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(please excuse the large file - I am yet to break this report up into chapter-based pages for ease of access.) Brussels – Strasbourg - LuxembourgEuropean Community Visitors Program Report15 – 28 January 2000
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 | 1. Statement of Purpose for the EUVP |
| 2. Meeting Schedule and contact list |
| 3. Sources of Information |
| 4. ‘A strong e-economy for all in Europe’ by Erkki Liikanen |
EUVP Report – opening remarks
Information technology is changing society and the economy. It is changing our definition of cultural identity and presenting new industrial and trade challenges. In this context, Europe has emerged clearly differentiated from the United States in how the challenges are perceived and dealt with from a political and administrative perspective.
Closing the socio-economic gap in society, more recently described in developed nations as the ‘information haves’ and ‘information have-nots’ have become a political priority in Europe: far more so than in Australia. Therefore an opportunity existed to explore the expression and implementation of this imperative to assist Australian policy development to have a more balanced approach.
Participation in a global information society will be dependent upon relationships established outside national borders. Understanding EU directions in information technology-related policy is important for Australia, particularly as the internet will impact upon many things, including employment opportunities, trade, taxation revenues, cultural expression and identity, democratic participation and human rights.
I chose to focus on information technology for all of the above reasons and found the experience enlightening and challenging. The timing was also quite unique as there were many initiatives in the IT policy area that had recently being launched or were pending. The program content surpassed my expectations and afforded an insight into the structure and organisation of the EU as well as the policy issues and directions.
I would like to sincerely thank the European Union Visitors Program for the opportunity. In particular the officials whose time and efforts made the visit a very efficient, comprehensive and interesting. Their friendliness was also greatly appreciated. It was a privilege to participate in the EUVP Program and heartily recommend the experience to others.
This reports seeks to highlight the policy areas of interest that traverse the agendas of both Australia and the European Union. I have also reflected at times on policy developments in the US, as the ongoing EU – US dialogue is of direct interest to Australia. I hope you find it of interest.
www.katelundy.com.au
Telephone: +61 2 62300411
Facsimile: +61 2 62300413
Post: 11 London Circuit, Civic, ACT 2601, Australia
General observations
The European Parliament initially had only a consultative role (Treaty of Rome 1957), with the power for decision making residing with the Council of the European Union. Since then other treaties have expanded the role of the Parliament. Executive power is now shared between the Commission and the Council of the European Union, (otherwise referred to as the Council of Ministers or for purposes of my report the ‘Council’) and their representatives appear regularly before Parliament.
The European Parliament has 625 members elected for five year terms. The last election was held in June 1999. The Parliament exercises overall political supervision of the way the Union’s policies are conducted, has legislative power and power over the budget.
There is also a President of the Parliament, who is assisted by 14 Vice Presidents. Together they form the ‘Bureau’, which has the responsibility of managing the activities of the European parliament. The members of the Bureau elected every two and a half years.
The Parliament appoints the President and Members of the Commission every five years. There are twenty members and they are drawn from a range of backgrounds, usually having been former Ministers in national parliaments of Member states. The Commission is the largest of the EU institution and have a staff of 16,000.
Currently the structures of the commission are being reviewed by a specially appointed commissioner, Neil Kinnock, following the mass resignation of Commissioners last year amid allegations of cronyism and inefficiencies.
The Council is made up of members appointed by the national Governments of Member States. The Presidency of the Council is rotated between the member states every six months.
There is also the European Council, or ‘Summit’. This is made up of the Heads of State or Government and the president of the Commission and meets biannually. The President of the European Parliament is invited to address the European Council at the opening session.
So far there are three presidents: one for the Commission, one for the Parliament, and one for the Council, with five, 2.5 and 0.5 year terms respectively.
There are four distinct bodies involved in applying democracy in the EU:
| The European Parliament |
| The European Commission |
| The Council of the European Union (Council of Ministers) |
| The European Council (Summit) |
It is not surprising that the structures of the EU are difficult for those who are not directly involved to grasp.
The Treaty of Rome also established the Economic and Social Committee, a consultative committee with 222 members drawn proportionally from member states. Members tend to represent unions, employer associations and interest groups.
The Treaty of the European Union created the Committee of the Regions, also consisting of 222 members, in response to the wish of member states to respect local culture and identity within the EU.
The Commission and Council are required to refer draft legislation to the relevant Committee, and the Committees can also choose to inquire. The product of this process is an ‘Opinion’, and will accompany a proposal through the legislative process to inform decision makers.
The EUVP gave me the opportunity to learn about the structure and operation of the European Union parliament and administration. Below is a list of the European Institutions. I have signalled with a star those institutions that I visited and had the opportunity to meet with officials and/or representatives. Attachment 2 contains a full list and contact details of people with whom I met. I spent time in Brussels, Strasbourg and Luxembourg during my visit, affording me at least a sense of the decentralised structure of the European Community.
e-Europe
An initiative for an Information Society for All
http://europa.eu.int/comm/information_society/eeurope/index_en.htm
The rapid development of information technology has ushered in far more than a new economy. There are structural changes taking place within the financial markets, the services and commodities industries, be it in the public or private sector. The nature and timing of these changes will determine opportunity and how people participate in society in the future.
Economic growth is being driven primarily by the high technology sector, with those who have harnessed the power of the internet taking their place at the top. The recent merger of AOL and Time Warner Inc. is indicative of how the dot.com’s currently reign supreme.
Europe’s recent moves to grasp opportunities presented by the information revolution are perceived as belated both within and outside of Europe. In this context it is ironic that it is an EU Member State, Finland that currently boasts the highest connectivity to the Internet per capita of population in the world. It makes sense that Erkki Liikanen, Finnish EU Commissioner for Enterprise and the Information Society brings a legacy of member state experience of high levels of internet usage to motivate his drive for Europe’s transition to a knowledge society.
On December 8 1999, President Prodi launched an initiative called e-Europe. The Initiative was prepared by the Commission of the European Communities and sets out ten priorities that aim to enable the EU to benefit fully from the changes the internet is bringing to society.
E-Europe has its strongest emphasis on the social implications and opportunities arising from the revolution in information technology. This highlights the contrast between Europe and Australia, with Australia persisting with an economic emphasis. This drier emphasis is epitomised by the title of the main policy body within the Australian Federal Government- the National Office of the Information Economy.
The EU has consistently maintained a primary social perspective and the three key objectives are:
| Bringing every citizen, home and school, every business and administration, into the digital age and online |
| Creating a digitally literate Europe, supported by an entrepreneurial culture ready to finance and develop new ideas |
| Ensuring the whole process is socially inclusive, builds consumer trust and strengthens social cohesion. |
The political message accompanying the initiative is that the changes in technology and the internet are a unique opportunity to be seized. The challenge to manage the changes are identified as representing ‘the central economic and social challenge for the Union."
