[Weekly Compilation of Presidential Documents Volume 34, Number 21 (Monday, May 25, 1998)]
[Pages 884-886]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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. 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.


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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.
    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

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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. 
This item was not received in time for publication in the appropriate 
issue. An original was not available for verification of the content of 
this statement.