CHAPTER 32

THE NORTH–SOUTH DIVIDE, T

HE DIGITAL AGENDA, AND DIG
ITAL DIPLOMACY
JORGE HEINE AND JUAN PABLO PRADO LALLANDE

In the digital age, few issues are as significant as the one of who controls
the Internet (de Nardis, 2010). In a world in which more and more activities
are moving towards a virtual mode, a trend accelerated by the Covid-19
pandemic, setting the rules of the Internet is crucial. In this, the Global
North, and particularly the United States, has enjoyed an extraordinary
advantage. As the country where the Internet was invented, under the guise
of multistakeholder governance and the pretence that some sort of loose
alliance of private companies, academics, and consumers run the World
Wide Web, the US government, through the Department of Commerce, has
kept its hand firmly on the lever of Internet governance (Winseck, 2017).
While this was not much of an issue in the early days of the web, it has
become one as the Internet emerges as a dominant force in a world in which
half the population of the planet is connected to it (Mansell, 2012). As the
running of governments, businesses, and even our daily lives depends on it,
the notion that the world’s Internet governance should rely on the whims
and wishes of the government of one country has become more and more
contested.
In turn, the issue of Internet governance goes to the heart of today’s
North–South divide. While the United States and other Northern countries
defend the principle of multistakeholder governance, in the Global South,
countries like China and Brazil espouse multilateralism, that is, the
traditional approach to handle global issues (Kleinwachter, 2004; Liu,
2012). In fact, some of the most high-profile clashes in the struggle for
primacy between the United States and China are being played out on the
digital frontier, as in the efforts of the United States to curtail the business
activities of Huawei, the Chinese telecom company and the deployment of
its 5G technology (Tang, 2020). Yet, as Shaun Riordan (2018: 3) has
observed:
Diplomats have largely ignored Cyberspace as a domain for diplomatic activity. They have
focused instead on the tools which Cyberspace can offer for carrying out their tasks, whether
messenger apps in multinational negotiations or social media platforms for consular work or
public diplomacy. They have left Internet governance … to technicians, communications experts
and the military/intelligence services.

In the spirit of Riordan’s sharp insight, the purpose of this chapter is to

examine the issue of Internet governance (Broeders, 2015) and related
digital matters in the North–South agenda from a diplomatic perspective. A
first section discusses the impact of the Edward Snowden revelations in
2013 on the extant debate on ‘Internet freedom vs. government control’; a
second one discusses the international political economy of Internet
governance; a third parses the rise of the Global South; a third parses the
international political economy of Internet governance; a fourth one
discusses the issue of data collection and privacy rights; a fifth one does so
with digitalization and the international political economy; a sixth one
examines the debate of multistakeholderism versus multilateralism in
Internet governance; a seventh one does so with the clashes between China
and the United States on Huawei; an eighth one, with the matter of
international electronic espionage and Internet governance; and a ninth one,
with the case of the Digital Economic Partnership Agreement (DEPA), an
initiative of three small countries that has broken new ground, and raised
quite a ruckus in doing so; some conclusions round out the chapter.