The e-Europe statement is also very blunt regarding its ambitious aims. It states unequivocally that the objective is to get "every citizen, every school, every company online as soon as possible. It does not however try to define a technological solution of what constitutes being online, rather it leaves open all the possibilities for internet access.
The blunt message of this initiative has been reinforced by a recent speech by Erkki Liikanen, the Commissioner for Enterprise and Information Society (see Attachment 4). In this speech, Liikanen puts on the record the obvious:
"All figures show that e-commerce in Europe continues to lag behind the USA, despite the recent increase in interest and current rapid growth."
Such an admission in the context of ongoing US/EU dialogue can only really be presented, I would argue, in the midst of an ambitious and credible plan to rectify the deficiency.
It seems that what I call ‘Greenspan imprimatur’ has impacted upon economic commentators and hence decision makers in the EU as much as it has here in Australia. Alan Greenspan, Chairman of the US Federal Reserve summed it up in a speech in January 2000 that very publicly shed any residual professional doubt of centrality of the internet as both enabler and facilitator of economic growth, when he said:
‘How well policy can be fashioned to allow the private sector to maximise the benefits of innovations that we currently enjoy, and to contain the imbalances they create, will shape economic configuration of the first part of the new century.’
Liikanen seeks credibility in his assertions by placing the economic transition brought about by the internet in an historical context that is familiar to the citizens of the EU:
This approach gives strength and sustenance to the position taken not by the Prime Minister, but rather the Leader of the Opposition, Kim Beazley. Upon recognising the depth of the transformation of society and within it the economy, Beazley has consistently articulated the vision required for Australia’s chances, not just for survival, but for future prosperity, in his advocacy of the need for Australia to become a ‘knowledge nation’.
Europe’s path is destined to be far from smooth if the rhetoric emanating from dry economists offers any indication. Recent commentary published in the US monthly, Business Week observed:
"For Europe’s ‘New Economy’ to get going, though, the bigger countries need to get into the act. France and Germany are still beset y sky-high labour costs, even while many still want government solutions to joblessness that hurt the market."
Regardless of it’s source, or perhaps because of it, this statement more than any other acknowledges the preparedness of the EU member states to ensure that it is the economy that serves society, rather than vice versa. The great distinction between Europe and the US is that Europeans generally place people highest in public policy priorities.
Given this distinction between the EU and the US, Australia is in an advantageous position to draw strength from the strong social policy stance taken in the EU, whilst remaining attuned to economic and market developments in the US. While Europe may be playing catch-up on the economic benefits of commercialising innovation, the US is playing catch up on critical questions of social concern including privacy, consumer protection and censorship.
Whilst I have not devoted specific chapters in this report to these issues as yet, they continue to be two of the most politically sensitive issues with respect to the information society and the internet.
Growth initiatives
Innovation, Capital and Collaboration
The EU has recognised the relationship between internet capabilities of communities and business and economic growth. In a backdrop of interesting statistics, like for every 100 people, Europe has just 18 PCs against the USA's 47. Data indicates the gap is still widening. The USA now invests more than 4.5% of its gross domestic product in IT, while Europe spends less than 2.5%. In real money terms the USA is spending more than euro 1000 on IT per head of population, while Europe spends less than 500. These facts give an indication of the political justification for specific action to improve Europe’s position.
Whereas the e-Europe initiative addressed the broader challenges, specific policy measures are required to stimulate growth arising from commercialising ideas. At each juncture in the capital ‘food chain’ an assessment of the public policy requirements needs to be made. Share options taxation treatment has been specifically identified as an area requiring urgent reform.
European Community Research and Development
The E-Europe initiative specifically sought to focus and build on Europe’s position in the ‘new economy’, a US inspired buzz-word for the changing nature of the global economy facilitated by massive progression in digital information technologies.
It is clear by the depth of investment in research and development that the EU has an appreciation of the relationship between research and economic growth. The EU has a funded program for research. It is the [European] Community Research and Development Program and the latest program for it’s implementation is the generally described as the ‘Fifth Framework Program’, which is a reference to fifth term of the European Parliament. Full details of the Fifth Framework Program can be found at CORDIS: The Community R&D Information Service
The Fifth Framework Program (FP5) defines the European Union's strategic priorities for Research and Technological Development (RTD) and Demonstration activities for the period 1998-2002. It was preceded, logically, by the Fourth Framework Program, which has many continuing projects
FP5 was been conceived to help solve problems and to respond to major socio-economic challenges such as increasing Europe's industrial competitiveness, job creation and improving the quality of life for European citizens. Emphasis is placed throughout on the process of innovation to ensure the output of EU research is translated into tangible benefits for all.
FP5 comprises four Thematic Programs covering a series of well-defined problems and three Horizontal Programs responding to common needs across all research areas. A total budget of 14.96 billion euro has been allocated to implement the Fifth Framework Program. There are four thematic programs and they are:
Quality of Life and Management of Living Resources
Promoting a User-Friendly Information Society (IST)
Competitive and Sustainable Growth
Energy, Environment and Sustainable Development
The Information Society Technologies (IST) Program was endorsed back in December 1998, after the need for ‘user-friendly information society’ was identified as a key action under the Fifth Framework Program.
It is also worth noting that the EU established a European Regional Development Fund (ERDF) and the European Investment Bank (EIB) to finance a number of telecommunications projects in EU regions.
The Information Society Technologies (IST) Program has a budget of 3.6 billion euro (1999-2002) and provides the European Union with an integrated program reflecting the convergence of information processing, communication and media technologies.
Risk Capital
Linking ideas with early stage capital and having the capability of commercialising is the same specific challenge facing Australia. However, like in Australia, it has certainly become clear that there is far more to the innovation cycle than just capital and ideas. Intangible elements of the innovation cycle, including corporate and education culture, risk-taking attitude and professional relationships are also essential. The EU has recognised the importance of fostering entrepreneurialism by articulating one it as the second of the three key objectives of the e-Europe initiative: creating a digitally literate Europe, supported by an entrepreneurial culture ready to finance and develop new ideas.
Out of the ten Action Plans, the sixth identified action in the e-Europe initiative is Risk Capital for High-tech SME’s. Like Australia, The EU recognises the need to reduce barriers to investment in innovation. In addition to specific Action Plans in the area of E-commerce and Financial Services, the Risk Capital Action Plan specifies a series of targets improve access to risk capital.
These targets included a major policy review that aims to improve the coherence of the current plethora of supportive instruments and programs. In addition to the Fifth Framework Research Program (in particular IST), the European Investment Bank, regional and social funds and the growth/employment initiative will all be included in this review. It is anticipated that this review will contribute to the Special European Summit in Lisbon. This was supposed to be finished by March, 2000.
