During the height of the dotcom boom, at a Work-the-Web
conference, an American got very angry that European web-sites were
registered as *.com. “Dotcom is American”, he flustered “Stop
trying to muscle in on our turf”.
In this article:
More information‘British Jobs for British Workers’ echoes the
same protectionist sentiment that lurks below the surface of
globalisation. Historically the incumbent rich tell the poor to
adopt a liberal policy stance but when the rich become impoverished
expect the weather to turn. Right now the protectionist wind is
blowing and its advocates are in the ascendency.
What will be the knock-on effect to the Internet - the
technology that knows no boundaries?
Censorship
The
Great Firewall of
China is an example where strict censorship is both cultural
and political protectionism. At the other end of the spectrum
filtering at home is a way of protecting your family. Businesses do
the same. Who knows when democratic governments may decide it is
better for you not to visit certain websites by way of carefully
camouflaged protectionist measures designed to help their nation's
workers or companies at the expense of those next-door.
Protectionist
Tendency
A spat of such protectionism was seen in the
internet gambling
restrictions passed by United States, with the World Trade
Organization (WTO) saying the provision was illegal. This issue,
clouded with hypocrisy, since the US government legalised the
gambling they have a financial interest in , for example, online
gambling on horse racing, while they outlawed international
companies from competing in internet gambling market.
Digital Revival
If the internet has been a driver of globalisation and the world
economy is now in turmoil, partly because of its ubiquity in the
financial sector, what restrictions may we expect? On both sides of
the Atlantic political rhetoric is predicated on the fact that
digital industries will pull us out of the current slump.
Just about every developed country’s leaders claim their economy
will be leading the "Great Digital Revival". This shift to a
digital, knowledge-based economy, prompted by new goods and
services, may be the engine for future growth, competitiveness and
jobs but will it be a collaborative world or one where
self-interest will prevail?
If e-commerce is seen as the route out of depression and if
everyone is after the biggest slice of pie then we’re in for a zero
sum game that will get dirty.
European Directive
The European Union (EU) placed the information society at the
heart of its strategy for the 21st Century and launched a series of
grand support and promotion actions like the
eEurope action plan.
As early as 2000, it set up three pillars of a strategic goal to
strengthen employment, economic reform and social cohesion as part
of a transition knowledge-based economy.
They proposed:
- An economic pillar i.e. preparing the ground for the transition
to a competitive, dynamic digital industrialised market.
- A social pillar designed to modernise the European social model
by investing in human resources and combating social
exclusion.
- An environmental pillar, to draw attention to the fact that
economic growth must be decoupled from the use of natural
resources.
Digital Initiatives
A socio-regulatory framework is set for
Gordon Brown’s UK Digital Industry initiative. However, while
e-commerce has a positive impact on the business sector; there are
doubts about productivity growth in particular.
In previous techno-industrial revolutions, efficiency gains have
helped to improve living standards - one of the goals of progress.
Looking at the successes and failures of internet businesses shows
that the value of information communication technology (ICT) for
development lies not so much in the share of the global economy
that this sector represents but in the changes that ICT introduce
in the efficiency of businesses that incorporate them.
Regulated
Competition
The purpose of competition law is to maintain free competition,
not to restrict business models and practices but as tariff
barriers have fallen, standards, technical regulations and
conformity assessment procedures have become increasingly visible
as impediments to international trade.
The European Union (EU) and the World Trade Organization (WTO)
have been working on removing obstacles to electronic commerce by
establishing clear rules for online trade.
The US government's view that no duties should be imposed on the
import of online products and services seems to be in line with
this, though the EU takes a tougher line than the US in calling for
data protection rules to ensure the protection of privacy of
individuals.
Crisis Management
The financial crisis has now affceted the whole economy,
hitting the service sector as much as manufacturing and
services with only consumer staples and healthcare holding-up
well.
With factories closing, unemployment rising, Governments are
intervening in their economies as a matter of ‘economic
security’.
Expect them to protect domestic industries from imports and
global markets threats. Trade protectionism differs from legal
measures to protect trade. It is an abuse of remedies provided by
multilateral trade rules.
This kind of protectionism is morphing into more complex and
disguised forms, ranging from conventional tariff and non-tariff
barriers to technical barriers to trade, industry standards and
industry protectionism.
Beggar thy neighbour
The internet was mainstream in the election of President Barrack
Obama
(
UK political parties will have noted this), who started his
campaign from scratch with few resources and little name
recognition. His Presidency is spawning multiple websites mainly
directed to the domestic market.
But this internet savvy Barrack Obama, hails Abraham Lincoln as
his hero. Lincoln called himself a "Henry Clay" tariff Whig,
opposing free trade and implementing a 44% tariff during the
Americam Civil War in part to pay for infrastructure and protect
American industry.
The economic principle was the law of self-preservation. With
the tax dollars the US is going to spend - spawning massive debt –
it is not surprising if their sentiment is to keep money inside the
country and not enrich foreign interests.
Protectionism though is a whole different ball-game if there's a
round of beggar-thy-neighbour policies and a war of subsidies -
everybody will be worse off as it has been a feature in driving
past economic downturns into deep . Let’s hope we’re not treading a
path to conflict. Until then sell as much as you can.
For more
information:
- Rules and Regulations for Online Trading
There are specific regulations associated with online trading in
the UK, apart from those concerning payment processing. For
example, it is illegal to take payment for goods before they are
dispatched and you must provide a data protection consent form
- The Electronic Commerce (EC Directive) Regulations 2002
- The Consumer Protection (Distance Selling) Regulations
2000
- The Data Protection Act 1998