Mass Surveillance, Internet Freedom, and Government

Control of the Web

The rise of the Internet has gone hand in hand with the growth of social
media. Platforms like Facebook, Instagram, Twitter, LinkedIn, Snapchat,
WhatsApp, and TikTok Telegram have become key communication tools—
displacing traditional media and upending established social and political
practices. Although they had an immediate impact in many countries
around the world, their use was especially visible during the so-called Arab
Spring that erupted in 2011, and particularly so in Egypt. Social media
turned into a key organizing and scheduling tool, allowing tens of thousands
of demonstrators to coordinate their actions in and around Tahrir Square, in
the heart of Cairo, and played an important role in the fall of President
Hosni Mubarak. Suddenly, Facebook and Twitter were elevated to the status
of democratizing tools, key instruments in the struggle to bring greater
openness and freedom to the oppressed peoples of the Global South (Pew R
esearch, 2012). Less remarked upon was the fact that much as social media
can be used to organize social protests, the very same technology can be
used by governments to track down and repress the demonstrators, which is
exactly what happened in Egypt and elsewhere in the Arab world at the
time, with results known to all.
No matter. By that time, developments in the Arab world had seemed to
buttress the argument that the Internet and the social media apps that go
with it was a liberating, democratizing force, one that empowered millions
and was turning into the bane of dictators and strongmen everywhere. This
also played nicely into the fact that the United States was deploying its own
digital diplomacy in a highly ambitious US State Department initiative led
by none other than Secretary of State Hillary Clinton herself. Technology
and ideology merged seamlessly into the cause of ‘Internet freedom’, which
became a rallying cry of United States diplomacy (Clinton, 2010).The
Internet would not only fuel the Arab Spring, it was said, but also the ‘color
revolutions’ in Eastern and Central Europe. US digital diplomacy was
husbanded for these purposes—in Syria, Iran, Cuba, and wherever
adversarial regimes were to be found. Who but these very regimes could
question the wisdom of the established governance mechanisms of the
Internet, multistakeholder systems that allowed the Internet to flourish,
while being spared the bane of multilateral control by a UN bureaucracy,
that would only drive it into the ground? Thus the defence of the Internet
Corporation for Assigned Names and Numbers (ICANN), the California-
based entity that runs the Internet (Mueller, 1999).
Heavy tomes would be published by Clinton’s assistants praising the
cause of Internet freedom and the alleged benefits it entailed for humanity
(Schmidt and Cohen, 2013; Ross, 2016).
And then it happened. Edward Snowden, a National Security Agency
(NSA) contractor employed by Booze Allen Hamilton, revealed in 2013
that, in parallel to championing the cause of Internet freedom, the United
States government also engaged in mass surveillance practices around the
world (The Guardian, 2013). This entailed tapping into the communications
of billions of people and dozens of world leaders, including tapping the
telephones of the leaders of ostensibly friendly countries like Angela
Merkel of Germany and Dilma Rousseff of Brazil. Over 1.7 million top
secret documents revealed activities led by the US NSA in consortium with
the intelligence agencies of the UK, Australia, Canada, and New Zealand
(the famous ‘Five Eyes’). This mass surveillance operation through
programmes like PRISM introduces spyware into Android and other
systems and taps into and stores billions of phone calls and financial
transactions (Snowden, 2019).
So far, so good. Spying is as old as humankind. What else is new? The
problem is that the US government did this hand in hand with leading
technology, telecommunication, and Internet companies, often for the price
of millions of dollars. Among the companies involved are Apple, Microsoft,
Google, Facebook, and Yahoo. Vodafone admitted that as many as six
different countries had asked for access to its submarine Internet cables to
monitor communications.
This, of course, is very much against the right to privacy citizens are
supposed to enjoy. In other words, while preaching Internet freedom, the
United States was busily setting up an Orwellian operation destined to
exercise mass surveillance of almost every phone call and electronic
communication taking place around the world and store it permanently, in
crass violation of the right to privacy.
The reaction around the world was swift and unforgiving, particularly so
among the BRICS countries. Brazilian President Dilma Rousseff cancelled
a scheduled state visit to the United States and did not relent even after a
special phone call from President Obama (Heine, 2013). Brazil would later
introduce a resolution at the United Nations to curb electronic espionage, a
practice Brazil linked to a deficient Internet governance structure that
facilitated it (Abdenur and Gama, 2015). We will come back to this later in
this chapter.
In any event, the cause of ‘Internet freedom’ was dead and buried. The
coming to light of these mass surveillance practices, however, gave new
impetus to the efforts of Global South countries to gain a measure of
international control of the Internet, albeit with little success. The Internet
came into its own as a widely used tool in the nineties, at the time of the
United States’ ‘unipolar moment’, yet its governance has hardly changed in
the past thirty years, despite the emergence of a very different, multipolar
system. (Carr, 2016). Not surprisingly, some of the strongest clashes
between the United States and rising powers have thus taken place on the
digital frontier—with Russia on cyber and ransomware issues, with China
on the application of 5G technology, and with Brazil on electronic
espionage.