By the end of 2000, the Commission has set itself the target of being in a position to propose innovative forms of capital raising. The e-Europe initiative specifically identifies mentoring, business angels and incubators as being examples of how the European Community can refocus spending through public/private initiatives. It is reasonable to interpret this as active consideration of the joint public/private investment fund, modelled on the original Israeli YOSMA fund, established in 1992, the Australian interpretation being the Innovation Investment Fund (IIF), which licenses investment fund to manage funds with a significant public component.
There are also two specified longer-term targets. These are that by the end of 2003, the remaining obstacles to the creation of a fully integrated pan-European risk capital market should be removed and the level of early stage finance in the EU should have at least tripled. This last point is already considered conservative, hence the caveat of ‘at least’. Recent changes in the taxation structures in Australia have resulted in a phenomenal growth in the interest of investors and capital is no longer considered as being in short supply, rather the hindrances are in other quarters, such the more intangible elements of the capital food chain as mentioned above.
Australia is arguably slightly ahead of the EU in developing an understanding of the interface between ideas and capital and has sought to address deficiencies through a series of policy initiatives like BITS (Building on Information Technology Strengths), COMETS (Commercialising Emerging Technologies) and the IIF.
However, the fundamental weakness in the Australian Federal Government’s program is that these programs are surface level and the structural weaknesses in public education expenditure and support for R&D remain.
The approach of the current Federal Government is also weakened by the fact that the programs they do have are split between two major departments. While the EU is specifically looking to improve the cohesiveness of the support structures and strategies, the Federal Government has allowed the Department of Industry, Science and Resources (DISR) to be stripped of strategic relevance as far as information technology initiatives are concerned. With EMDG, (Export Markets Development Grants), COMET (Commercialising Emerging Technologies) and IIF still in DISR, almost all other programs exclusively targeting IT exist within DoCITA )the Department of Communication, Information Technology and the Arts). This includes the unit charged with overall IT policy, the National Office of the Information Economy: NOIE, as well as the Ministerial Advisory Committee on the Information Economy: IEAC, the industry development aspects of the IT outsourcing and the BITS program which includes an incubator grants program.
By way of example, the under-utilisation of the opportunity presented by the EU-Australian Collaboration on Science and Technology demonstrates how far the current political leadership is from understanding the relative importance the intangible elements of the innovation cycle, including corporate and education culture, risk-taking attitude and professional relationships.
European Investment Bank
The European Investment Bank (EIB) provides long term loans for capital required for promotion of the EU’s balanced economic development and integration. Loans must fill at least one of a series of specified objectives.
These objectives are:
| Strengthening economic progress in less favoured regions; |
| Improving trans-European networks in transport, telecommunications and energy transfer; |
| Enhancing industries international competitiveness and its integration at a European level and supporting small to medium enterprises; |
| Protecting the environment and quality of life, promoting urban development and safeguarding the EU’s architectural heritage; |
| Achieving secure energy supplies; |
| Extending and modernising infrastructure in health and education sectors as well as assisting urban renewal. |
The lightest possible interest rates are applied to EIB loans, with the resources primarily obtained from capital markets where the EIB has a AAA credit rating allows it to borrow on the best terms. The banks lending often goes hand in hand with grants from the EU’s structural fund and and Cohesion Fund. Ensuring the loans are complementary brings the EIB into a close relationship with the Commission.
20 billion euro private venture capital is estimated to have been invested in the EU, with 5 billion euro invested into over 400 internet start-ups alone. This represents a dramatic increase and has fuelled commentary of rising interest in Europe as a place for investments.
It will be very interesting to see the role of the EIB develop in the context of venture capital raising and the need for risk capital. The close relationship with the Commission means that the EIB s well placed to facilitate policy objectives of smoothing the path for ideas to become businesses. With one of the EIB’s objectives already being ‘supporting small to medium enterprises’, the ground work has been done that will ensure it plays an interesting role in the maturing of early stage capital markets in Europe.
EU-Australian Collaboration on Science and Technology
On the 25 July 1994, the EU and Australia began to implement a treaty-level Agreement on science and technology. The agreement was designed to facilitate co-operation in research and development in areas of endeavour that were common to both parties.
The Agreement covers six areas of collaborative research, including
| Biotechnology |
| Communication technologies |
| Environment and climate |
| Information technologies |
| Marine science and technologies |
| Medicine and health |
The Joint Science and Technology Committee (JSTCC) was established under this agreement to progress the initiative. The fifth meeting of this committee will be held in Brussels in 2000. The scope of the agreement has been extended into all the thematic programs under the European RTD Framework Programs. Whilst all of the areas of research are of critical importance, the Information Society Technologies (IST) research currently being conducted in the EU is both timely and strategic.
Few in Australia realise that this Information Society Technologies Program has a budget of 3.6 billion EUROs (1999-2002). That’s funding a lot of strategically important research.
Australia is incapable of resourcing research to this relative depth and hence is in a position to be the major beneficiary of the relationships possible within the scope of the Agreement.
Projects to date, listed below, indicate that the provisions of this Agreement are extremely under-utilised. This indicates a level of political ignorance displayed by the Federal Government with respect to the strategic opportunities presented to Australia. As information technologies continue to facilitate economic and societal restructuring, Australia needs to strive to be abreast of the myriad of public policy challenges. Participation and access to research for purposes beyond that of enhancing commercial opportunities is essential. The research currently being carried out within IST has immediate and ongoing relevance and application to Australia. Given the relatively low expenditure in the public and private sector research in Australia, there are many reasons why this Agreement should be attract far more attention from all level, Government, Business and Institutions.
There are thirty-seven collaborative projects under way, with only nine in the IST area. Euro-Australian Cooperation Centres have been established both in Australia and the EU ( Seregno, Italy) in 1999 and 1997, respectively. The Australian arm has offices in both Sydney and Melbourne. A major role of this Centre is to act as an advisory agent for businesses or institutions pursuing bilateral relationships (between the EU region, and Australia)
The presentations at the most recent workshop focussed on projects in the IST area. These presentations, which cover existing initiatives and future opportunities for collaboration, give an insight as to the opportunities that are being explored.
| Rely Food Project: Remote life cycle support for industry machinery. (pilot project) |
| IntraWool, e-commerce from farm to yarn (including new solutions for the logistics of the commodity wool) |
| Euro-Australian Cooperation Centre (for Continuous Improvement for global Innovation Management: CIMA, facilitating cooperation and knowledge transfer) |
| Euro Australia Co-operation Centre- Australian Operation, fostering bilateral interactions. www.aetnet.it/eacc |
| International Cooperation in Computer Science: the NeuroCOLT Working Group (neural and computational learning) www.neurocolt.com |
| Australia: An Innovative Research and Business Partner in the pacific Region (presenting Australia as a strategic R&D partner) |
| Collaborative R&D Opportunities with Australian Health Information Technology Organisations |
| The E health Revolution in Personal Health Management (full paper www.micromed.com.au) |
| Opportunities for Collaborations in Third Generation (3G) Mobile Networks (WAP) – Australian Telecommunications Cooperative Research Centre. |
| Datacraft Technologies, specialists in ‘last mile’ communications solutions |
| Experiences from Redcentre’s work with SME’s in Innovation Networks in Australia: facilitating start-ups. |
As Frank Cunningham summed up in a recent report, "the European Union is Australia’s largest trading partner and Australia is the third most important region for EU foreign investment. It is in the interests of both sides to continue to expand research and business partnering efforts."
