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THIRD WORLD ECONOMICS

Friends of E-Commerce lay out roadmap for WTO talks

A group of WTO member states calling themselves the Friends of E-Commerce for Development are pushing for discussions on electronic commerce at the trade body.

by Kanaga Raja

GENEVA: The Group of Friends of E-Commerce for Development (FED) at the WTO has put forward a roadmap of seven key issues relating to electronic commerce aimed at paving the way for conversations to be held on this issue in Geneva as well as at the WTO’s eleventh Ministerial Conference (MC11), to be held in Buenos Aires this December.

The roadmap was presented at the first ministerial meeting of the FED, which was held here on 25 April on the sidelines of the UN Conference on Trade and Development (UNCTAD)’s E-Commerce Week.

The FED group currently comprises Argentina, Chile, Colombia, Costa Rica, Kenya, Mexico, Nigeria, Pakistan, Sri Lanka and Uruguay.

At a media briefing here on 25 April, Susana Malcorra, Foreign Affairs Minister of Argentina, the host of MC11, said that it was a pleasure to join her colleagues to discuss what she thought were topical matters of trade, e-commerce and, for Argentina in particular, the organization of MC11.

“I am sure my colleagues [at the media briefing] will go deep into the questions of e-commerce, e-trade that are at the centre of the discussions this week. I can only say it is clear that if we do not find a way to embrace these issues at the centre of what we are discussing as part of the WTO, we are going to miss the boat on what is without any doubt one of the biggest opportunities we have to bridge the gap between the ones who have and the ones who have not.”

Referring to the upcoming MC11, she expressed hope that “we can deliver something that is up to the task.”

On the substance, she said that “we have already a lot of work in progress, but let’s be honest, we are hosting this meeting in the middle of the discussion in the world about globalization, about free and fair trade.”

“So beyond the normal track that our ambassadors here are pursuing with commitment and strength, I think we have a bigger discussion before us, which is does the WTO have a future or do we prepare the WTO of the future?

“I really believe that we have to ensure the future of the WTO by preparing the WTO for the future. And nothing is more critical for that than precisely the questions around e-commerce which so far have a limited mandate within the WTO which is already 20 years old.

“And we believe that one of the issues that should come out of our work in Buenos Aires is a new mandate that allows [us] to engage and embrace the issue with an understanding of what are the demands of this day and age.”

Bypassed

Also at the media briefing, Pakistan’s Commerce Minister Khurram Dastgir Khan said that e-commerce has “simply passed us by” while negotiations were ongoing in the WTO on agriculture market access, non-agriculture market access and services for the last 20 years.

He said that e-commerce has now grown at triple the rate of global economic growth. That is the reason, he added, that the FED want to bring e-commerce eventually onto the agenda of the WTO, but with a specific angle of development and inclusiveness. “The framework we are launching today is a very initial foray into having a global idea of where we would like the WTO to go ...”

He highlighted issues such as e-commerce readiness and strategy, ICT (information and communications technology) infrastructure and services, trade logistics, payment solutions, legal and regulatory frameworks, e-commerce skills development and technical assistance, and access to financing. These, he said, are all issues that developing countries lack – some more, some less.

Okechukwu Enelamah, Nigerian Minister of Industry, Trade and Investment, said that “we must engage, we must be part of the engagement, we must think in terms of solutions.”

“Yes, there is a digital divide, yes, there is an e-commerce divide, but there is also no question whatsoever that the best way to respond is to be proactive in trying to solve the problems and trying to bring about solutions,” he said. “That is why I am so excited that this initiative is taking place at a time like this.”

Asked what would be the role of a WTO agreement on e-commerce in making sure that developing countries get a fair deal, Pakistani Minister Khan said that the issue is the ability to participate.

“We are told that by the end of the year, half the world’s population will be online. In the developed world 80% are now online. The figure in the developing world is 40%, in LDCs [least-developed countries] it is 15%. In many African countries, only one in 10 persons is on the Internet.”

The offline population in the developing countries are mostly poor, female, elderly, less educated and living in rural areas, he pointed out.

“[W]hat is now clear to us is that not only [do] we want to talk about e-commerce [in terms of] facilitat[ing] or provid[ing] access to the poor and rural populations, it [can] in a very real sense ... act as a bulwark or as a resisting wall against the negative effects of globalization,” he said.

The idea is that the developing countries should have a voice in how the cyberspace of commerce and trade is going to be governed. As of today, e-commerce is not on the agenda of the WTO. “We don’t discuss it there. There is great resistance at the WTO to discuss[ing] e-commerce,” he said.

The participants in the media briefing were asked about the credibility of the FED initiative that they were launching, in view of there being a large group of WTO members which can also be called the “Fed Up with e-commerce” group that thinks that the FED are essentially abdicating the real issues such as rules of origin (which has awaited resolution in the WTO since 1998) and the digital divide being faced in Africa.

The LDCs, for example, want the bread-and-butter issues, such as rules of origin, agriculture and other areas that have been the core part of the Doha agenda, to be addressed. What would be the credibility that the FED would have when the large majority of WTO members still want the existing issues to be resolved, the participants were asked.

