It’s Not a Small E-Commerce World, After All

If there is a single issue that threatens to stop e-commerce development in its tracks, it is the issue of which country has jurisdiction over disputes concerning cross-border electronic transactions.

The technology design that drives electronic commerce does not recognize things like cultural differences, governmental wranglings and border conflicts.

E-commerce already operates in developed countries across the earth, but so far, there are no agreements or regulations to which all wired nations subscribe.

For example, consider an Internet user in Italy who has a complaint with the manner in which a U.S.-based e-tailer has handled his order. To whom does he take his problem if the Web merchant does not satisfy him? Moreover, do Italian or U.S. laws apply?

Such problems continue to baffle the international business community and the dozens of governments struggling with the issue of cross-border regulation of e-commerce. Who is responsible for what, and who should decide how disputes should be resolved?

Among the stumbling blocks: conflicting consumer protection, intellectual property and tax laws, language barriers, a lack of tech-savvy legislators worldwide, and perhaps most significantly, increasing isolationism even among democracies.

Same Time, Next Year

The monumental task of researching, negotiating and determining guidelines for international e-commerce dispute resolution falls to the Hague Convention on Jurisdiction.

Those who follow this ongoing saga will remember the 1999 debacle, when the participating countries politely agreed to disagree and table the argument until further notice.

Further notice has arrived, and on February 28th, representatives from countries with much at stake will gather in Ottawa for preliminary discussions. In June, the full Hague Convention will give it another go.

The conventional wisdom at the moment is that what happened in 1999 is likely to happen once again.

A critical variable now is the George W. Bush administration’s nationalistic tendencies. On top of that, the President has not indicated a sense of urgency in matters related to international e-commerce.

Old Mentality, New Commerce

Bush, et al, are not alone in their protective isolationist approach. After all, the world is still reeling from any number of international dramas that served to further separate individual nations, rather than unite them for a common cause.

Many of the world’s power-brokers and decision makers are of a generation that lived through the Cold War and the race to conquer outer space. Those times served the competitive spirit of world nations, but did little to teach us how to collaborate.

Instead, history has educated us in the fine art of adversarial relationships.

U.S. Role

That may be why the U.S., for its part, has thus far been a proponent of the right of sellers to determine their jurisdiction in business-to-consumer (B2C) transactions.

Further, the U.S. has expressed some support for a proposal that would allow intellectual property disputes to be settled exclusively in the country where the complaining party has registered its trademarks.

In short, this country has not pushed for a real inclusive, international tribunal to legislate or control e-commerce jurisdiction.

That’s Old World thinking in a New Economy.

Attitude Problems

Regardless of which country is the most progressive or forward-thinking for e-commerce, many countries still look to the U.S. to set the tone for issues that affect the free world, or so we believe.

So it’s particularly discouraging to note that although the Hague meeting is scheduled for early summer, it is not expected to reach accord at that time on these issues. Final negotiation sessions have not even been scheduled.

Here is what one U.S. official, Jeffrey Kovar of the State Department, had to say about that at a Federal Trade Commission meeting early in February: “We see no need to schedule a meeting if there’s a possibility it won’t succeed.”

That could be interpreted as the U.S. taking the position that there is nothing to be gained by even exploring the issues.

Line in the Sand

If Kovar is indeed speaking for the Bush administration, it sounds as though our government will not work with the dozens of other nations involved, until and unless we are assured that results of the negotiations will meet America’s full satisfaction.

No compromise and no negotiating apparently equals no deal.

Once again, this attitude sets participating nations up as adversaries instead of collaborators.And once again, e-commerce development is delayed indefinitely.

What do you think? Let’s talk about it.