The very clear message I received regarding this Science and Technology Agreement was that it was under-utilised and there were significant opportunities of mutual advantage to be pursued.
Australia’s growth in knowledge investment as a percentage of GDP is below the OECD average. In addition, Australia ranks a mere fourteenth among OECD countries with respect to our share of information and communication technology manufacturing. In this environment, Australia must strive to take full advantage of opportunities to build collaborative research relationships with the European Union, particularly in the Information Society technology area.
Bandwidth
Convergence and telecommunications policy
Telecommunications
On 10 November 1999 the Commission adopted a package of four Communications (messages to Parliament from the European Commission) to launch a review of the current regulatory framework for electronic communications. This process is seen as necessary to build on momentum gathered to date for improving Europe's competitive position in the Information Society. The EU is responding to rapid technological changes occurring globally, but particularly in the US. Europe sees a need to adapt its telecommunications regulatory framework. The Communications were titled:
| Communication on a New Framework for Electronic Communications Infrastructure and Associated Services - The 1999 Communications Review |
| The Fifth Report on the Implementation of the Current Framework |
| Report on Digital Television in the EU |
| Communication on Next Steps in Radio Spectrum Policy |
These are all down loadable from: http://europa.eu.int/comm/information_society/policy/telecom/index_en.htm
On the 1 January 1998, the EU telecommunications market was opened up to full competition. Progress on deregulation is being monitored by the EU Commission, with member states implementing the regulatory framework required to facilitate the transition.
Following on from the 1999 Communications Review the European Commission is expected to pursue legislative changes to further deregulate telecommunications markets, with a particular emphasis on local loop unbundling and interconnection, giving consumers more choice and arriving at lower prices for high-speed Internet access.
Europe is seen generally as lagging behind in telecommunications liberalisation, a process dictated by the World trade Organisation. It is interesting to note that whilst the telecommunications liberalisation agenda mandated by the WTO was ostensibly about increasing competition (leading to enhanced consumer benefits), digital convergence has prompted corporate positioning designed to secure either vertical or horizontal spaces in the market. These new, global alliances tend to diminish, rather than enhance opportunities for competition.
To this end, the EU submitted to the ongoing WTO work program on electronic commerce the view that: internet access and network services are telecommunications services, and that the obligations of the GATS telecommunications annex on ‘access to and use of’ public telecommunications networks and services apply to internet access and internet network services.
The European Parliament sees its role as one of finding the balance between the liberalisation required to enable the market to develop and the regulation needed to protect consumers. There is still a strong political commitment to the needs of consumers that seems to be rarely completely overwhelmed by corporate interests. The current environment presents a particular challenge with economic growth being linked to the information and communications sector in particular. A parliament is having to concern itself with the issues of where the opportunities for future economic growth lie as economic regions gear up to improve strategic advantage in the ICT area.
There is continuing debate about regulatory standards in the telecommunications arena, with the adoption of standards effectively being a key determinant of access to markets. US telecommunications giants have long struggled with a presence in Europe and access to market tends to be through an alliance with a European incumbent. Coupled with the strength and penetration of the mobile market in Europe, these alliances are looking all the more critical for the telcos’ seeking a seriously global structure.
Mobile telephony is driving the political and corporate interest at the moment, although the market is certainly big and fragmented enough for a multitude of other technologies. Third generation mobile telephony has been identified as the ‘edge’ that Europe has over the US in the race (with the EU starting from way behind) for market share of a given technology.
Wireless access and Wireless Application Protocol (WAP) content (for example, internet content styled specifically for use of a mobile phone device, which have smaller screens) is seen as an immediate strength in Europe as the market develops. Examples of the mobile take up rate are illustrated by these statistics: 65% of Finnish adults have cell phones and 80% of residents in Swedish city Stockholm, have internet access. These connectivity figures are difficult to beat and with the trend growth of cell phone usage particularly, rising rapidly it is not surprising that the level of investment in cell-phone based internet content and newtworking is increasing significanlty.
International Bandwidth
The issue of international bandwidth tariffs has turned into a US v the rest of the world debate. The issue is how come the US don’t have to pay half the bandwidth costs for digital content emanating from the US? The answer is ‘who can make them’ at this point in time. At the behest of Telstra, Australia has entered the debate. The EU are looking in the direction of the WTO, on the basis that such an inequitable arrangement presents a trade barrier for internet content, or indeed digital intangible products and services. The fact that the US provides over 80% of internet content means that corporations like Telstra are claiming they are incurring additional costs of $150 million per annum. Telstra are claiming this is affecting their competitiveness.
This issue has global implications and the EU is pursuing it with interest.
E-commerce
The Directive, the regulations and a word about Tax.
http://europa.eu.int/comm/dg15/en/media/eleccomm/99-952.htm
Erkki Liikanen
The Electronic Commerce Directive has passed the equivalent to the first reading stage of the parliamentary process. This directive is a significant achievement and will facilitate the European Union in not only participating in the information economy from a global perspective, but in pursuant to the principles of removing barriers to the internal market.
The Directive tackled successfully critical areas of legal jurisdiction relating to operation of companies participating in e-commerce. This includes traditional businesses moving into an electronic environment as well as internet-based businesses (dot.coms). A major difficulty with respect to electronic commerce related to identifying what laws would be applicable to the business. For example, a business may offer services throughout the EU, have servers located in one member state and have physical presence in yet another. The challenge was to determine the jurisdiction within which the laws would be applied. The primary options were place of production of the service and place of consumption of the service. The Directive identifies the place of physical locality as being the jurisdiction that will determine what laws apply. For example, a business with a registered address in France, with servers operating in the UK and Italy and services being operated throughout the EU, would operate under the corporate laws of the member state of France.