The International Political Economy of the Internet

But the issue is not limited to the concern of rising powers. All around the
world, countries are being forced to choose between different kinds of
telecommunications technology and digital connectivity (Stuenkel, 2021).
Accordingly, the issue is coming to the forefront in North–South relations,
making for some difficult diplomatic compromises. In the nineties, as the
Internet first became a global network, the main issue was largely one of
access, with control being of little concern. Yet, as time went by, this
changed.
After 9/11 and the emergence of the Global War on Terror (GWOT),
electronic espionage increased, and the pressure for international regulation
of the Internet grew, leading to the World Summit on the Information
Society in 2003 and 2005. Yet, efforts to shift control away from ICANN
and towards entities like the International Telecommunications Union (ITU)
did not succeed. The India-Brazil-South Africa Forum (IBSA) in 2006
supported some sort of multilateral regulation of the Internet, followed up
in 2011 (Mueller, 2011), though subsequent differences within the group
rendered the initiative moot. Later on, the BRICS group set forth its own
initiative on the subject, proposing the development of submarine, fibre
optic cables connecting the member states (BRICS, 2014).
As Winseck (2017) has argued, it is obvious that the United States plays
a leading role in the Internet, not just because of its control of Internet
governance, but also because the main Internet companies are US-based—
Apple, Facebook, Google, Microsoft, and Netflix—and thus exercise an
inordinate amount of influence in the digital domain. The US thus holds a
strong presence in operating systems, search engines, social networks, e-
commerce, browsers, and domain names. That said, the same cannot be said
about the material infrastructure of the Internet, things like the fibre optic
submarine cables that connect the world, content delivery networks
(CDNs), autonomous system numbers (ASN), and Internet exchange points
(IXPs) (Winseck, 2017). In the latter, countries like China and others play
an important role.
The BRICS group, formed of Brazil, Russia, India, China, and South
Africa, has been referred to as ‘the acronym that defined the decade without
a name’ (the 2000s), and with good reason. In a decade book-ended in the
North by 9/11 and by the financial crisis of 2008–2009, in the BRICS
countries, vigorous growth, an ability to weather the effects of the
recession, and a willingness to reach out to the rest of the developing world
put them in a sweet spot. While the North seemed absorbed by its own
problems, the BRICS countries, hailing from four different continents,
appeared as forward-looking, future-oriented nations, ready to tackle not
just their own but the world’s problems. Without carrying the baggage of
former colonial powers, they also represented a friendlier face to their
Global South partners, as well as a different, more comprehensive
conception of what international cooperation is all about.
The second decade of the new century was less friendly to several of the
BRICS member countries, and soon the narrative changed. Suddenly, the
conventional wisdom became that their time had come and gone. The
BRICS countries were as passé as yesterday’s baguette, or so it was said (C
ouncil on Foreign Relations, 2012). By mid-2016, eight years after the
financial crisis, it was said, it was the ‘serious’ countries, i.e., the United
States and the United Kingdom, that were back in charge of economic
global governance.
Well, that was then, this is now. In June 2016, the United Kingdom voted
to leave the European Union, and spent the next four years grappling with
Brexit. In November 2016, the United States elected Donald Trump as
president, and the United States spent the next four years leaving as many
international institutions as it could, even considering at some point leaving
the International Postal Union (IPU). And although Trump lost the 2020
presidential elections, and was replaced by a president more friendly to
multilateral institutions and international cooperation, Trump has
announced he will run again in 2024, and the possibility of him, or an
equivalent Republican candidate, returning to the White House with a
similar isolationist international agenda looms large.
 We are now entering a new global order, some would say a post-Western
world (Stuenkel, 2016). What are the implications of this for the Global
South? And particularly, what are the implications of it in the digital
domain?

From Third World to New South

In the sixties and seventies, the new nations of Asia, Africa, and the
Caribbean were weak, highly dependent on trade and investment links with
the North, and resentful about the legacy of slavery/colonialism (Getachew,
2019). Believing that there was strength in numbers, they gathered in a vast
array of entities, led by the Non-Aligned Movement. They practiced
‘diplomacy of the cahiers des doleances’, that is, grievance diplomacy, with
proposals like that of the New International Economic Order.
However, in the 2000s, the rise of the Asian giants, as well as that of
countries like Brazil, Indonesia, Turkey, South Africa, and Mexico, changed
this. Rather than speaking from weakness, these countries spoke from
strength. Instead of assembling in large conglomerates, they did so in
smaller, informal diplomatic ‘clubs’ that allowed them to leverage their
newly acquired industrial base (Stuenkel, 2013).Trade, rather than aid, was
what they demanded. And countering charges of being mere ‘talk shops’,
they allocated budgetary resources to back up their programmes, engaging
in what Roberts et al. (2018) have called ‘collective financial statecraft’.
China set up the Asian Investment and Infrastructure Bank (AIIB) in 2015,
headquartered in Beijing, with a capital of US $100 billion. That same year,
the BRICS group, in turn, set up the New Development Bank,
headquartered in Shanghai, with a capital of $50 billion.
Thus the confluence of geoeconomics and geopolitics. As Asia rises to
become the new centre of the world economy, with China at its core, and
the North pulls inward in protectionist and isolationist mode, North–South
relations take on a different character. The world moves towards a
multipolar order, with no single dominant power, marked by the relentless
pressures of globalization. The latter have slowed down somewhat (hence
the term ‘slowbalization’), due to the extraordinary turnaround in the
respective positions of the Global North and the Global South on this. The
embrace by different political forces in North America and Europe of anti-
globalization as an electoral plank and a key element of their political
programme has succeeded in slowing down the flow of goods, services,
capital, and people that are the hallmark of our age, but may be ultimately
destined to fail. On the other hand, the forces of technology and innovation,
in IT, telecoms, AI, nanotechnology, and robotics, are pulling the world
together, not apart (Heine, 2020).
As this tension between the forces of technological innovation and the
forces of protectionism and isolationism plays itself out, much of the future
of the international political economy will be decided. A key role here will
be played by the digital agenda and the issues related to digital diplomacy,
issues to which we now turn.

