Info Service on WTO and Trade Issues (Oct17/21)
26 October 2017
Third World Network
The African Group position on e-commerce talks at WTO
Published in SUNS #8559 dated 24 October 2017
Geneva, 23 Oct (Kanaga Raja) - The African Group has formally circulated
on 20 October, as a restricted official document, the full statement
that it had delivered at an informal meeting on the Work Programme
on Electronic Commerce on 16 October.
In that statement, now an official WTO document, the African Group
made clear that it will not agree to go beyond the current structure
or institutional arrangement of the 1998 WTO Work Programme on Electronic
The statement, in the form of a restricted Job document (JOB/GC/144),
was circulated on 20 October at the request of Rwanda on behalf of
the African Group.
At the informal meeting on 16 October, a large number of developing
and least developed countries including India, the African Group and
Uganda on behalf of the least developed countries had castigated the
proposals tabled by several developed and some developing countries
for establishing a Working Party or Working Group on electronic commerce
at the upcoming Buenos Aires ministerial conference in December. (See
SUNS #8555 dated 18 October 2017).
In its full statement issued on 20 October (a footnote mentioned that
the statement is without prejudice to the position of one Member),
the African Group reaffirmed its position that it "may be able
to agree to continue the exploration of issues under the 1998 WTO
Work Programme on Electronic Commerce (Work Programme), however we
will not agree to go beyond the current structure or institutional
arrangement of the Work Programme."
"In building the Africa we want, towards the structural transformation
and industrialisation of our economies, our African Union Ministers
of Trade have pronounced 'that the work we undertake in multilateral
trade and rule-making support Africa's continental integration agenda
and, at a minimum, not undermine it'," it said.
In it statement, the African Group also gave its general and specific
views on proposals tabled in documents JOB/GC/137, JOB/GC/138 and
[JOB/GC/137 is a draft ministerial decision submitted by the Russian
Federation that calls for the establishment of a Working Group on
Electronic Commerce under the auspices of the General Council. JOB/GC/138
is a proposal tabled by Hong Kong-China, Japan and Chinese Taipei
that also calls for the establishment of a Working Group on Electronic
Commerce, while JOB/GC/139 is a proposal from Costa Rica that calls
for the establishment, as an integral part of the 1998 Work Programme
on Electronic Commerce, an E Commerce for Development Agenda.]
In its statement, the African Group said that establishing a Working
Group on E-commerce presumes one of two things: One, that something
is not working with the current structure; and two, that the new structure
will provide some kind of value-addition.
A number of delegations have also said that the Work Programme has
According to the African Group, in going through the discussions on
e-commerce that have taken place in the last ten to fifteen years
in the WTO, both at a horizontal level in the General Council and
in the relevant WTO bodies (Committee on Trade and Development, Council
for Trade in Services, Council for Trade in Goods, TRIPS Council),
Members will observe that discussions, even from a trade policy perspective
have not been adequately explored, and where it has, it has barely
touched the surface.
"We should also recall that for many years, there was little
or no discussion on e-commerce. E-commerce, and the digital economy
have not been static, and many Members are still coming to grips with
what appears will be very profound changes brought on by the digital
transformation of which e-commerce is integral. Hence, the evolution
of the sector makes it necessary to continue the exploratory discussions
under the Work Programme," it stressed.
Referring to JOB/GC/138, it noted that the proponents state that "existing
WTO Agreements apply to electronic commerce".
If this is the case, are the proponents also suggesting that Members'
Schedules of Commitments negotiated in the Uruguay Round automatically
apply to new technologies such as 3D printing, robotics, drone delivery
and Artificial Intelligence, to name a few, the African Group asked.
The African Group objects to this assumption because it has no legal
basis in the WTO's framework.
"It also goes against the basic principle of progressive liberalization.
In addition, new business models, new services and new technologies
that did not exist at the time Members' Schedules were negotiated
do not apply post-hoc."
Members will recall that there still remains a long paper trail in
the WTO of 19 years of unresolved issues pertaining to e-commerce,
These include the divergent views on the technological neutrality
of the GATS, the distinction between, and application of GATS Modes
1 and 2 in e-commerce, whether products delivered electronically are
services or goods or both, and the classification of "new services",
to name a few.
If these issues were resolved, then why are some Members advocating
new multilateral rules on e-commerce?
A Working Group will not replace these systemic divergences, and these
discussions, as per the Work Programme, are required to take place
in the bodies responsible for administering the relevant Agreement.
The African Group also pointed out that it is perplexing that some
Members are advocating new multilateral rules on e-commerce.
"We have already undertaken enough rules so far. The multilateral
rules as they are, are constraining our domestic policy space and
ability to industrialize."
Before the GATT came into being, industrialized Members have benefited
from the absence of rules, through the utilization of policy space.
They then closed this space through GATT Agreements notably by prohibiting
the use of local content requirements; industrial subsidies; infant
industry protection, among others.
In other words, the policy instruments they used during their development
process were denied to late comers through GATT Agreements; what we
qualified in the Committee on Trade and Development Special Session
(CTD SS) discussions as "kicking away the development ladder".
This is the very reason why there is a Doha Development Agenda, with
development outcomes and aspirations for redressing the imbalances
inherited from GATT/WTO agreements.
Yet, the propaganda that new e-commerce rules will be good for developing
countries has been highly contested, the African Group argued.
"Hence, if developing countries cannot find relief in the current
mandates and rules in a Multilateral Trading System that is intended
to serve all its Members, then any attempt to adopt new rules on new
issues - particularly if those rules are meant to further marginalise
poor economies as exemplified by TPP (Trans-Pacific Partnership) e-commerce
rules, then new rules would entrench existing imbalances and further
constrain the ability of our governments to implement industrial policy
The African Group further said that the reference to MSMEs (micro,
small and medium sized enterprises) in various submissions, including
in JOB/GC/138 and JOB/GC/139, is interesting.
"There is a false narrative that has gained currency in relation
to MSMEs, which seeks to paint some delegations as the new Messiahs
that we have been waiting for to deliver MSMEs from all of their troubles."
Are the proponents suggesting that the current rules we have been
negotiating in fulfilment of the DDA mandate, such as on substantial
reduction of OTDS (overall trade distorting domestic support) in Agriculture,
Cotton, and Special and Differential Treatment, with the view to promoting
structural transformation and industrialization in building the Africa
we want, would not be of benefit to MSMEs in Africa?
Why is it that we have not seen the same advocates speak strongly
in favour of the conclusion of the Doha Round, which would have a
direct, immediate and positive effect for the thousands, if not millions
of deserving MSMEs?
Are they suggesting that the fact that we change the mode of operation,
that it would suddenly eliminate the supply-side constraints, lack
of technology and lack of finance, and the SPS (sanitary and phytosanitary)
and TBT (technical barriers to trade) constraints that many MSMEs
The African Group further pointed out that the narrative is that multilateral
rules on e-commerce will leapfrog development through the power of
Yet, it said, the proposed typology of rules which are confirmed through
the Footnote in JOB/GC/138, is that MSMEs as we understand the scope
of this definition to be, are the least likely to be able to effectively
compete with multinational corporations, who have become global digital
leaders, and have decimated smaller companies and who have benefited
from digital industrial policies such as subsidies, R&D subsidies,
development of, and access to, and ownership of technologies, economies
of scale, government-sponsored infrastructure, tax benefits, etc.
"We can therefore conclude that given the narrative on MSMEs
in recent months, and their sudden prioritization in e-commerce is
not to address the problems faced by MSMEs, but to advance an agenda
for rules. MSMEs, in our view, are only being used to fast-track the
JOB/GC/138 limits the evaluation of the Working Group to the proposals
that are footnoted, said the African Group.
These include the hard rules that the African Group have condemned
for over one year now, such as ensuring the free flow of data, no
data localisation requirements, permanent moratorium on customs duties,
non-disclosure of source code, barring forced technology transfer,
It is also interesting to note that the African Group submission contained
in JOB/GC/133 is not part of the evaluation of this proposed Working
Group. Hence, the Working Group is intended to serve as the conduit
and channel for these new topics contained in the current submissions,
and thereafter a decision will be taken on the need to have rules
In JOB/GC/138, the Working Group will decide in one year's time to
negotiate rules. In JOB/GC/137, the African Group's reading is that
it allows for the possibility of developing rules in the Working Group
without any timeframe. Hence, this Working Group is de jure a negotiating
"The African Group will not support any ideas for negotiating
rules, or move in a direction on developing rules on e-commerce. We
believe it is entirely premature," Rwanda underlined.
By the Working Group requesting the WTO bodies for assistance in JOB/GC/137,
it reverses the structure established in the Work Programme, it said.
In other words, it is no longer bottom-up where the technical issues
were dealt with in the technical bodies first, and upon maturity,
would be taken to the General Council. The Working Group would instead
be top-down. This is not an acceptable solution because the topics
for discussion in the Working Group are also open-ended.
While in JOB/GC/137, the introduction of topics is Member-driven,
we have already seen a number of submissions currently on the table
that have been identified as international Internet public policy
issues by the United Nations Commission on Science and Technology
for Development in the Working Group on Enhanced Cooperation in November
2014, said the African Group.
Several of these issues being brought into the WTO have been discussed
at length by other international organisations that have policy authority
over these issues, or they have been resolved in these international
The African Group cited these as including:
a. UN Guidelines for Consumer Protection, which includes a section
b. UNCITRAL Model Law on Electronic Signatures;
c. UNCITRAL Model Law on Electronic Commerce; and
d. Unsolicited Communications Enforcement Network to curb Unsolicited
Commercial Electronic Messages, or Spam.