However, one area where the status quo has been left in place is in relation to consumer’s ability litigate against a business providing an electronic service. The difficulty is that if a business is operating under the laws in the member state of production, and offering a service in another, then theoretically a consumer in their place of consumption, could only sue under the laws of the place of production. This presents a disadvantage to the consumer who may be only familiar with the laws of their own member state. This ambiguous situation is made more complex by the Rome Treaty, which places the rights of the consumers above any default application of other Directives. As a result this Directive does not seek to alter this position, so it could be assumed that in the case of litigation, the case would be heard in the jurisdiction of the complainant, as opposed to the defendant, which is otherwise the case with corporate litigation. This presents an as yet unresolved dilemma, as the defendant is not required to respect the regulatory framework in the jurisdiction in which the content is accessed, only that in which it is produced.
A feature of the Directive as it is currently framed is the number and nature of ‘derogations’. These derogations are exemptions to the Directive. There are a number of derogations that have been put in place to ensure that the Directive does not conflict with pre-existing laws, particularly those relating to consumer rights. The EU has a complex history as far as consumer law is concerned, governed by the Rome Treaty. Other derogations allow the retention of member state laws that relate to protection of minors, human rights and security matters.
Amongst these derogations is one specifically removing the ability of unsolicited email to be sent unless it is specifically identified as commercial in content. Another involves the encouragement of industry to respect the concept of the ‘Robinson List’. This list is effectively a generic opt-out list for holders of email account who do not wish to receive commercial email. Such a list operates in the UK and it is envisaged that the concept will gather support in industry and managed through a Code of Conduct.
The Directive is seen as a remarkable achievement, given the diverse interests involved and the general complexity of electronic commerce issues. The number of derogations (exemptions) while able to be interpreted as quite broad, do not prevent the main aim of the directive, which is to facilitate the growth and implementation of e-commerce. It was commented to me that the number of derogations in this particular directive is a litmus test as to the level of cohesiveness amongst member states of the European Union. This Directive is seen as having many derogations, but at the same time presented some extremely difficult challenges, with all parties having the will ultimately to arrive at a negotiated outcome.
The Directive also creates an environment through which contracts can be concluded via electronic means. The same can be said for dispute resolution procedures that previously required some physical presence to formally record resolution. This built on the Electronic signatures Directive previously adopted.
Electronic Signatures
On November 30, the Council Telecommunication Ministers adopted an EU-wide legal framework on electronic signatures. This was seen as an important step in allowing authentication of electronic data, a critical building block for e-commerce. IN typical style, the directive does not try to cover all contingencies, but guides member states in their endeavours to come up with an EU-wide solution. The following summary of the main elements are as described in the public statement following the Minister’s meeting.
| Legal recognition: the Directive stipulates that an electronic signature cannot be legally discriminated against solely on the grounds that it is in electronic form. If a certificate and the service provider as well as the signature product used meet a set of specific requirements, there will be an automatic assumption that any resulting electronic signatures are as legally valid as a hand-written signature. Moreover, they can be used as evidence in legal proceedings. |
| Free circulation: all products and services related to electronic signatures can circulate freely and are only subject to the legislation and control by the country of origin. Member States cannot make the provision of services related to electronic signatures subject to mandatory licensing. |
| Liability: the legislation establishes minimum liability rules for service providers who would, in particular, be liable for the validity of a certificate's content. This approach ensures the free movement of certificates and certification services within the Internal Market, builds consumer trust and stimulates operators to develop secure systems and signatures without restrictive and inflexible regulation. |
| A technology-neutral framework: given the pace of technological innovation the legislation provides for legal recognition of electronic signatures irrespective of the technology used (e.g. digital signatures using asymmetric cryptography or biometrics.) |
| Scope: the legislation covers the supply of certificates to the public aimed at identifying the sender of an electronic message. In accordance with the principles of party autonomy and contractual freedom it does, however , permit the operation of schemes governed by private law agreements such as corporate Intranets or banking systems, where a relation of trust already exists and there is no obvious need for regulation. |
| International dimension: so as to promote a global market in electronic commerce the legislation includes mechanisms for co-operation with third countries on the basis of mutual recognition of certificates and on bilateral and multilateral agreements. |
Taxation and Electronic Commerce
This vexing question is starting to attract the attention it deserves. The Electronic Commerce Directive established principles of the Establishment, Supervision and Transparency for the digital marketing and exchange of goods and services, and in process have addressed a fundamental issue. This issue is one of identifying the jurisdiction as far as the application of corporations laws to businesses operating in member states as being the place of physical locality. (similar to Australia’s GST) to services and products sold and distributed via electronic commerce.
The issue of VAT treatment in an electronic environment is yet to be resolved.
As mentioned above, the Directive identifies the ‘place of production’ as the jurisdiction in which member state laws are applied to the business engaging in electronic commerce. However, if this principle were to be adopted as far as defining the place of ‘permanent establishment’ for tax purposes, ie: the imposition of a VAT, the tax would be levied and applied in the place of production.
Electronic commerce enables markets to be accessed without having established a ‘permanent establishment. This has significant taxation implications for all jurisdictions.
A server (i.e., a computer facilitating the transaction) used by a foreign business to transact this type of business can be located anywhere. Previously, foreign businesses were required to establish an office in the host country. Hence, with electronic commerce facilitating the market place, the necessity of establishing ‘permanent residence’ is vastly diminished.
To this end, on the Commission announced a Review of the internal Market in November 1999. This
strategy includes specific target actions which will take into account the actual functioning of product and capital markets. The third and highly relevant aspect of this strategy is as follows:Improving the Business environment
Removing the barriers to the free movement of goods, services, capital and persons will only produce the expected effects the overall business environment is favourable. This calls for effective action to eliminate anti-competitive practices and unfair tax competition and reinforced efforts to reduce the overall regulatory burden.
The Commission will inter alia:
| propose measures to modernise the system of excise duty and current VAT legislation |
| adopt block exemption regulations on state aid for SMEs and training aid |
| continue to press for full and effective implementation by all Member States of Internal Market Directives |
| develop a comprehensive approach to cooperation between Member States in the enforcement of Internal Market rules |
| bring forward proposals to modernise and streamline public procurement legislation. |
In addition, Commissioner Liikanen’s recent speech indicated that this issue was high on the agenda and that he recognised an international solution was required.
"Particularly challenging remain certain issues including taxation and especially indirect taxation such as VAT as well as the jurisdiction and applicable law questions. Regarding taxation, progress has been made in the OECD context but certain problems remain. Jurisdiction and applicable law issues are yet to be finally resolved. The Commission has recently held an open hearing to listen to the views of the stakeholders. The outcome emphasised the need of a balanced solution. It also made clear that further work on online alternative dispute resolution mechanisms provides a way forward."