Nigerian Minister Enelamah said that the first principle of negotiations is that when you want to get things done you have to put more issues on the table, rather than less, so that you create an atmosphere where agreement can be reached.

Closely related to that principle, he said, is that if you are trying a method and it is not working, and you keep doing it, you can reasonably expect that it will still not work.

He further said that not to embrace some of the imagined trends that are important for the 21st century would be insufficient. As important as agriculture is, as important as electricity is, and as important as all those things are, technology and the digital economy now have to be added.

“You just have to treat it with the same respect, because if you don’t, you will suffer a second loss,” he said.

Khan said that this is “absolutely not a zero-sum game. It doesn’t mean at all that if you are talking about e-commerce we’re in any way lessening our commitment to a multilateral forum where we negotiate trade issues.”

“But I would submit very humbly a speculation that we can no longer now say, sitting in the 18th year of the new century, that digital is one part of the economy. It is going to become the economy.

“The challenge in front of us is that eventually all member countries will not only have to look upon their trade policy, they will also look at their customs policy, their taxation policy, how they tax their own citizens, how they tax their companies, and of course the issue of the very real possibility, which in some form is already happening today, of very large-scale [trade] transactions happening electronically.

“The reason we are gathered is, let’s not wait for that moment when it overwhelms us. And let’s not wait for the moment when there is again a real possibility that these large [e-commerce] companies that exist now lock in rules, lock in certain procedures – not by any nefarious design, but just step by step how they move across the world, how they invest in different countries.

“So our view is that ... as [a] global rule-making body, [we] should begin to discuss this now, today,” said Khan.

The FED roadmap

The roadmap put forward by the FED highlights seven issues, namely, e-commerce readiness and strategy, ICT infrastructure and services, trade logistics, payment solutions, legal and regulatory frameworks, e-commerce skills development and technical assistance, and access to financing.

On e-commerce readiness and strategy, in addition to national assessments to identify strengths and weaknesses in e-commerce readiness, the FED will identify actions that countries can take in their own interest and at their own initiative in the context of international trade rules to improve the overarching legal and regulatory framework for e-commerce.

“We support expansion of UNCTAD’s e-T.Ready programme, currently available only to LDCs, to all developing countries so they may benefit from it. We call upon the partners in eTrade for All to ensure they allocate adequate resources to programmes that support the priorities herein so that developing countries can maximize their ability to benefit from the potential of e-commerce and, where necessary, to allocate additional resources as relevant.”

On ICT infrastructure and services, the FED said bridging the digital divide is an objective of the Sustainable Development Goals and affirmed that trade policy must support reaching Goals 9(c) and 17.11 in this regard.

The FED will explore how the multilateral trading system can provide a framework to achieve these objectives through, inter alia, effective competition and regulation, especially in services central to e-commerce like basic and value-added telecommunications, computer and related services, and relevant distribution services.

The FED also support investigation into trade policy-related barriers that may exist to the flow of goods integral to bridging the digital divide, inter alia, ICT hardware and software in relevant classifications.

On trade logistics, the FED said since effective and competitive movement of goods in national and international trade is vital for reducing e-commerce friction and enhancing competitiveness, especially for developing-country micro, small and medium-sized enterprises (MSMEs), the FED will promote identifying a framework of trade rules and commitments to promote effective transportation and logistics and cross-border trade facilitation measures in order to advance goods-related e-commerce for development.

“The Trade Facilitation Agreement’s implementation is a key foundational element that trade policy has for delivering improvements in this area. Ensuring rapid, widespread implementation of it, especially for and by developing countries, is a shared priority.”

On payment solutions, the FED said that because e-payment systems are crucial to taking advantage of new possibilities for consumers and corporate buyers and sellers, and are central to meeting national targets for financial inclusion, the FED will identify trade policies and commitments that help transition away from a reliance on cash and facilitate access to e-commerce and financial services for all citizens of developing and least developed countries.

On legal and regulatory frameworks, in order for e-commerce to be fully supportive of economic development, the FED will promote security, trust and certainty for consumers and businesses alike, both within their countries and across borders.

“We will help identify key legal and regulatory steps to promote this underlying environment for consumer protection, data protection, secure cross-border data transfers, open platforms to facilitate trade, the prevention of cybercrime, and other relevant issues.”

The FED will work towards the reduction of artificial and burdensome regulatory barriers to e-commerce.

On e-commerce skills development and technical assistance, the FED will promote efforts to expand capacities and technical skills of enterprises, individuals and policymakers to harness e-commerce, with a particular focus on removing barriers that inhibit SMEs from engaging in and benefiting from e-commerce.

On access to financing, the FED called on all international development partners, including the relevant institutions engaged in eTrade for All, to develop reliable financing solutions for early-stage start-ups and growth-oriented businesses in the e-commerce ecosystem in order to facilitate the growth of e-commerce and entrepreneurship at all points across the e-commerce value chain in developing countries. (SUNS8451)                                         

Third World Economics, Issue No. 637, 16-31 March 2017, pp7-9 


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