Data Collection and Privacy Rights

In this context, a not insignificant issue is that of data collection and

management. As Riordan (2018) has commented, the attitude towards the
Internet in the leading powers has been very much shaped by the time and
the setting in which the web ‘arrived’ in each of them. As the inventor of
the Internet, the United States sees it, at least in theory, as a freewheeling
mechanism best left alone to the forces of the market, for individuals to
enjoy and companies to profit from, with a minimum of governmental
interference—except, of course, when it comes to the activities of the
security and intelligence agencies. This view is also strongly marked by the
fact that the Internet flourished especially in the rugged West—particularly
in California’s Silicon Valley, hand in hand with its strong individualistic
ethos, and risk-taking venture capitalists. There is a reason why Mark
Zuckerberg packed up and moved his nascent Facebook company from
Cambridge, Massachusetts, to Mountain View, California—that is where
the action was (and is) for up-and-coming social media companies. Yet, as
Shoshana Zuboff (2020) has pointed out, these companies quickly realized
that, as the saying goes, ‘data is the new gold’, and that it was from the
harvesting, managing, and mining of this data for marketing purposes that
the road to profitability lay. Thus the rise of ‘surveillance capitalism’, one
in which ‘digital connection is now a means in others’ commercial ends’
and ‘instead of labor, surveillance capitalism feeds on every aspect of every
human experience’ (Zuboff, 2020: 9). That has been very much the case
since then, and as the Big Tech companies like Google, Microsoft,
Facebook (today’s Meta), and Apple have grown into the giants of today,
the United States is still grappling with the issue of how to protect the data
of individual citizens, and no federal legislation has been passed in that
regard.
In Europe, the situation is very different. As the Internet arrived in
Europe in the nineties, in the wake of the fall of the Berlin Wall and the end
of the Cold War, the trauma caused by legacy of the security states behind
the Iron Curtain raised concerns about how the Internet and the new digital
tools could be deployed by ‘Big Brother’, as well as by commercial
companies bent on extracting the most profits through them, often to the
detriment of citizens and consumers. Thus, an initial Data Protection
Directive adopted by the European Union in 1995 put an emphasis on
‘protecting personal data as a fundamental right’ (Chase, 2019). This was at
the very beginning of the Internet, and much transpired in the following two
decades, laying the ground for the EU’s General Data Protection Regulation
(GDPR) that came into effect on 25 May 2018. And whereas the Directive
provided broad guidelines for the EU member states, guidelines that needed
to be applied via national legislation, the GDPR stands on its own and has a
direct effect in all EU member states. The GDPR thus covers almost all
‘processing by both government and non-government entities of personally
identifiable information (PII),’ where PII is expansively defined as ‘any
information related to an identified or identifiable natural person’ (including
online identifiers like an IP address) and where ‘processing’ means ‘any
operation performed on personal data, whether or not by automated means’
(Chase, 2019).
The GDPR has since become a major issue of contention between the EU
and the (mostly US) Big Tech companies, which have been forced to handle
the data they collect in a much less cavalier fashion than they used to—
though, revealingly, the GDPR exempts the security and intelligence
services from its coverage.
China stands in a category of its own. The Internet came late to China,
and was initially received with suspicion. Given China’s authoritarian
political system, one could very well imagine a situation of government
resistance to such an intrusive thing as the World Wide Web, and indeed,
the first thing that comes to mind to foreigners when thinking about China
and the Internet is the ‘Great Firewall of China’, the huge censorship
apparatus that blocks unwanted content from Chinese netizens. Yet,
contrary to Western conventional wisdom, China is one of the most
connected societies in the world, with over one billion netizens, some 1.6
billion mobile phones, and a highly advanced e-commerce system, of which
the Hangzhou-based company Alibaba, China’s Amazon, as it were, is
Exhibit A. China’s advanced digital technology was in fact key to allow the
country to control the Covid-19 pandemic, through sophisticated messaging
systems connected to individual mobile phones, making it possible to keep
mortality rates much lower than elsewhere. Yet, and such are often the
unforeseen consequences of technological breakthroughs, the very systems
that were so helpful during the pandemic are now being used to exercise
control over people’s lives. According to some, the tools that made it
possible to monitor the whereabouts of patients infected with the corona
virus are now being deployed to monitor the whereabouts of those the
government considers to be dissidents, hampering their movements and
daily lives (The New York Times, 2022).

Digitalization and the International Political Economy

The increased use of digital tools and digital products is one of the
hallmarks of the current phase of globalization that started circa 1980,
driven largely by IT and telecommunication technologies. These tools have
brought more economic growth and development, facilitating access to
many things not previously available to vast swathes of the world’s
population, from education to banking to telemedicine. As Rebolledo (202
1) has pointed out, there are six factors that are key for the emergence of the
digital economy:
a) Business infrastructure
b) E-business
c) E-commerce
d) Broadband Internet infrastructure
e) ICT apps industry
f) Final users

The digital frontier has been at the cutting edge of innovation and the rise
of new products, like e-books, videogames, music, movies, and software,
that can be conveyed electronically and that are at the core of the New
Economy. In terms of international trade, though there has been a slowdown
in the growth rate of global trade in goods, that has not been the case in
services, and especially so in digital services, which now comprise 50% of
the latter.
Thus, the issue of the rules that govern such a crucial sector of the world
economy is key. And it is here that the very different approaches of the
United States, in broad alliance with other countries from the Global North
(especially the ‘Five Eyes’ group), and that of China, spearheading a loose
coalition of countries from the Global South (particularly the BRICS
countries), stand in stark contrast.

