    [Public Papers of the Presidents of the United States: William J. Clinton (1998, Book I)]
    [May 15, 1998]
    [Pages 766-768]
    [From the U.S. Government Publishing Office www.gpo.gov]

    United States-Japan Joint Statement on Electronic Commerce
    May 15, 1998

        Electronic commerce will be an engine of economic growth in the
    Twenty-first Century, with the potential to invigorate economies by
    enhancing productivity, streamlining distribution, and revamping
    corporate structures.
        Electronic commerce will enhance the standard of living of citizens
    in the United States and Japan, as well as the rest of the globe, by
    creating new, high-paying jobs and opportunities. Small and medium-sized
    enterprises, in particular, will benefit from new opportunities to sell
    their products to a worldwide market.
        The Governments of the United States and Japan recognize the
    importance of working together to promote global electronic commerce.

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    We support and endorse the following fundamental principles and
    policies, which should guide the development of electronic commerce.

    I. General Principles

    1. The private sector should lead in the development of electronic
    commerce and in establishing business practices.
    2. Both governments should avoid imposing unnecessary regulations or
    restrictions on electronic commerce. Government actions, when needed,
    should be clear, transparent, and predictable to the private sector.
    3. Governments should encourage effective self-regulation through codes
    of conduct, model contracts, guidelines, and enforcement mechanisms
    developed by the private sector.
    4. Cooperation and harmonization among all countries, from all regions
    of the world and all levels of development, will assist in the
    construction of a seamless environment for electronic commerce.

    II. Policy Issues

    5. Tariffs.
        There are currently no customs duties on electronic transmissions.
    The United States and Japan will work toward a global understanding that
    this duty free environment should remain, for free trade in electronic
    commerce will promote the growth of electronic commerce and economic
    growth worldwide.
        The United States and Japan welcome the announcement of the Quad
    Ministers to work toward a comprehensive work program in the WTO on the
    trade-related aspects of electronic commerce, and both nations will
    actively participate in this process. In the meantime, both nations will
    adopt a standstill, as outlined in the Quad statement, that preserves
    the current practice of not imposing customs duties on electronic
    transmissions.
    6. Taxes.
        We will actively participate within the Organisation for Economic
    Co-operation and Development to work toward developing framework
    conditions for the taxation of electronic commerce. Close cooperation
    and mutual assistance are necessary to ensure effective tax
    administration and to prevent tax evasion and avoidance on the Internet.
    7. Electronic Authentication/Electronic Signatures.
        Governments should support the development of a global framework
    that will recognize, facilitate and enforce electronic transactions
    worldwide. Authentication methods and technologies are developing
    rapidly, and the range of uses is expanding. The United States and Japan
    support the development worldwide of legal structures that will support
    a variety of authentication methods and technologies, as well as a
    variety of implementation models. As nations review their own legal
    framework to address authentication methods, including digital
    signatures, they should observe the following principles:
            a.  The efforts of the private sector in constructing rules and
                guidelines should be encouraged.
            b.  Electronic signatures should be recognized as functionally
                equivalent to handwritten signatures, and acceptable for
                legal purposes.
            c.  Furthermore, parties to a transaction should have the
                opportunity to prove in court that the authentication
                technique used in the transaction is valid.
            d.  Parties to a transaction should be permitted to determine
                the appropriate technological and business methods of
                authentication for their transaction.
            e.  Governments should take a non-discriminatory approach to
                electronic signatures and authentication methods from other
                countries.
    8. Privacy.
        Ensuring the effective protection of privacy with regard to the
    processing of personal data on global information networks is necessary
    as is the need to continue the free flow of information. With regard to
    frameworks for personal data protection, governments and businesses
    should consider consumers' concern about their private information.
    Since content, usage, and the method for collection of private
    information differ from industry to industry, means for privacy
    protection should be considered by each industry. Enforcement mechanisms
    would be developed and implemented by the private sector, including
    preparing guidelines and developing verification and recourse
    methodologies, and supported by the public sector. If data in a certain
    industry is highly confidential, legal methods can be considered for
    that industry.
    9. Content.

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        Content should be transmitted freely across national borders in
    response to a user's request. The Internet will promote cultural
    diversity by expanding the selection and reach of low cost distribution
    options for content, so trade barriers to the free flow of content
    should be avoided. Governments should not impose stronger restrictions
    on content on the Internet than exist in the real world. In instances
    where users do not wish to receive certain types of content, such as
    that which is unsuitable for children, filtering/blocking systems or
    other tools should be made available. On-line service providers should
    not be asked to monitor all the content being transmitted over their
    network, but should be expected to work with domestic law enforcement
    authorities as well as with their international counterparts to stem the
    transmission of illegal content.
    10. Electronic payments.
        Developments in this area should recognize the importance of private
    sector leadership, and should promote both a competitive market for and
    user confidence in electronic payment systems.
    11. Intellectual Property Rights.
        Growth of electronic commerce depends on the adequate protection of
    intellectual property rights including industrial property rights and
    copyrights. The global protection of patents concerning infrastructure
    of electronic commerce is essential for the progress of electronic
    commerce. The protection of copyrights will be assisted by the prompt
    ratification and implementation of the WIPO Copyright Treaty and the
    WIPO Performances and Phonograms Treaty.
    12. Domain Name System.
        In order to reach its full potential, the system for registering,
    allocating and governing domain names should be global, fair and market-
    based and reflect the geographically and functionally diverse nature of
    the Internet. The said system should also give business the confidence
    that trademark rights are to be protected by establishing a self-
    regulatory regime on a global basis.
    13. Consumer Protection.
        Electronic commerce should afford consumers the same level of
    protection as is provided in other forms of commerce.

    III. Future Work

        We will continue to work together to support the development of
    global electronic commerce in the future, through:
    14. Close policy coordination between the United States and Japan to
    promote electronic commerce.
    15. Continuing substantive bilateral discussions at the experts level on
    issues regarding electronic commerce.
    16. Encouraging private sector leadership through dialogue and
    cooperation between the private sectors of both countries, for example,
    the Working Group on Electronic Commerce of the U.S.-Japan Business
    Council.
    17. Close cooperation between the United States and Japan at
    international fora--which may include, for example, WTO, OECD, WIPO,
    UNCITRAL and APEC--to support the development of global electronic
    commerce.

    Note: This statement was made available by the Office of the Press
    Secretary on May 15 but was not issued as a White House press release.
    An original was not available for verification of the content of this
    statement.