The issue this highlights for Australia is that VAT’s (or GST’s) add layers of complexity to an already complex and taxation environment. With the phenomenal increase in electronic commerce in Australia and around the world, the implications are threefold. First of all there is the issue of general revenue loss. This was explored in some depth in Australia in 1997 by the Australian Tax Office in ‘The Internet Reoport’.
The second is the uncompetitive position such taxes leave respective jurisdictions like Australia and the EU in a global economy. The EU recognise that this issue has serious implications, and they need to get their own house in order, hence the Internal Market strategy. The focus on the dialogue with the US regarding such issues is adding impetus to their considerations, remembering that the US does not have a cascading VAT.
The third issue is that despite having asked the specific question of the Minister, the Australian Government has failed to address the implications of the GST in this e-commerce enabled, global economy. More specifically, there have been no measures taken to protect the competitiveness of domestic suppliers, specifically of digital intangible products. Such products include software, digital services and products, indeed anything that can be digitally transferred across the internet is particularly vulnerable.
The upshot for businesses producing digital intangibles in Australia is that they will be at a market disadvantage, as every other jurisdiction does what Australia does, and exempts exports from the GST. Why download an Australian product with a 10% hike on it when you can download something GST free? It also raises the question of the jurisdiction, and potential incentive for suppliers of such digital products and services to find a convenient jurisdiction with advantageous taxation conditions, and place their server there.
Any jurisdiction that provides business without having to apply a VAT or GST has a market advantage, causing consumers to favour foreign suppliers of domestic ones. In this regard, the EU has indicated that consumption tax rules should be trade neutral and should not discriminate between foreign and domestic suppliers.
The reference to the OECD by Liikanen is an indication that the EU recognise that such issues can not be resolved in any one market. However, for all of the work done by the OECD, the best path forward identified so far is that the revenue issues can only be addressed through a series of bilateral or perhaps multilateral taxation agreements.
In the US, the taxation moratorium on internet taxes ends in October. The commission inquiry that is proceeding is investigating the application of the state based retail tax structure as part of its considerations. In some ways there are similar challenges as those facing the EU in resolving internal market taxation jursidictional issues.
The challenge for Australia is that with the forthcoming GST, imported goods and services will also attract a GST, putting in place a ‘place of consumption’ regime.
Any jurisdiction that provides business without having to apply a VAT or GST has a market advantage, causing consumers to favour foreign suppliers of domestic ones. Australia is yet to come to terms with this issue. Hence the US position seems to be supportive of the OECD position to date in that this issue is best resolved through negotiated bilateral and multilateral taxation agreements.
Whilst we don’t apply a GST to the products we export, the implications of this are currently being actively contemplated in other markets. Following the Ottowa OECD Ministerial on E-commerce, at which Australia had not ministerial representative, I observed:
"The Ottawa ministerial forum traversed many issues, not least being the impact and effect of electronic commerce on a nation's ability to tax consumption. The report Electronic Commerce: Taxation Framework Conditions identifies four elements of an electronic commerce taxation framework specifically relating to consumption tax. Firstly, rules for the consumption taxation of cross-border trade should result in the jurisdiction where consumption takes place and an international consensus should be sought on the circumstances under which supplies are held to be consumed in a jurisdiction. Secondly, for the purposes of consumption taxes, the supply of digitised products should not be treated as a supply of goods.
Thirdly, where business and other organisations within a country acquire services and intangible property from suppliers outside the country, countries should examine the use of reverse charge, self-assessment or other equivalent mechanisms where this would give immediate protection of their revenue base and of the competitiveness of domestic suppliers. Fourthly, countries should ensure that appropriate systems are developed in cooperation with the WCO and in consultations with carriers and other interested parties to collect tax on the importation of physical goods and that such systems do not impede revenue collection and the efficient delivery of products to consumers."
The point must be made that those economies that are net exporters of digital intangible product and services are the ones advantaged by bi/multilateral lateral agreements.
The opinion of the EU Committee of the American chamber of commerce, was published on February 1 2000. Its members include 140 of the largest US multinationals.
It claims to be the key organisation in Europe representing the views of US multinational companies. Its members typically are present in most Member States of the European Union. US multinationals are just waking up to the strategic importance of the European market, seemingly as much motivated by the US political agenda relating to EU/US trade dialogue as participating in a competitive market place.
I expect the US presence and participation in the EU to grow, however, less in the public debate and more in the role of establishing positions of key influence and networks within the Commission and the Parliamentary institutions.
This excerpt highlights the US attitude and the emphasis of proportionality, as the US remains and likely to remain by far the most prolific exporter of digital content.
Compliance models that seek to enforce tax collection obligations on non-E.U. operators may create significant challenges for tax authorities. We would strongly encourage tax authorities to take account of the principle of proportionality in developing compliance models that will have effects outside their home jurisdiction.
It is important to design rules that foreign and domestic business can understand and administer. The incidence of non-compliance, particularly for foreign businesses, increases significantly as rules become unreasonably complex and burdensome to administer. In keeping with the spirit of electronic commerce, tax authorities should utilize technological advances (e.g., electronic invoicing) to reduce the compliance costs associated with VAT. Business input could be of considerable assistance in this area.
PLACE OF TAXATION
The EU Committee agrees that business-to-consumer on-line transactions should, in principle, be subject to VAT taxed at the ‘place of consumption’, at least until and unless the EU moves the VAT system to a full country of origin approach (at which point the e-commerce implications might have to be revisited). For purposes of clarity, certainty and to avoid double taxation, the ‘place of consumption’ should be uniformly determined, preferably on a worldwide basis, but at a minimum within the European Union, as ‘the place where the customer has its normal residence’. Residence must then, in turn, be defined by means of a formal Directive, in order to avoid different interpretations by the Member States.
In summary, an on-line supply by a non-EU supplier to a customer with normal residence in the EU should be subject to VAT in the EU. An on-line supply by an EU supplier to a customer with normal residence outside the EU should not be subject to EU VAT. However, an on-line supply by an EU supplier to a customer with normal residence within the EU would be subject to VAT in the Member State where the supplier is established.
REGISTRATION AND PAYMENT OF VAT
As a matter of principle, the EU Committee does not believe that the EU should enforce VAT compliance on non-EU suppliers without the agreement of the jurisdictions where those suppliers are located. As a result, any VAT compliance model must be developed in co-operation with non-EU governments and vendors. It might even prove worthwhile, if not necessary, to seek a multilateral agreement setting out a reasonable compliance system which would encourage voluntary participation
In other words, the opinion being expressed here favours definitively the producers of digital (electronic) content and services supplied from countries that do not have a VAT applying to exports. If the view expressed here were to prevail, the EU would find itself in the same position of that Australia is currently facing. Imported digital content and services would have a market advantage because they would not attract a VAT, whereas EU produced digital content and service would.