Multistakeholderism Versus Multilateralism

In this context, the battle lines have been drawn between two very different
approaches on how to run the World Wide Web. On the one hand, the
United States espouses the current multistakeholder system based on the
participation of a variety of players, including business, consumer, and
government representatives. This is done in the name of a supposedly
neutral, objective mechanism that respects the rights and interests of all (Ho
fmann, 2016). On the other hand, China champions a shift towards a
multilateral regulatory system akin to that of other global issue areas such
as trade, which falls under the purview of the World Trade Organization
(WTO) (Liu, 2012). Sometimes this is portrayed as a conflict between a
liberal versus a state-centred approach to Internet governance. In practice,
the issue is murkier. As discussed above, ‘multistakeholderism’ stands for a
key role played in regulating the Internet by the US Department of
Commerce, i.e., the US government. In turn, not just China but also Russia
and countries like India, who espouse multilateral Internet governance, take
an especially heavy-handed approach to Internet control within their own
borders, raising doubts about the kind of regulation they have in mind when
they advocate for changes in the current system.
This battle is not just being waged at the level of discourse. Much as the
United States reaped the early advantages of having conceived and
implemented the World Wide Web, things on the ground are changing, this
time to the advantage of ‘the Rest’. A majority of Internet users are now in
the Global South, and it is to them that many of the Big Tech companies
cater. The material infrastructure of the Internet, including the all-important
submarine fibre optic cables that transmit 99% of Internet traffic, is also
increasingly being built by and in the hands of non-Western companies,
mostly but not exclusively Chinese, like China Mobile, China Telecom, and
China Unicom (Winseck, 2017). Many of them are state-owned, but some
of them are private companies (like Tata, the Indian concern), underlining
the complex interface between the state and capital that shapes the political
economy of the Internet on both sides of the North–South divide.
In turn, many of the new Internet submarine cables are being built in the
Asia-Pacific region, whereas no new fibre optic cables have been built
across the North Atlantic since 2003. Moreover, much of the technological
advantage that the United States enjoyed in the telecommunications field
has eroded. In the critical area of 5G (fifth generation telecom technology),
a key tool for the Internet of things, for AI, and for a much faster
connectivity, the undisputed leader is the Chinese company Huawei,
followed by two European companies, Erikson and Nokia, and Korea’s
Samsung. No US company has 5G technology. This leads us to the
emerging global battle royale between the United States and Huawei. The
latter epitomizes in many ways the ongoing struggle to shape the world’s
digital landscape, especially in the Global South.

Huawei, the United States, and the Battle for 5G

The December 2018 arrest in Vancouver airport of Ms Meng Wanzhou,

CFO of Huawei, by the Canadian police, in response to a US request for
alleged violations of US legal provisions on export controls, took
Washington’s offensive against the Chinese telecom company to a new
level (Tang, 2020). To detain the daughter of Huawei’s founder and owner,
Ren Zhengfei, had high symbolic value and led to a worldwide drop in
stock markets. Although it is perfectly possible that Huawei, which sells
telecom equipment to Iran and which utilizes components from US
companies like Intel and Qualcomm, might have violated some US laws
against such sales, the standard manner to deal with such violations is via
fines, and not by going after company executives, something rarely done by
US justice. To criminalize international trade matters leads to a dangerous
escalation. Moreover, according to the extradition treaty between the US
and Canada, for extradition to proceed the crime in question needs to be
specified in both countries’ legislation. The treaty also states that if the
matter at hand is politically motivated, the extradition may be denied.
Yet Meng, although released from custody, was confined to home arrest
in Vancouver for three years, wreaking havoc in the Canada–China
relationship, and casting a shadow over US–China links for this whole
period. Only at the end of 2021 was she finally released and allowed to go
home to China. Why did Washington go to such lengths to humiliate
Huawei, perhaps China’s foremost national champion?
The reason is simple. With a presence in 170 countries and sales of US
$123 billion in 2019, Huawei is a behemoth to contend with, operating as a
carrier in the enterprise sector and in consumer products. Established in
1987, and headquartered in Shenzhen, it made its reputation initially in the
building of telecom infrastructure, before moving into the more glamorous
area of consumer products like mobile phones and laptops. Today, however,
its largest claim to fame lies in the pioneering role it plays in the
development and deployment of 5G telecom technology, the product of its
major investments in R&D over the years (its R&D spending was $18.65
billion in 2019), as well as of its early bet on this technology (Tang, 2020).
As mentioned above, 5G is critical for the most cutting-edge economic
activities of the present and the future, and Huawei is in pole position to
make the most of it. The United States, in turn, is determined to stop it from
doing so. Over the years, Huawei faced many obstacles in developing its
business activities in the United States, and has prioritized other markets,
including Europe, Africa, the Middle East, the Asia-Pacific, and Latin
America. It is thus well-positioned to play a key role in the next phase of
digitalizing the world economy. To prevent this, Washington has exerted
pressure on countries across the world to block Huawei technology. Yet, it
has faced pushback in doing so, even from close allies like the United
Kingdom, as Washington’s request for ‘clean’ (meaning no Huawei or other
Chinese technology) national telecom grids would mean, in many cases,
taking out vast amounts of existing equipment and replacing it with more
expensive and less reliable versions, hardly an attractive business
proposition. And while some rich countries in the Anglosphere (like
Australia, Canada, and New Zealand) have given in to US pressure (in the
case of Australia, honouring a long-standing foreign policy tradition, it
actually volunteered to do so), for the overwhelming majority of countries
around the world, and especially in those of the Global South, this has not
been the case.
Latin America is one area where this offensive against Chinese telecom
companies has played itself out with special brio, with Brazil, Chile, and
Ecuador being singled out by the United States in a variety of instances. A
good example of that is the $3.5 billion loan offered by the International
Development Financial Corporation (IDFC), a US government agency, to
Ecuador in January 2021. In the initial stages of the pandemic, Ecuador was
ground zero of the Covid-19 pandemic in the region, with corpses piling up
on the streets of Guayaquil; with the drop in oil prices, the country also
faced foreign debt problems. Taking advantage of the situation, the Trump
administration took the much-criticized conditionality of Western IFIs to
new heights. The loan came with two conditions. The first was that Ecuador
would commit to exclude any type of Chinese technology from its
telecommunications grid. The second, that the country should privatize
public sector assets for an amount equivalent to that of the loan. These
assets were to be determined not by the government of Ecuador, but jointly
by Ecuador and the IDFC. According to Adam Boehler, the outgoing
executive director of the IDFC, this would be an ‘innovative model’ to
expel China from Latin America, something that he had discussed with
incoming President Biden’s transition team, which had considered it to be
‘an interesting and innovative approach’ (Gallagher and Heine, 2021).
There is much that is wrong with this ‘innovative model’. It means
sacrificing Latin American development prospects and technological
progress to further US policy objectives in its conflict with China. The
United States is not even promoting its own 5G technology (which it does
not have), or that of its own telecom companies, but simply blocking the
access of Chinese companies to the region, and, in so doing, slowing the
growth and development of a small Latin American country in trouble.
Along the same lines, the main purpose of a visit by Secretary of State Mike
Pompeo to Chile in April 2019 was to block the building of an Internet,
trans-Pacific cable from Valparaiso to Shanghai, which had been proposed
by the Chilean government to China in 2016, on which a bilateral MOU had
been signed, and for which a pre-feasibility study had been undertaken (Em
ol, 2019). Although this would have been the first Internet cable across the
South Pacific, and would have made Chile into China’s digital gateway into
South America, the Piñera government caved in to Washington’s pressure
and scuttled the project. Yet, a measure of the limits of this US diplomatic
offensive against the digitalization of South America can be gleaned from
the fact that a similar visit by US authorities, this time in August 2021, to
Brazil by National Security Advisor Jake Sullivan, to press Brazil to
exclude Huawei from participating in the country’s upcoming 5G tender,
offering in exchange a vaguely defined associate membership in NATO,
failed to achieve its objectives, despite the pro-US stance of President
Bolsonaro’s government (Reuters, 2021a).
As US–China diplomatic tensions play themselves out on the digital
frontier across the Global South, the irony is obvious. For the past few
decades, Northern telecom companies largely neglected Asia, Africa, and
Latin America, to focus on what were considered to be the more profitable
markets of Europe and North America, while companies like Huawei
positioned themselves in the developing world. And then, just at the time
when 5G technology comes to the fore as a key driver of progress and
innovation, and Huawei is poised to play a leading role in furthering it, the
United States attempts to bar developing countries from building up their
digital infrastructure, adducing all sorts of unfounded claims about
supposed ‘back-doors’ in Chinese equipment that it cannot back up. In the
midst of the digital age, as Chinese companies step in to provide the
connectivity these countries so badly need, US policy deploys a worldwide
offensive to block such endeavours. Brazil’s refusal to play along with such
attempts (by the most pro-US government in Brazilian history), shows the
limits of such a counterintuitive approach to digital development in the
Global South. This takes us to Brazil’s initiatives for limiting electronic
espionage, another salient issue area in the North–South digital agenda.

