Electronic Commerce: Want to scare a politician? Just say `Net'

Online business has the potential to change the way we live for the better. But first our leaders will have to be won over, says Mark Vernon

Last week, Tony Blair "chatted" online in a stunt to draw attention to electronic commerce. The previous week, James Johnson, chair of the US delegation to the G8 Electronic Commerce Committee, told a conference in Amsterdam that many national governments regard the spread of online business with fear and trepidation.

"There is this attitude that a school kid could bring the whole international banking system to its knees," he said, requesting that his audience of business people be conscious of their advocacy role for the emerging new channel. But do governments have something to be wary of after all? Apart from the arguably misplaced concerns over security, James suggested that electronic commerce, increasingly oblivious to national boundaries, might pose a real threat to the sovereignty of the nation state.

In terms of its social and cultural impact, electronic commerce is comparable in magnitude to the opening up of the spice routes in the rule of Alexander the Great. Recent research from the US government (http://www. ecommerce.gov/emerging) found that 8.2 per cent of US GDP derives from IT - up from 4.9 per cent in 1985 - and that IT companies are responsible for 35 per cent of the growth in the American economy. Hence the Government's mixed reaction to e-commerce.

But the deeper problem is that no institution is ready to tackle the prospect of national models breaking down in the face of an online world. Consider the case of the European Union. Within the European Commission there are any number of directorates general with jurisdiction that intersects with the information economy and the Internet, from DG XXIV, concerned with consumer issues, to DG X, which manages policy-making for the information and communications industries related to content, culture and audiovision.

"A lot of work has to be done simply to get all the people into the same room at the same time," James said. "The trouble with the [Commission] is that in its eagerness to get legislation right, it seeks to develop theoretically perfect models before starting."

Meanwhile, a Japanese delegation at the conference, which was sponsored by Giga Information Group and Arthur D Little, had the idea that every nation should put up an Internet gateway for sites in their country, as a kind of virtual border control. They were quickly dissuaded when given a demonstration of the way the Web works.

"Luckily, the success rate of electronic commerce is far faster than the ability of any government to construct means of control," James said. "So we find ourselves in a state of happy chaos, which is good because the market is doing most of the work."

However, some bodies do have an important role to play. The World Trade Organisation (WTO), for example, has become a favourite in the IT industry because of its action to liberalise the telecommunications markets in the 70 nations that produce more than 90 per cent of the world's telecom business. It has also adopted a declaration to eliminate all tariffs on IT products by 2000 - no small achievement for countries such as India where the rate is set at 80 per cent and represents 40 per cent of government revenues.

"It is not going too far to say that the WTO now sees its role as creating the global environment for electronic commerce," James suggested. "While decisions are made by the vote of government delegations, the deliberations are fairly transparent, and there is opportunity for private-sector interests to be advocated."

Would that the Organisation for Economic Co-operation and Development (OECD), which "has operated in a closed, restricted environment", were so open. It was formed from a post-Second World War body and is a significant player in Cold War politics, and James suggested that its attitude of suspicion has been behind certain restrictions - most recently evident in America's ban on encryption exports. However, the OECD has been successfully lobbied by the American IT sector, indicating the growing power of the industry over direct changes to public policy.

It is at this point that the challenge to national sovereignty rises like a spectre in the minds of at least some world leaders. The Malaysian Prime Minister, Mohammed Mahathir, famous for his advocacy of the now- floundering "information super-corridor", has been one head of state to give voice to this concern. He recently asked the World Bank to sponsor a conference on how to preserve sovereignty against the online onslaught, to no avail. Other countries, in rather less anomalous positions than Malaysia, may be persuaded of the need, too. Germany, for example, recently said it would not recognise the digital signatures of other countries without agreeing specific treaties with each, in a move seen by many as an act of naked protectionism.

This year is a crucial one for resolving these meta-political issues, not only because the electronic commerce market will reach critical mass but because other bodies, such as the United Nations Conference on International Trade Law, will begin rolling out its Model Law to promote paperless communication. And perhaps, by the end of it, Tony Blair will also realise that the Internet is more than just something to do with an Italian football team.

Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
filmReview: Sometimes the immersive experience was so good it blurred the line between fiction and reality
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
art
Arts and Entertainment
Crowd control: institutions like New York’s Metropolitan Museum of Art are packed

Art
Arts and Entertainment
Cillian Murphy stars as Tommy Shelby in Peaky Blinders

TV
PROMOTED VIDEO
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show

TV
Arts and Entertainment

art
Have you tried new the Independent Digital Edition apps?
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Dress the Gaza situation up all you like, but the truth hurts

    Robert Fisk on Gaza conflict

    Dress the situation up all you like, but the truth hurts
    Save the tiger: Tiger, tiger burning less brightly as numbers plummet

    Tiger, tiger burning less brightly

    When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
    5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

    In grandfather's footsteps

    5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
    Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

    Martha Stewart has flying robot

    The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
    Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

    Do women cyclists need 'pootling lanes'?

    Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
    A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

    A tale of two presidents

    George W Bush downs his paintbrush to pen father’s life story
    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

    The dining car makes a comeback

    Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
    Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

    Gallery rage

    How are institutions tackling the discomfort of overcrowding this summer?
    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

    Eye on the prize

    Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
    Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

    Women's rugby

    Tamara Taylor adds fuel to the ire in quest to land World Cup
    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices