TWN Info Service on WTO and Trade Issues (Mar17/06)
3 March 2017
Third World Network

WTO secretariat pushing e-commerce and investment for G20 meet
Published in SUNS #8409 dated 24 February 2017

Geneva, 23 Feb (D. Ravi Kanth) -- The World Trade Organization Secretariat is aggressively promoting and lobbying for negotiations in "electronic commerce (e-commerce)" and "investment trade facilitation" at the G20 Berlin meeting later this year, despite massive opposition from developing and least-developed countries, according to discussion papers reviewed by SUNS.

Developing and least-developed countries from Africa (except Nigeria and Egypt), and many countries from Asia and South America have categorically rejected negotiations in e-commerce and investment facilitation without concluding negotiations on the outstanding Doha issues.

The developing and least-developed countries have time and time again insisted on adhering to the e-commerce work program of 1998 which involves detailed examination of all issues concerning e-commerce in all the WTO bodies.

Members of the African Union have repeatedly maintained that they are not in a position to address e-commerce at a time when they are utterly disadvantaged due to infrastructure and digital constraints, according to several trade envoys familiar with the effort to start e-commerce negotiations.

Despite intense opposition from members on e-commerce as well as investment facilitation, the WTO Secretariat has taken on itself to push for the negotiations by painting a positive and receptive approach to e-commerce.

Ahead of the technical-level meetings of the G20 sherpas in the first week of March in Berlin, the WTO Secretariat has circulated two papers - "E-commerce, WTO Rules and Regional Trade Agreements," including a power-point presentation, and "Investment Facilitation: WTO's Contribution to the TIWG Discussion".

The power-point presentation on "e-commerce, WTO rules & RTAs" was presented by Victor do Prado, director of the WTO's Council and TNC division.

The four-page "E-commerce" discussion paper starts with a caveat that "the paper has been prepared under the sole responsibility of the WTO Secretariat and does not purport to reflect the opinions or views of Members of the WTO."

However, in paragraph three, the Secretariat says "the post-Nairobi (2015) period witnessed an increased interest amongst Members to deepen discussion on e-commerce in the WTO."

"This increased momentum culminated in the circulation of eleven submissions from Members since July 2016... The submissions cover a wide range of issues including, among others, the definitions of e-commerce, transparency, regulatory framework, and infrastructure gaps to enable e-commerce... Some Members have shown a keen interest in pursuing e-commerce further so as to deal with specific issues that have arisen."

But the paper remained silent on the opposition and stalemate in the negotiations after the African Group and several developing countries as well as LDCs expressed their categorical opposition to depart from the 1998 mandate. The African Group stated several reasons centering around infrastructure and digital divide that countries in Africa suffer from in respect of e-commerce.

The secretariat paper went on to discuss and elaborate various covered agreements and their relationship with e-commerce in "WTO Agreements and E-commerce" and claimed unambiguously that "by eliminating tariffs on IT products that are important components of the electronic commerce infrastructure, it makes them more affordable and readily available."

In the section on "the importance of the development dimension", the Secretariat cited a report by UNCTAD (United Nations Conference on Trade and Development) on "eTrade for All" suggesting that the WTO's consideration of e-commerce and digital trade issues can help pave the way for further cooperation.

However, it did not mention the growing digital divide in African countries cited by the ITU (International Telecommunications Union).

As reported in SUNS #8403 dated 16 February 2017, Uganda made a detailed statement during the dedicated session on e-commerce on 18 October 2016 that "the African Group emphasized repeatedly about bridging not only the digital divide but also the knowledge gap that currently exists [in e-commerce]."

Uganda said three things are required in e-commerce. They include "access; affordability; and availability."

According to the ITU facts and figures for 2016, 75% of the entire population in Africa is offline, Uganda said.

"Only 20 million households in LDCs have Internet access out of 1 billion households in the world. Fixed broadband penetration remains at below 1% in Africa and among the LDCs; and only five LDCs have achieved the Broad-band Commission target on affordability," Uganda pointed out.

Uganda said "infrastructure and connectivity are another major issue", as, by early 2016, total international Internet bandwidth had reached 185,000 Gbit/s, up from 30,000 in 2008.

"Africa has the lowest international connectivity of all regions: there is twice as much bandwidth per inhabitant available in Asia and the Pacific, four times as much in the CIS region, eight times as much in the Americas and more than twenty times as much in Europe," Uganda maintained.

"Therefore, lack of international connectivity is a major bottleneck in the Internet infrastructure of LDCs," Uganda concluded.

Besides, the African Group, Uganda, India, and the LDC group have demanded that members must adhere to the 1998 mandate which called for continuing the work in all WTO bodies to examine all the issues before considering any further steps.

The WTO Secretariat's paper also covers "e-commerce in regional trade agreements" in which it has argued that "unsurprisingly, the issues addressed by e-commerce provisions in RTAs largely coincide with those identified in recent submissions of WTO members."

"Advancing the discussions in the WTO will be important to avoid any further fragmentation of rules and commitments related to e-commerce," the Secretariat argued.

In "issues for further consideration," the Secretariat concluded: "The global nature of e-commerce is an incentive to encourage further discussion on possible global approaches in the area of trade. The G20 can play an important role in helping to facilitate this discussion. This will ensure a better understanding of e-commerce including its strong link to development and the opportunities provided especially for SMEs [small and medium enterprises]."

In effect, the WTO Secretariat under the leadership of its director-general Roberto Azevedo is aggressively lobbying for e-commerce negotiations despite opposition from members.

As regards "Investment Facilitation," the WTO Secretariat has called for "discussing priority measures and policies for facilitating and expanding investment."

It asked G20 members to "explore" how they "can help to facilitate and expand investment - at both the national and international level."

The Secretariat underscored the need to "identify core investment facilitation principles - building on last year's G20 Guiding Principles for Global Investment Policymaking."

Lastly, it called for encouraging "a dialogue on trade investment policy coherence among WTO members - with a particular focus on how the multilateral trading system can contribute to facilitating investment flows."

Shockingly, in the so-called member-driven organisation, the WTO Secretariat led by Azevedo has now become a "leviathan" to push and promote negotiations in areas where a large majority of developing and least-developed countries remain opposed, according to several trade envoys who asked not to be quoted.

"And that the Secretariat and Azevedo are doing this so brazenly to help the major developed countries, particularly the United States, has become an order of the day," according to an African trade envoy, who preferred not to be quoted.

The e-commerce negotiations, investment facilitation and the disciplines for micro, small, and medium enterprises are the core priorities of Azevedo and major industrialized countries for the WTO's eleventh ministerial meeting in Buenos Aires later this year.

In crux, the developing and least-developed countries are made redundant at the WTO by the WTO Secretariat led by Azevedo who is set to secure a second term on Tuesday, several trade envoys said. +