The only options offered reflect those canvassed specifically in the OECD’s Taxation Framework Conditions Discussion Paper: multilateral taxation agreements with proportionality principles. The fact that the US currently supplies over 80% on internet content should serve as reason enough to understand that discussions regarding taxation framework conditions are directly related to trade in the digital world.
The WTO also has a working group on E-commerce. After the collapse of Seattle, the moratorium on e-commerce issue will continue by default.
GATS and digital intangible products
The Uruguay round did not anticipate e-commerce, so as a result the WTO put a moratorium in place until the Seattle round, where the issue would be discussed and hopefully, a number of critical areas of principle would be resolved.
One such area was determining whether new rules were needed for electronic commerce or whether old ones could be applied in a new environment (the internet).
A declaration was prepared and Seattle determined the latter, ie. that GATS applied to services delivered electronically. This was a significant result. However, with the subsequent collapse of the round, the situation is ambiguous. There was no formal determination that the moratorium would continue and any resolution was nullified when the round collapsed. The resulting situation is very unclear. It is presumed the moratorium will continue.
However, even within in the declaration the definitions of what was considered as a digital intangible product or service was not concluded. The declaration indicated this direction however: that if an e-commerce purchase resulted in a physical delivery, there would be not new rules and the product would remained defined as such under GATT.
To this end the EU position for the WTO Work Programme on E-Commerce included:
| goods delivered physically, - while ordered electronically, which fall within the scope of the GATT |
| electronic deliveries, which consist of services and therefore fall within the scope of the GATS. |
Note: There are five additional points in this document
Here are some examples of the of products experiencing this metamorphosis from being currently physical (tangible) and are becoming digital (intangible):
| Books (published v down-load) |
| CDs (pre-packaged v MP-3) |
| Software (shrink-wrapped v download) |
| News (magazines v e-zines) |
| Videos (Movies, documentaries, educational product) |
| Health services (eg Web MD) |
It may be that these products attract an interim definition under GATS whilst keeping their place under GATT as far as the physical product is concerned. Already issues such as intellectual property law and copyright are tangled up in this debate. This is an indication of how closely related IP management and technological standards are to trade and access to markets implications.
All non US participants in the GATS /GATT are potentially at a disadvantage again because of the imbalance in the production of digital services. It is in the EU’s interests, and indeed Australia’s that issues of equitable market access of digital product are specifically addressed within the forum of the WTO. Experience to date shows the depth to which standards and regulations implemented at a national level impact directly on access to markets and trade. The US learnt the lesson the hard way with their policy banning the export of encryption beyond a certain level.
Identity, culture and Content
Creating a truly global internet for the Information Society
Whether it is Thomas Friedman’s "The Lexus and the Olive Tree," or Jerry Everard’s "Virtual States", people around the world are trying to get a grip on the nature of globalisation. How and why it is affecting an individual, community, region or nation state are questions that need to be answered by political leaders. And after the analysis and interpretation, some ideas and policies that will best serve the interests of the public, including creating sustainable, natural environment.
The European Unions expansion plans draw into the spotlight the paradox presented by localisation and globalisation. Localisation is the preserving of culture, on relationships with the physical environment and regional economy. Of course it also includes the presence of religion, culture and community self esteem.
The latter, globalisation on the other hand is the removal of barriers, be they trade, economic, cultural or religious. The different ways in which globalsiation is being interpreted by different communities relates directly to how they feel about cultural identity.
The EU is in the midst of a mini-globalisation process, except the ‘globe’ is the EU, and the ‘nation states’ are the member states. Thise seeking to interpret the path that globalsiation will tke would be wise to look at the EU’s internal responses to the process of become a unified economic force. Why? Because the EU is learning the hard way that such integration will not be tolerated at the expence of culture and regional identity. It will be the EU’s great strength if indded they are able to find the balnce between not merely retention of culture identity in a n integrated Europe, but a new welcoming of such differences as being the glue that holds the Union together.
In many ways the establishment of the Committee of the Regions was the political response to fear of losing regional identity and culture, not to mention capacity to participate economically. It caused me to cotemplate what the global equivalent would be? Is it already the UN?
Freidmans’. ‘lexus’ is globalisation and his ‘olive tree’ is cultural identity. He traverses the relationships between what he describes as competing forces and tells stories to illustrate and give substance to his analysis. The role of the markets, he asserts, is central and to understand what we are experiencing the post-cold war organisation requires a full and complete understanding of the global economy.
However, he is force to continually concede that there are a number instances where the conduct of a given nation state prefers to make political decisions in favour of culture identity and the national self esteem. This is sometimes in the full knowledge of the economic consequences and sometimes in ignorance. Either way, it is the prevailing of Freidman’s ‘olive tree’ over his ‘lexus’.
However, it is cultural identity and the way it is preserved, engaged and created in a community, region, nation state or indeed within cross-cultural communities of common interests within all these groups that is the subject of this chapter. How closely related to the expression of culture is our future political direction, indeed stability? I believe that they are directly related and the new tension points in a freshly organised, globalised economy, it will be a period of cultural assertion that develops as a socio-political response the deprivations felt by individuals as economic identity disappears.
The products of culture that promulgate what is popular will be the determining factor of who is more powerful in the 21st century. It will be those who distribute the messages to which people will empathise and feel comfortable with will serve a leaders and guide public opinion. It will those who produce and distribute cultural content that hold the keys to subtle balances of power in the future, and it will be the nation states that recognise this and offer their citizens a sense of identity and culture through creative and community expression that offer the best hopes of a cohesive society capable of embracing critical political priorities such as social equity and environmental sustainability.
This realisation was reinforced in my reading of a novel by Neal Stephenson, titled ‘Snow Crash’. This story, characterised as mere ‘cyberpunk’ in the literary world, offered perhaps the most brutal reflection on the cultural imbalance we are currently experiencing in the world today. Without dwelling on the context, the novel describes a future USA as being only really good at four things:
| Software |
| Movies |
| Music |
| Pizza Delivery |
Odd at first glance, but when you think about it, his observation sum up most succinctly the social and economic forces that will enable the US to continue to reign supreme in a globalised world. They are
-organisational control of the economy
-dominance of creative cultures, and therefore cultural identity
-the capacity to fulfil consumer expectations.
Australia and the EU must be alert to the implications of cultural dominance with respect to new forms of content, particularly internet content on social cohesion.
