Book Symposium: Comments on Anupam Chander’s The Electronic Silk Road

[Michael Birnhack is a Professor of Law at Tel Aviv University]

Anupam Chander’s new book, The Electronic Silk Road is an admirable scholarly achievement. Chander draws our—the global community of cyberspace users—attention to the increasing globalization of information-based services. He discusses the pros and cons of what he calls cybertrade or Trade 2.0, or more specifically, net-work, with much clarity, drawing on a wide array of examples, ranging from North to South. The book provides a rich description and timely observations, as well as a sound and coherent set of principles to address the new challenges. The book is a highly important contribution to the discussion about international trade, globalization studies, and to the on-going debate about the role of the law in a dynamic technological setting. In fact, Chander paves a new path in these discourses.

The trigger is the observation that alongside global trade of products, we increasingly experience net-work, which is (p. 2) “information services delivered remotely through electronic communications systems.” Importantly, these services are provided in both directions of the North-South global division. Net-work raises a regulatory challenge: which law should govern? Chander examines various options—should it be the law of the country that exports the services or the law of the importing country? His judgment favors the latter: “importing of services should not require us to import law as well” (p. 6). In other words, he would require global service providers to conform to the local law at the country of destination. This is the principle of glocalization, as applied to cybertrade, which he elaborates in Chapter 8. Glocalization’s role is to curtail the race to a deregulated bottom: under a legal regime that allows global service providers to apply their own law, i.e., the law of origin, they are likely to choose and operate from the most convenient regime, to their benefit, at the expense of the global consumers. Glocalization does not allow this race. Importantly, Chander insists that glocalization should be consistent with international norms and is supplemented by harmonization, where possible.

Glocalization is the meeting point of the global and the local. Sociologists observed it in various forms, such as food (see Uri Ram’s studies for example): when the American-global McDonald’s opens a new branch in India, it might cater to local norms and not serve beef; when it opens a branch in Jerusalem, it will not offer the non-kosher cheeseburger. At the same time, local cuisine is exported to the global circles, but is adapted to local taste. Think about it the next time you have hummus with guacamole topping at Hummus Brothers in London, or a falafel in a fast food-chain like setting in Tel-Aviv. These special examples show that there is no one fixed point between the global and the local. Rather, it is a spectrum. Applied to net-work, Chander opts for a point that is closer to the local end: global services should adapt to the local rules at the recipients’ location.

Chander’s Glocalization has its appeal. Indeed, it is likely to solve the race to the deregulated bottom; it respects local sovereignty and local mores, and it mitigates globalization’s often aggressive imposition of foreign notions onto an unwilling population. I would add that glocalization replicates real physical transactions: for example, if a producer of food wishes to sell his products in a foreign country, he must comply with local food and health regulations. On the down side, as Chander admits, this glocalization contrasts the utopian vision of cyber enthusiasts (p. 172). The world will not live as one, to paraphrase John Lennon, but Chander believes this is not necessarily a bad thing.

I join the observations regarding the positive sides and the much needed sobering-up from the cyber utopia. Moreover, although often ridiculed by cyber enthusiasts, replicating offline experiences in the online environment might be a good idea (another example is the “right to be forgotten”, which attempts to bring back the human trait of forgetting to a digital space that forgets nothing). But missing from this picture is the place of power relations among different kinds of importers/exporters of information services, situated in different political, social, economic, and legal contexts. Once we observe more nuances, Chander’s glocalization might be somewhat less attractive. Chander seems to acknowledge this, and offers harmonization as a supplementary principle (p. 179). However, harmonization also suffers from the same problem: it is not sensitive enough to various manifestations of power divisions.

We can draw a matrix of situations, in addition to the parameters of import/export of information services, more, such as: (1) What kind of service is at stake? is it a pure-commercial service, such as calling centers, or does it involve political-cultural norms, such as freedom of expression, as in the famous French Yahoo! Case? (2) What sort of information is involved in the service? Personal data about citizens in the country that exports the data in order to import information services (this is the case with off-shore customer relationship management) is different from importing information about financial options in a foreign country. The former case carries a direct, legitimate interest of the exporting-data-importing-services country as to its citizens’ personal data, which is absent in the latter case. (3) Which are the countries involved? Every country has its unique information import/export balance that is often the result of the economy’s size and culture. For example, I assume Slovenia imports foreign cultural informational products such as music and movies, but exports less cultural goods, due to size, language, and cultural differences. (4) What is the global market setting in a certain field? Glocalization a-la Chander favors large companies that can afford tailoring their activities to each separate local market. Google and Apple can do it, but for the new start-up just set up in Bangalore or Santiago de Chile, this is a substantial barrier to enter the global market.

This more nuanced matrix, which can surely be more complicated, reveals that on some occasions glocalization is not the best solution. Perhaps we would prefer a norm of global free speech, first amendment style, to local norms which in effect mean censorship? The EU’s rule re personal data of its own citizens is that the law should follow the data. Given the goal of protecting their own rights, perhaps the foreign law is justified even when applied to local transactions in a non-EU country? Power relationships play in mysterious ways.

Moreover, there is a moral question. Cybertrade is often intertwined with normative issues of the highest political importance: enabling sellers to offer Nazi memorabilia for sale is a matter of trade, but also a matter of freedom of expression/hate crime, depending on one’s political morality. Chander’s glocalization enables each country to make—and impose—its own political choices. This respects local sovereignty and democratic processes. It might work well when the debate is between the American First Amendment and the French decision as to how to demarcate the contours of freedom of expression. But not all countries are democratic. Glocalization will enable Iran to require Facebook to censor images of women; it will enable China to require that Google blocks results to Tiananmen Square events of 1989. Allowing local leeway respects a country’s choices, but not necessarily its people. It might also make the (foreign) service providers morally responsible for contributing to non-democratic acts in the (local) markets.

Chander offers harmonization—where possible—as an important limitation to the glocalization principle. The local norms, he argues should fit international law standards. This should answer the concern I raised in the previous paragraphs. But harmonization is not always achievable, or put differently, there is rarely any harmony in harmonization. Global unified and ethical standards sound wonderful. But the process of achieving harmonization is sometimes harmful. Mere declarations may set a moral and legal standard, but they lack the power of hard law. Global declarations are soft law, and might nevertheless be influential, such as the U.N.’s Universal Declaration of Human Rights of 1948, but this is the exception rather than the rule. Other harmonized agreements were achieved only by way of sophisticated diplomatic maneuvering, taking advantage of political weaknesses, shifting from one forum to another according to the needs of the stronger party, bundling various issues together, and much more. TRIPs, the WTO’s agreement on Intellectual Property issues, is the case I have in mind.

I point to the shortcomings of glocalization and harmonization not in order to suggest a different set of principles. The alternatives, as Chander elaborates, are probably worse. His discussion and arguments are timely and crucial for enabling a better global environment. His book opens up a whole new set of issues with which the global or local “we” are bound to engage with in the foreseeable future. Chander beautifully weaves together theory and practice, trade, culture and politics, into a complex yet clear argument, sophisticated yet down to earth, and a beautifully written text.