Regulating Electronic Espionage

As mentioned above, in addition to the uproar caused by the NSA’s mass

surveillance activities through programmes such as PRISM revealed by
Edward Snowden in 2013, few revelations caused as much impact as the
ones about the wiretapping of the personal mobile phones of Brazilian
President Dilma Rousseff and German Chancellor Angela Merkel. The
notion that, in peacetime, US intelligence agencies would regularly listen in
to what the leaders of ostensibly friendly countries had to say struck many
as taking intrusiveness and privacy violations to the limit.
Shortly after cancelling a presidential state visit to the US in the wake of
these revelations, the Brazilian government led by Dilma Rousseff
presented to the United Nations General Assembly (UNGA) an initiative
designed to curb electronic espionage (Rousseff, 2013). Rather than
submitting it as a discrete, bounded issue, the matter was framed as one
related to the failings of the current system of Internet governance.
According to the Brazilian proposal, the issue of electronic espionage, far
from being strictly limited to the security arena, impinges directly on
human rights and development, constituting a serious human rights
violation (Abdenur and Gama, 2015).
Brazil’s take on the matter reveals in many ways the limitations of
international law and of Internet governance on the subject. While
electronic spying is strictly regulated by domestic legislation, international
law remains silent on it. And while such espionage existed long before the
invention of the Internet, the latter has exponentially increased its reach and
ambit. Brazil’s argument, thus, was that Internet governance reform, i.e.
moving away from the current multistakeholder model represented by
ICANN to a multilateral model akin to other UN bodies, was the best way
to deal with this thorny question. Not surprisingly, the United States
strongly opposed any such notion, a matter on which the US Congress had
earlier pronounced itself as well (US Senate and Congress, 2011–2012).
The same goes for other members of the Anglosphere, like Australia,
Canada, New Zealand and the United Kingdom (all part of the ‘Five Eyes’
intelligence-sharing group), which were part of the exercise in the first
place. Still the fact that a leading NATO member like Germany actively
cooperated with Brazil on this initiative, and parted ways with Washington
on it, shows the degree to which Brasilia’s point struck a chord that went
beyond the North–South divide, and appealed to a broader constituency.
In many ways, this showed Brazilian diplomacy at its best. Embracing a
salient issue with considerable emotional and media appeal; taking it in a
timely manner to the world’s leading multilateral body; addressing it from
the ultimate bully pulpit (the opening speech at that year’s UNGA); and
following up on it with a proposed UNGA resolution on the subject that
was approved without a vote, all reflected diplomatic dexterity and savoir
faire. On the other hand, such resolutions are non-binding, and ultimately
nothing happened. Internet governance continues to be ruled by ICANN,
and international electronic espionage remains unfettered, with no prospects
of any curbs on it anytime soon. That said, there is no reason to think we
have seen the last of such initiatives. Brazil’s ability to build widespread
support for a UN resolution expressing concern about the current state of
Internet governance and its deleterious effects on the right to privacy and
human rights more generally indicates how fragile the support for the
current system is, and how vulnerable it remains to future projects aimed at
democratizing Internet governance. The BRICS group, with its significant
economic and demographic weight, may hold the key to any future such
changes.

Digital Economy Partnership Agreement (DEPA) as the Way

Forward?

