The Electronic Silk Road: How the Web Binds the World Together in Commerce.

Author:Birnhack, Michael
Position:Book review
 
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The Electronic Silk Road: How the Web Binds the World Together in Commerce. By Anupam Chancier. New Haven, London: Yale University Press, 2013. Pp. xii, 278. Index. $30.

In The Electronic Silk Road: How the Web Binds the World Together in Commerce, Anupam Chander, Professor of Law and Director of the California International Law Center at the University of California, Davis, School of Law, places the globalization of information services under the spotlight. "Net-work" or "Trade 2.0," as Chander labels this topic (p. 11), is a relatively new phenomenon of information services, delivered remotely through communication systems, on a global scale: software code preparation, call-center facilities, and accounting, radiological, and legal services are a few of the examples discussed in the book. Trade 1.0 deals with goods; Trade 2.0 deals with services. Global commerce and its quest for an optimal division of labor drive Trade 2.0, and technology enables the provision of online cross-border information services. The service providers are located in one country, India deserving prominent attention in the book, while the service recipients are located in another country, typically in the United States. Chander offers a rich description of the "net-work," based on carefully selected figures and numerous examples, as well as a close, critical evaluation of pros and cons. Importantly, he argues that services are provided in both directions of the developed-developing countries division (and he seems to avoid deliberately the North/ South language), with Google, Facebook, and Apple serving as leading examples of the developed-to-developing direction--or, more accurately, the United States to the world.

  1. THE ARGUMENT IN A NUTSHELL

    To the intersection of economics and technology, Chander adds the law and identifies the challenges of the "net-work" (p. 2). Ultimately, the question is the familiar issue of conflict of laws: which law governs online services? Chander unpacks this overarching issue and recognizes four subissues: (1) the legal barriers to the online trade of services; (2) an inadequate legal infrastructure; (3) the question of jurisdiction; and (4) the risk of balkanization, namely, the concern that each country will impose its laws onto "its" Internet environment. In response to these challenges, he offers a thoughtful and multidimensional answer, which is composed of several elements meant to both liberalize and regulate cybertrade. As for liberalization, Chander proposes a robust infrastructure with two main elements: technological' neutrality, by which he means treating offline and online services in a like manner; and dematerialization of the law, by which he means that international trade law should not only shift from a products-based paradigm to a service-based paradigm but also abandon laws that rely on physical presence and instead apply a different set of rules. As for regulation, Chander suggests "glocalization" and harmonization as two supplementing elements. "Glocalization"--the meeting of the "global" and the "local"--translates into "requiring a global service to conform to local rules" (p. 11), thus applying the law of the recipient, rather than the law of the provider. Glocalization is checked by a companion principle, harmonization of the law, where possible. I shall elaborate on these concepts later on.

    This review begins by summarizing the book's foundations and main arguments along its two principal parts--the description and challenges of Trade 2.0 (chapters 1-5) and the proposed normative framework (chapters 6-9). Along the way, I make a few critical comments as to the book's main arguments. In brief, I argue that the description of the net-work is somewhat too optimistic in that it is not sufficiently sensitive to the asymmetry of the import/export balance among the developed and developing countries and in that it does not take into account particular services, such as online live pornographic services, which may evidence abuse of those involved. The discussion also adds the now-apparent risk to Trade 2.0--state surveillance--following the revelations about the practices of the U.S. National Security Agency (NSA). The review then continues with the book's normative argument, which, I argue, also downplays power relationships. Acknowledging that power relationships shape what kinds of services are provided by whom to whom and that they affect the governing law requires further nuancing of the net-work. However, Chander's overall argument is attractive and offers a fresh outlook on a fast growing aspect of our digital and commercial lives.

  2. FOUNDATIONS

    The book first lays out the evidence to make its case. Chapter 1 describes the shift from a global supply of goods to a global supply of services. Chander cites a report of the Organisation for Economic Co-operation and Development (OECD) estimating that one-fifth of the service jobs in developed economies will be affected by cross-border trade (p. 24). The economy provides the motivation, and the technology facilitates the "organizational revolution" of the net-work (p. 19). But the inadequate legal infrastructure raises legal risks. The author recognizes this shift and finds enormous promise in the development of the net-work, and he consequently seeks to offer ways to address the legal risks.

    Chapter 2 takes us en route from the United State to other places: France, Brazil, and China. Chander argues that "Silicon Valley has emerged as the world's leading net-work provider" (pp. 36-37). U.S.-based companies such as Google, Yahoo!, and Facebook furnish information services to the world. The numbers talk: the United States exports more services than it imports, to the extent that the author concludes that "[a]t the moment, at least, the United States has a stronger claim to being the world's back office than India" (p. 38). The law--that is U.S. law--has facilitated this information-service export by strong free-speech guarantees, immunity to Internet platforms for user-generated content, and weak...

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