For a healthy economy, a government needs to ensure that its country's businesses and consumers have access to the most suitable products from around the world; likewise, it needs to ensure market access for companies and individuals to sell their own products abroad. Governments must therefore accord each other's persons market access in the electronic realm.

Foreign Commercial Relations in Traditional Terms

Government has historically inserted itself into relations between persons in its territory and persons or governments elsewhere - particularly commercial relations, where a government claims to be looking after the economic and security interests of the area it governs. Typical intervention includes ensuring market access for exports, protecting domestic competition from imports, and collecting revenue in the form of customs duties/tariffs. Countries sometimes agree to accord each other market access, for example by committing to admit imports or by lowering tariffs.

Challenges for Foreign Commercial Relations in Cyberspace

The Net poses challenges for governments as they wrestle to figure out how existing market access commitments apply in the electronic realm. This medium can be viewed as turning market access on its head: Instead of the traditional dynamic of governments' taking down barriers to trade, products traded electronically can now stream across borders relatively undetected. With this effective opening for imports, governments must adjust to losses in tariff revenue and to new competition facing domestic suppliers; to alleviate these pressures, they must emphasize the potential of exports while finding the right balance in redistributing gains derived from e-commerce.

International Cooperation to Address These Challenges

In this confusion, one thing is clear: If a government wants to look after its citizens' economic interests, it must work with other governments to guard against trade wars and pave the way for secure exchanges.

While global e-commerce brings economic gains, it also demands a framework of strong international institutions to support it. As such, foreign commercial relations in the electronic realm must be recognized as spurring international Net governance.