In response to these challenges, the EU has developed a research program that seems not only to have grasped the implications of cultural dominance, but have a strategy to address. It is about ensuring that communities have the means to participate in the preservation, participation and future creation of their culture through creating content. Such cultural content can be described as the arts (music, visual, performance etc) as well as regional information and entertainment services include local perspectives of global news, drama depicting the regional culture and indeed regionally orientated news, events and environment.
It is not about limiting access to global content, rejection or censorship, it is a program intent on ensuring there are opportunities, skills and capability for continual contribution to cultural identity and therefore community self esteem.
In a report titled Multimedia Europe: Content producers or ‘Voices from the Tower’, the capacity of the community to contribute to the expression of their culture in the digital environment, particularly via the internet is traversed. Remembering that this exercise is as much about preserving a sense of local identity and participating as a community as it is creating, the essential message of the report is that the EU has a responsibility to ensure that those in the community have the capability.
Europe was particularly astute in realising early on the cultural and hence political importance of digital content in a converging environment. The relationship between AOL and Time Warner is a vindication of their concern as content suppliers and distributors join together in a converged word with a view to using combined leverage to establish even greater market penetration. The theme that came through very strongly was the EU needed to build content production capability to ensure that they have a cultural presence in cyberspace.
Cultural content bears a direct relationship to national identity. Hence, this is an area of great interest and sensitivity for the European parliament and the myriad of administrative entities. The challenge central to the existence of the EU is economic unity, affording some security and opportunity to member states. I can’t help but see the EU as a microcosm of the phenomenon of globalisation. The political challenge is one of respecting, preserving and indeed enhancing cultural identity as economic identity decreases for the member states.
Domain names
Creation of the ".EU" Internet Top Level Domain is a part of these efforts. The international debate about domain names is perpetually inflamed by the imbalance in the production of internet content and the fact that the lack of the top level domain names on US sites (ie: just *.com, not *.com.au) implies a status of dominance.
On 2 February 200 the European Commission launched a public consultation about the creation of a new internet Top Level Domain: ".EU". The Commission Working paper raises several issues for consultation, including: The nature of the future registry organisation; how its registration policies should be prepared and implemented; and dispute resolution policies, with particular reference to trade marks.
The Commission Working paper is downloadable from:
http://europa.eu.int/comm/information_society/policy/internet/index_en.htm
Australia has sustained an impressive presence in this debate, but failed dismally to address the implications of lack of digital content production in Australia.
Recent decision such as the restrictions on the definition of datacasting have related Australia to the back blocks of the production of dynamic new interactive content. The failure to invest public money in the arts, particularly through multimedia projects again has weakened our position. Other examples of neglect in the is policy area include continual reductions in the budget of the public broadcaster, the ABC, which has stifled that organisations’ ability to build on the world class internet presence, ABC on-line.
The Government have also failed to lead by example through the production of a quality, cohesive on-line presence for the Federal Government. Most agencies are well behind in taking their services to the internet because of a flawed IT outsourcing program that has restricted agencies ability to procure the necessary expertise and deprived of the strategic control necessary to allow them to build up a sophisticated on- service delivery model that adheres to principles of ‘open government’.
Cyberdemocracy
E-Ping and political enthusiasm for the ‘net
E-Ping
During my attendance at the European Parliament in Strasbourg, a new European parliamentary group held their inaugural meeting. This group is called E-Ping, and positioned itself as the Internet caucus for the European parliament. Errki Liikanen Commissioner for the Information Society, addressed the gathering of MEP’s, journalists and parliamentary staff primarily on the e-Europe initiative, summarising the aims and objectives and calling upon MEP’s to take an active interest in the debates surrounding the internet.
It was clear that a progressive agenda was supported by this group by the nature and content of several presentation that were made. Censorship of the internet was seen as an unworkable approach.
The Foundation for European Network Society
On January 18, the Foundation moved another step forward to becoming a reality with founding MEP’s circulating a statement that articulated the mission of the Foundation.
"The mission of the Foundation will be to orchestrate and intensify european dialogue on internet related trends and policy issues through a central venue under MEP leadership. The Foundation will also help ensure informed and influential European involvement in global internet-related policy debate and resolution."
By virtue of pre-existing relationships of founding participants, both corporate and political, the Foundation has already established dialogue with the Transatlantic Policy Network, the Global Business Dialogue and the Global Cities Dialogue. The Foundation identifies ‘serving political leaderships’, and ‘important sectors of european civil society’ as those with whom it will establish ongoing co-operation. There is no detail as to what organisations or sectors constitute ‘important sectors of european civil society’.
The membership of the Foundation will be open to all MEP’s, as well as any individual or organisation with an interest in the development of Europe’s information society. Initial funding will be sourced from global IT industry leaders.
Once it is established, it is envisaged that a progressive fees structure will be put in place, designed to facilitate and encourage the involvement of SME’s, Trade Associations (unions are not specifically mentioned), interest groups, NGO’s and academia.
The Foundation apparently has ‘strong’ Commission support, but claims to be independent of the Commission and cites non-reliance of public funding as testimony to this.
This Foundation plans to officially launch on the 22 February 2000. The launch will coincide with a visit from the US Congressional Internet Caucus, and will be hosted by the TransAtlantic Policy Network (TPN).
Closing remarks
Lessons and opportunities for Australia.
Australia has the opportunity to lead in a number of policy areas as some aspects of the EU-US policy dialogue proceeds slowly. This will require foresight and credibility. Australia can potentially play a guiding role as these issues progress.
The implications of many of the issue raised in this report are significant, as many of the challenges the EU is currently taking on in global forums also impact upon Australian directly. For this reasons closer relations are desirable, particularly with respect to e-commerce and trade related issues.
According the Australian bureau of Statistics, the European Union has been Australia’s largest trading partner for the last eight years and continues to hold this position. This includes the areas of trade, services and investment income. The figures show that this relationship is maintaining its trend growth.
As innovation in information and other technologies drives growth around the world, Europeans relative late realisation offers unique opportunities to Australia, gien the depth of the trade relationship. The EU-Australian Collaboration on Science and Technology Agreement means that the organisational capacity to get Australians in the door is already in place. The continuing development of expertise in funding innovation in Australia places us well in the EU.
There are clearly many more opportunities for collaborative relationships on R&D to be explored with the EU and I encourage businesses and research institutions to seek these out and pursue them.
However, even the EU seems to be outpacing Australia with their political leadership articulating a vision beyond anything seen from the Australian Government to date in their e-Europe intitiative. It is my hope that this report serves as both a wake-up call to Australia that strong decisive action is required to ensure the digital divide is not entrenched. This demands that social policy considerations like social justice, equity of access, consumer rights and cultural identity are just as critical as trade and economic policy in the information society.
Labor’s vision for a knowledge nations addresses these issues. The Coalition does not, and has not over the period of their governance, since 1996.
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