coverage by around 200 products. ICT products such as GPS navigation equipment, satellites, and medical equipment were included and tariffs on these products have been eliminated among ITA-II participants. At present, the ITA-II consists of 55 WTO members, representing over 90% of world trade in ITA-II products. The ITA is being discussed in the JSI under the market access focus group.

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1-The issue of digital standards is addressed as ‘standards and regulations’ within the work of WTO.

2-WT/MIN(22)/32; WT/L/1143

3-87 Members as of end of September 2022: Albania; Argentina; Australia; Austria; Bahrain, Kingdom of; Belgium; Benin; Brazil; Brunei Darussalam; Bulgaria; Burkina Faso; Cameroon; Canada; Chile; China; Colombia; Costa Rica; Côte D’Ivoire; Croatia; Cyprus; Czech Republic; Denmark; Ecuador; El Salvador; Estonia; Finland; France; Georgia; Germany; Greece; Guatemala;Honduras; Hong Kong, China; Hungary; Iceland; Indonesia; Ireland; Israel; Italy; Japan; Kazakhstan; Kenya; Korea, Republic of; Kuwait, the State of; Latvia; Lao People’s Democratic Republic; Liechtenstein; Lithuania; Luxembourg; Malaysia; Malta; Mauritius; Mexico; Moldova, Republic of; Mongolia; Montenegro; Myanmar; Netherlands; New Zealand; Nicaragua; Nigeria; North Macedonia; Norway; Panama; Paraguay; Peru; Philippines; Poland; Portugal; Qatar; Romania; Russian Federation; Saudi Arabia, Kingdom of; Singapore; Slovak Republic; Slovenia; Spain; Sweden; Switzerland; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Thailand; Turkey; Ukraine; United Arab Emirates; United Kingdom; United States; and Uruguay

4-The issue of arbitration is referred to under the issue of ‘market access’ within the work of WTO.



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