ICs and allies push for new mandate on e-commerce

Despite continued opposition from many developing countries, proponents are persisting in their drive to initiate negotiations on e-commerce at the WTO.

by D. Ravi Kanth

GENEVA: Major developed countries and their allies in the developing world have upped the ante for launching negotiations on electronic commerce at the WTO’s ministerial meeting in Buenos Aires. They have issued a fresh call for pursuing negotiations under a new mandate as opposed to the 1998 e-commerce work programme, trade envoys told the South-North Development Monitor (SUNS).

Despite massive opposition from developing and the poorest countries to switching gears on e-commerce discussions from the 1998 work programme, a group of developed countries along with their allies in the developing world have circulated a revised proposal on “advancing work on the e-commerce work programme.”

“Focused” work programme

In the two-page proposal circulated on 22 September, the sponsors – Canada, Australia, New Zealand, Switzerland, Korea, Singapore, Malaysia, Hong Kong (China), Chinese Taipei, Laos, Myanmar, Moldova, Colombia, Panama, Qatar and Nigeria, among others – demanded a more “focused” work programme to replace the 1998 work programme.

The sponsors argued that members have already expressed their views “on a vast range of issues including, inter alia, infrastructure needs, facilitating regulatory framework, transparency, trade facilitation, electronic signatures and authentication, paperless trade, consumer protection, data flows, electronic payments, and sharing of regional experiences.”

While some discussions took place at the dedicated discussions in 2016, most of the discussions took place in the four regular bodies in the work programme, viz., the WTO Council for Trade in Goods, Council for Trade in Services, TRIPS Council and Committee on Trade and Development, they said.

The recent discussions, according to the sponsors, brought to the fore “the inherent cross-cutting nature of e-commerce.”

However, “the siloed nature of the discussions in the respective bodies also makes it difficult to have a holistic understanding of the various e-commerce issues”, the sponsors maintained.

“For example,” the sponsors said, “development issues often overlapped with the conversations under goods, services, and IP [intellectual property], and goods and services issues were often interlinked (e.g. enabling services for trade in goods enabled by the internet, relevance of e-signatures for trade facilitation and also cross-border supply of services).”

Therefore, “compartmentalized conversations make it hard to recognize synergies, and hence to make recommendations for a way forward”, the sponsors claimed.

Further, the WTO General Council is not a technical forum to discuss the inter-linkages “between the issues or delve into any in-depth conversation on e-commerce”, the sponsors argued.

“The current mechanism of the Dedicated Discussion also remains an informal arrangement, and makes knowledge management challenging as there are no formal records of the meeting,” they argued.

Although the 1998 work programme “sets out the programme of work for the four relevant bodies, with a view towards having these bodies make recommendations to the Ministerial Conference for action”, and useful work has been done under that mandate, there has been “limited progress in making recommendations despite nearly 20 years of discussions at the WTO.”

“Given that e-commerce is increasingly becoming an important driver of inclusive economic development, it would be useful to have more clarity on how to advance work, how the current process can be improved, what issues to focus on, and how to facilitate Members arriving on concrete recommendations on the way forward,” the sponsors said.

Against this backdrop, the sponsors proposed a “next step from now to MC11” under which members must embark on a discussion on “how the E-commerce Work Programme could better facilitate more focused work and holistic discussions on e-commerce.”

The sponsors want members to “reflect and build on the discussions since MC10, and identify possible (i) improvements to processes, and (ii) issues of interest, if any that they would like to take forward. This could be done on the basis of Members’ proposals and ideas.”

Although the sponsors maintained that their proposed next step “would not alter the underlying exploratory nature of the Work Programme”, they suggested that “the outcome of these discussions should be captured in the MC11 Ministerial Decision on E-commerce.”

Further, “Ministers at MC11 should give clear direction for future work in e-commerce, with development at the core, and set out a clear, updated framework/process through which future work could be undertaken”, the sponsors said.

Digital divide

Effectively, the sponsors are calling for launching negotiations on e-commerce at the Buenos Aires meeting, said a trade envoy familiar with the proposal.

But a large majority of developing and poorest countries have repeatedly maintained that the discussions in various WTO bodies under the 1998 e-commerce work programme – which are exploratory in nature – have not clarified a range of issues about the grotesque disparities in the e-commerce infrastructure between countries as well as the digital divide.

India along with countries in the African Group and South American members have repeatedly argued that issues concerning the development of e-commerce infrastructure cannot be addressed through the e-commerce rules proposed by the developed countries and their allies in the developing world.

Uganda, for example, has presented credible arguments as to why members cannot move from the 1998 work programme.

In an intervention on 26 July, Uganda said e-commerce, “in theory, provides a critical gateway for consumers and businesses in weaker countries allowing them to surmount obstacles faced when competing domestically, and with enterprises in stronger players, in the trading system.”

However, “in reality, most LDCs [least-developed countries] face a number of constraints due to insufficient basic infrastructure and access to electricity, Internet, high cost of broadband connectivity, amongst others, and bottlenecks that hinder LDCs from taking advantage of opportunities theoretically available through the e-commerce platforms.”

More important, e-commerce needs “connectivity, without which it would be a clear case of putting the cart before the horse”, Uganda said.

“In Africa, for instance, 75% of the entire population is not on the Internet and while more than 50% of the population in LDCs is covered by a mobile broadband signal, only 15% use the Internet.”

“In terms of individuals using the Internet, only 15.2% in LDCs use the Internet, as opposed to 82.1% in the developed world,” Uganda said.

In terms of households with Internet use, the figures suggest that 11.1% in LDCs use the Internet against 83.8% in the developed world.

“The digital divide is huge and there is therefore need to bridge it,” Uganda said.

Therefore, the claimed benefits “are not self-imposing nor are they automatic ... countries have to undertake deliberate measures with the view to ensure and guarantee that there is a trickle down effect of these benefits to the masses and enable catch up.”

Uganda and other African countries want first the huge digital divide between developed, developing and least-developed countries to be addressed on a war footing. “If this is not addressed, it will create even bigger future divides, i.e., income, workforce skills, infrastructural, etc. between those who have, and those who do not. In other words, inequality will increase and most of Africa will be left behind because multilateral rules will entrench these imbalances,” Uganda had argued.

More disturbingly, argued Uganda, “the existing global e-commerce space is extremely asymmetrical and the gains are not shared equitably.”

The African Group and Uganda now face a litmus test of whether they can ultimately stand up to the assault of the industrialized countries and their allies in the developing world, and ensure that there is no launch of e-commerce negotiations at Buenos Aires, said a trade envoy who asked not to be quoted. (SUNS8540)                                            

Third World Economics, Issue No. 647, 16-31 August 2017, pp7-8