Yet, there may also be other ways through which progress on the North–
South digital agenda may be made, an incrementalist rather than a Big-
Bang approach to finding common ground on digital issues. An inkling of
that may be provided by the DEPA. The latter is an agreement signed by
Chile, New Zealand, and Singapore in 2020, whose purpose is to set rules
that promote the digital economy, provide a suitable regulatory framework
for it, and facilitate the export of digital services and products (Rebolledo, 2
021).
On the face of it, any such agreement signed by three small economies
should be of marginal interest. Yet, the fact that DEPA is the first
international economic agreement signed exclusively on digital matters
gives it a special significance, as does the fact that its members hail from
three different regions, Latin America, Australasia, and Asia. It was this
very same three countries that established the P-3 in 2002 to give a greater
impetus to trans-Pacific free trade, which later, with the incorporation of
Brunei Daressalam, gave rise to the P-4, and eventually to the Trans-Pacific
Partnership (TPP).
At a time when digital trade is growing in leaps and bounds, and the
volume of the digital economy as a share of global GDP varies between 4.5
and 15.5%, with the export of digital services reaching as much as half of
all service exports, this is especially significant (Rebolledo, 2021). As a
result of the Covid-19 pandemic, digital exchanges have received an
additional boost. In the midst of the economic recession caused by the
pandemic in 2020, relying on digital tools for educational, health, logistics,
and governmental services purposes has become critical. The public policy
challenges in terms of digital infrastructure and communications (as
mentioned earlier in this chapter); the upgrading of government agencies
and their adaptation to the digital age; and the training of personnel to deal
with the new technologies, are all key tasks for developing nations, in most
of which the digital divide is only too apparent.
New subjects that have come to the fore in this new digital environment
include tariffs on digital products; online consumer protection; paperless
commerce; non-discriminatory treatment of digital products; electronic
authentication and digital signatures; the protection of personal information;
and how to deal with spam. DEPA aims to provide a further impetus to
digital exchanges and the digital economy more generally by pushing for
the non-discriminatory treatment of digital products, against the forced
localization of servers and the free trans-border flow of data (International
Economy Reports, 2017). It aims to act as a catalyst for other entities to act
along the same lines.
DEPA responds very much to the needs and priorities of small, open
economies, keen to foster greater trans-Pacific trade flows in the digital
realm. Yet, as a measure of the role small powers can play in agenda-setting
and in breaking through negotiation logjams, in November 2021, much to
everyone’s surprise, China formally asked to join DEPA (South China Morn
ing Post, 2021). This, in turn, followed an earlier formal request by China
to initiate the accession mechanisms to the Comprehensive and Progressive
Transpacific Partnership (CPTPP) (Reuters, 2021b). At a time when the
United States is reluctant to sign any international trade agreements, digital
or otherwise, this gives China a leg up in the economic competition with the
US in the Asia-Pacific region, one that had already been bolstered by the
US ditching of the TPP in January of 2017, and the signing of the Regional
Comprehensive Economic Partnership (RCEP) in November of 2020, a
fifteen-member agreement among Asian and Australasian economies,
which includes China, and is nowadays the biggest regional trade
agreement anywhere.
Many observers opine that China’s model of state capitalism would have
considerable difficulties in meeting the requirements of DEPA and of the
CPTPP. Nonetheless, China’s formal request to join these agreements
allows China to stand up as a champion of trans-Pacific free trade, as well
as of boosting the international digital economy, at a time when
protectionism and anti-globalization banners have become common in
North America and Europe.

Conclusion

As the global order shifts from the US-led, unipolar moment of the post-
Cold War era to a multiplex order (Acharya, 2018) in which power is much
more diffuse, a shift that overlaps with the rise of not just a digital economy
but a digital society, we are thus faced with a paradox. Although the
Internet, the web of webs, is at the very centre of this extraordinary
revolution, one to which half of humankind is connected, the Internet is not
under any kind of international control, but still in the hands of one country,
the United States. So far, attempts, like Brazil’s, to democratize Internet
governance have failed to make any headway.
That said, the rise of emerging powers, like the BRICS countries, and
their growing embrace of the Internet and of digital tools is shifting the
balance to a greater role of the Global South in digital connectivity. This is
especially apparent in what we might call the ‘hardware’ of the Internet,
including the submarine, fibre optic cables that convey 99% of electronic
communications. The role of Chinese companies in the laying of these
cables, mostly in the Asia-Pacific but also elsewhere, is particularly
noteworthy. A key component of China’s signature foreign policy project,
the Belt and Road Initiative (BRI), a development proposal to countries in
Africa, Asia, and Latin America, is that of digital connectivity, a decisive
factor for economic progress in today’s world (Hillman, 2021). The fact that
the Chinese private company, Huawei, holds the lead in 5G
telecommunications technology, and enjoys a long-standing presence across
170 countries, mostly in the developing world, puts it in pole position to
contribute to their digitalization. US efforts to thwart this have largely
failed.
Yet, the unexpected ways in which the diplomatic digital agenda cuts
across the North–South divide is reflected in the signing of the DEPA of
three small countries in the Asia-Pacific, Chile, New Zealand, and
Singapore. To promote the digital economy and both liberalize and facilitate
trade of digital products, they have committed to a variety of ways to make
this happen.
As the US–China trade war turns into a tech war, and then into what
some have referred to as a Second Cold War, there is little doubt that the
battle over who will control the digital frontier will continue to hold sway.
In this, there is much at stake for the Global South, and the future of many
countries in Africa, Asia, and Latin America will depend on how their
foreign policy makers and diplomats navigate these perilous waters.

Suggested Reading
Abdenur, A. and Gama, C.F. (2015). “Triggering the norms cascade: Brazil’s initiatives for curbing
electronic espionage”, Global Governance 21, 3.
Broeders, D. (2015). The public Core of the Internet: An International Agenda for Internet
Governance. Amsterdam: Amsterdam University Press.
Riordan, Shaun (2018). “The geopolitics of cyberspace: A diplomatic perspective”, Diplomacy and
Foreign Policy 3:3, 3.
Stuenkel, O. (2016). Post Western World: How Emerging Powers Are Remaking Global Order.
Cambridge: Polity Press.
Tang, M. (2020). “Huawei versus the United States? The geopolitics of extraterritorial internet
infrastructure”, International Journal of Communication 14, 4556–4577.

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