1. Purpose and structure
The e-commerce Chapter sets out a number of provisions designed to ensure
          that trade conducted electronically between Australia and the United States
          remains free.   The Chapter also establishes useful precedents for developing
          a liberal trading environment for electronic commerce in the region and globally. 
The Chapter consists of nine articles dealing with the electronic supply
          of services, customs duties, non-discriminatory treatment of digital products,
          authentication and digital certificates, online consumer protection, paperless
          trading and definitions of terms. 
2. Key Provisions
2.1 General
The underlying rationale for the E-commerce Chapter is reflected in the
          text of Article 16.1: 'The Parties recognise the economic growth and opportunity
          that electronic commerce provides, the importance of avoiding barriers to
          its use and development, and the applicability of WTO rules to electronic
          commerce.' 
2.2 Electronic Supply of services
As part of this generalized commitment, both Parties have affirmed in Article
          16.2 that services delivered electronically remain just that - services.   The
          purpose is to emphasise that if a service - such as an architectural consultancy
          or a university degree by coursework - is delivered electronically (such
          as by email, or online), it should not be treated any differently than if
          it was delivered by post or in person. 
2.3 Digital products
The core trade obligations for each of the Parties relate to customs duties
          (Article 16.3) and non-discriminatory treatment (Article 16.4) for digital
          products. 
Digital products are defined (see Article 16.8) as "the digitised form,
          or encoding of, computer programs, text, video, images, sound recordings,
          and other products, regardless of whether they are fixed on a carrier medium
          or transmitted electronically". 
A footnote to this definition clarifies that digital products can be a component
          of a good, be used in the supply of a service, or exist separately.   For
          example, the software embedded in a PC, or the online elements of an online
          educational course, are digital products, but the PC and the educational
          course are not.   Similarly, a digital version of a sound recording,
          whether it is available on a CD or online is a digital product, but the CD
          itself is not. 
2.4 Customs Duties (Article 16.3)
Article 16.3 commits both Parties not to impose customs duties on digital
          products, delivered either online or on carrier medium (such as a CD).   In
          Australia's case, there are no duties levied on carrier medium, so the issue
          of separating customs treatment of carrier medium (such as CDs) from their
          content (the sound recording) does not arise. 
2.5 Non-discriminatory treatment (Article 16.4)
The provisions on non-discriminatory treatment of digital products (Article
          16.4) mean that both countries agree not to distinguish amongst or between "like" digital
          products, regardless of their origin.   In other words, Australia agrees
          that digital products from outside Australia will be treated the same as
          like digital products from Australia.   Likewise, the United States
          will treat digital products from outside the United States - including Australia
          - no differently from like US digital products. 
The commitment means that Australia and the United States may not discriminate
          on the basis that a digital product is created, produced, published, stored,
          transmitted, contracted for, commissioned or first made available outside
          its territory.   This same protection extends to the author, performer,
          producer, developer and distributors of digital products. 
A practical example is that of a digital sound track by a recording artist.   Neither
          Australia nor the United States may treat that sound track differently (such
          as a different tax, or the non-payment of a royalty) on the basis that the
          sound track, or its artist, is not Australian, or not American. 
Importantly, Article 16.4 enables the Parties to implement public policies
          that would otherwise be in breach of the provisions.   Article 16.4.3
          specifically states that the provisions do not apply to "non-conforming
          measures" set out elsewhere in the Agreement. 
Article 16.4.3 clarifies that where there are inconsistencies with the intellectual
          property Chapter, that Chapter shall overrule the e-commerce Chapter, and
          also states further exceptions, such as subsidies and grants, and "services
          supplied in the exercise of governmental authority". 
Article 16.4.3 clarifies that the reservation Australia has taken on audio-visual
          and broadcasting services prevails over the obligation for non-discriminatory
          treatment of digital products.   An example is the local content rules
          in Australia that guarantee a minimum level of Australian programming on
          our digital media.   A further example would be Australian or US grants,
          subsidies or tax offsets for digitised film production. 
2.6 Authentication and digital certificates (Article 16.5)
Paragraph 1 of Article 16.5 obligates both Parties to domestic legislation
          governing electronic transactions that encourages competition, regulates
          industry only to the extent required, and gives parties to electronic transactions
          full standing before the courts. 
Australia and the United States have agreed in paragraph 2 to negotiate
          an agreement whereby central government agencies will recognise the digital
          certificates issued by the other Party.   This will make it much easier,
          for example, for an Australian firm to deal electronically with US government
          agencies in bidding for, or fulfilling, procurement contracts. 
2.7 Online Consumer Protection (Article 16.6)
In Article 16.6, Australia and the United States have recognised that consumers
          who participate in electronic commerce should be afforded transparent and
          effective consumer protection under their respective laws. 
2.8 Paperless Trading (Article 16.7)
In Article 16.7, Australia and the United States have said they will endeavour
          to make publicly available, in electronic form, all trade administration
          documents.   Furthermore, both sides will endeavour to accept the same
          documents transmitted electronically. 
An Australian firm wishing to export to, or import from, the United States
          should soon be able to download and send the appropriate forms to Australian
          or US Customs authorities online, rather than rely on postage, facsimile
          and other services to complete their paperwork. 
2.9 Definitions (Article 16.8)
Article 16.8 defines four key terms in the e-commerce Chapter, namely carrier
          medium, digital products, electronic transmission or transmitted electronically,
          and trade administration documents. 
March 6, 2004
