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The Global Tech Scene In 2004
by William NewWhile the United States' economic focus in a presidential election year will be largely domestic, the U.S. technology industry also will be watching various international developments as it tries to better its fortunes.
In some cases, the focus will be on regions, such as rapidly growing China. The focus will be on problems wherever they occur, such as the piracy of intellectual property or distribution of unsolicited e-mail, known as spam. U.S. copyright industries are engaged in a campaign against piracy worldwide, with major trading partners such as China and Russia at the forefront.
China will continue to top many people's lists because of the size and rapid growth of its economy, and U.S. companies will continue to monitor China's compliance with the market-opening commitments it made in joining the World Trade Organization two years ago.
Two Chinese policies on software procurement recently came into focus. This month, regulations implementing a 2003 procurement law that requires the government to purchase domestic goods and services are expected, and U.S. tech industry representatives want to ensure that it does not preclude procurement of foreign-made goods and services, an industry source said. China also is trying to expand its own software industry through establishment of goals and measures such as tax incentives, domestic procurement and intellectual property protection.
Tariffs, Taxes And Privacy In India
In India, elections must be held by October, according to Rick Rossow, manager of the working group on information technology for the U.S.-India Business Council. The tech industry is applauding a decision by the Indian government this month to cut tariffs on some products, including IT and electronics equipment such as cellular telephones and computers. The news was a surprise, coming well before the annual budget release Feb. 28, Rossow said.
India also will continue efforts to reform its tax regime. Last year, an attempt to assess new taxes on sales in India caused an industry reaction, as it appeared to apply to Indian-based customer-service centers, an area of expansion for U.S. firms.
The tax plan was later clarified to exclude call centers, but more changes are in the works in 2004 and could include customs valuation of software and electronics products, and taxes on e-commerce -- the fastest-growing industry in India, according to Rossow.
India also is developing a privacy policy. In September, the Indian government said it would try to find a method for complying with the stricter European Union policy of providing "adequate" protection for EU citizens' data while not placing additional requirements on companies from other countries such as the United States.
A Busy Agenda For A Bigger European Union
The European Union is set to grow by 10 nations in 2004, creating some uncertainties, but tech-savvy Ireland has the six-month revolving EU presidency until July, followed by the Netherlands.
The European Council in December set a focused tech agenda. It will seek to get all EU nations to implement new telecommunications regulations, as well as a new regulatory framework for electronic communications, and to develop high-speed Internet and advanced mobile communications. The council also will address the creation of European Community-wide patents, improvement of immigration flows with new technologies, and education and training.
The e-communications directive raises issues of spam and cookies, said Chris Kuner, a partner at the Brussels, Belgium, office of the law firm Hunton and Williams. Kuner also noted that in the spring the European Union will review the "safe harbor" agreement allowing U.S. firms to meet EU privacy standards. And he said the U.S. demand for airline passenger data to be shared before departure for U.S.-bound flights remains controversial in Europe.
Kuner added that regulations on the accessibility to electronic information could have a "huge" business impact and said tax questions will loom large, such as an e-invoicing directive in force since Jan. 1. And the battle over copyrights and anti-piracy technologies will continue, he said.
An EU official also identified the startup of a new EU communications regulators' group, a greater emphasis on research, and implementing the e-Europe strategy that includes initiatives such as better use of the Internet for government services, health and education. One more goal is to create by summer an European Network and Information Security Agency, the official said.
Tech Issues Top New Canadian Leader's Priorities
In Canada, new Prime Minister Paul Martin intends to make technology a priority. John Reid, president of the Canadian Advanced Technology Alliance, highlighted the nation's "burgeoning" industry in homeland security products, for which the U.S. market represents an opportunity.
Another emphasis will be on growing new tech enterprises into "flagship" companies like Canada's Nortel through mechanisms such as a research and development tax credit and the sharing of "best practices," Reid said. He also noted that with the U.S. exchange rate unfavorable to Canada, companies might look elsewhere for markets, such as China, India, Europe and Australia. And improving education and training is on Canada's priority list.
Reid also mentioned data privacy. A federal privacy law took full effect Jan. 1 for all Canadian organizations. Alberta, British Columbia and Quebec have enacted their own laws, possibly to be followed by Ontario and others, according to University of Ottawa law professor Michael Geist. In December, Quebec announced constitutional challenge to the federal law, and Geist predicts that it will reach the Canadian Supreme Court by 2005.
Another top issue in Canada will be copyrights. The Canadian Recording Industry Association indicated in December that it may sue individuals for illegally sharing music online, while a December Copyright Board of Canada decision essentially supported legal file sharing.
On spam, Canada may follow Australia, the European Union and the United States, all of which passed anti-spam legislation last year. The Canadian government has initiated consultations on the possibility of anti-spam legislation.
Trade, Cyber Security And The Information Society
The Bush administration, meanwhile, is trying to complete trade negotiations with Australia and Central America in order to send them to Congress for passage before this year's elections.
The Office of the U.S. Trade Representative hopes to add the Dominican Republic to the U.S.-Central America pact and said separate trade negotiations would begin this year with Bahrain, Colombia, Panama, Peru, Thailand and, "when ready," Bolivia and Ecuador. In 2005, negotiations are scheduled to conclude for a Free Trade Area of the Americas and in the "Doha Round" at the World Trade Organization.
On cyber security, companies globally will try to continue to improve their practices in hopes of avoiding regulations forcing them to do so. Other top issues headlining 2004 will include international negotiations on jurisdiction in e-commerce disputes, separate e-commerce and broadcasting treaties, precedent-setting legal cases, and the ongoing spread of "open source" software that allows users to modify underlying code.
Finally, follow-up to the December U.N. World Summit on the Information Society in Geneva will be "key" this year, with the summit's second phase set for 2005, according to David Fares, e-commerce director at the U.S. Council for International Business. At the summit, leaders asked the U.N. secretary-general to form a working group on Internet governance issues.
"I really think this is going to be a year of organizing and educating on the benefits of vibrant competition and liberalization of telecommunications markets and on Internet governance," Fares said.
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