Hence, in identifying those "trade-related issues relating to
global electronic commerce", appropriate issues have to pass
First, whether they fall under the scope of the WTO in the Marrakech
Agreement in Article II.1 that "the WTO shall provide the common
institutional framework for the conduct of trade relations among its
Members..."; and second, whether it falls under the existing
WTO Agreements covered under the Work Programme.
THE "E-COMMERCE FOR DEVELOPMENT AGENDA"
On the so-called "E-commerce for Development Agenda" (proposed
by Costa Rica), the African Group views it as a "Trade Liberalization
The African Group said it is not clear how the proponent rationalizes
JOB/GC/139 vis-a-vis the existing Work Programme, which already accommodates
discussions on development-related issues.
These are contained in paragraph 1.1 where the comprehensive Work
Programme was established to: "examine all trade-related issues
relating to global electronic commerce, taking into account the economic,
financial and development needs of developing countries", and
in paragraph 1.3 where it states that "the work programme will
also include consideration of issues relating to the development of
the infrastructure for electronic commerce".
In addition, and very importantly from a horizontal perspective, development
discussions fall under the competence of all four relevant bodies.
Of particular and direct relevance is the Committee on Trade and Development,
one of the mandated bodies under the Work Programme, whose Terms of
Reference is to "serve as a focal point for consideration and
coordination of work on development in the WTO, and its relationship
to development-related activities in other multilateral agencies",
and "... to consider measures and initiatives to assist developing
country Members, and in particular LDCs, in the expansion of their
trade and investment opportunities...".
Hence, by the introduction of JOB/GC/139, is the proponent suggesting
that the Committee on Trade and Development does not have a mandate
to deal with the development aspects being proposed under their "E-commerce
for Development Agenda", the African Group asked.
On the collaboration efforts between the WTO and certain international
and regional organisations, the African Group posed a few questions:
a. On what basis were these International Organizations (IOs) chosen?
Other IOs have policy authority over several issues that are being
proposed as "e-commerce" issues in the WTO. Will the WTO
take over their mandate?
b. If this is a "development agenda" then why is there no
reference to the ITU (International Telecommunication Union)? 193
States are Members of the ITU, who are responsible for allocating
global radio spectrum and satellite orbits, developing technical standards
that ensure networks and technologies interconnect, and more importantly,
they have an international mandate to bridge the digital divide. This
is the most prevalent issue underpinning any discourse on e-commerce
in the WTO, since you cannot access or engage in e-commerce without
having access to the necessary infrastructure.
c. Why is there a presumption that developing countries need informational
material from these organisations to assist them to engage fully in
the relevant discussions? The African Group, for example, have been
engaging fully in the current e-commerce discussions without this
arrangement in place and our engagement is not dependent on material
from these organisations either. These organizations have never needed
permission from the WTO Membership to perform their respective functions.
Furthermore, the Work Programme in paragraph 1.4. already accommodates
the consideration of work of other intergovernmental organisations,
as well as the Marrakech Agreement.
d. The proposal also states that regional organisations should meet
funding gaps. Why are international financial institutions not required
to meet funding gaps? It is the WTO where the rules are being advocated
for, but regional organisations must bear the brunt of funding? What
is the rationale for this?
e. The six areas identified in paragraph 3(a) to (f) are completely
divorced from the development discussions that some Members, such
as the African Group have been advocating for.
[The Costa Rican proposal in para 3 of its proposed Annex XX says:
The Agenda should focus on the following six areas working on the
basis of proposals and contributions submitted by Members:
[a. ICT Infrastructure and Services: How can we apply trade policy
to help reduce the digital divide, especially considering Sustainable
Development Goal 9(c): "to significantly increase access to information
and communications technology and strive to provide universal and
affordable access to the Internet in least developed countries by
[b. Trade Logistics: How can we facilitate trade from developing countries,
especially from LDCs, through transparent, predictable and more favourable
terms for e-commerce by simplifying customs procedures for exports
to developed countries?
[c. Payment Solutions: How can we facilitate mobile payment services
to advance financial inclusion, and to ensure international payments
for e-commerce transactions in goods and services?
[d. Legal and Regulatory Frameworks: How can we promote e-commerce
enabling environment by improving regulations on consumer protection,
data protection, secure cross-border data transfers, and other relevant
[e. E-commerce Skills Development and Technical Assistance: How can
the WTO, ITC, UNCTAD, and other relevant international institutions
improve e-commerce readiness and strategy and the delivery of assistance
with a particular focus on MSMEs?
[f. Access to Finance: How can we facilitate access to finance for
e-commerce, especially for MSMEs and LDCs?]
f. ICT Infrastructure and Services is about trade in services liberalization.
This approach presumes that trade policy will solve the ICT infrastructure
and services problem. This has not been the case in most of our countries!
In fact, empirical evidence shows us, and as has been expounded in
the CTD SS discussions that, it is only through a strong foundational
manufacturing base and through sector linkages, where manufacturing
becomes the engine of steady growth of other sectors, particularly
the services sector, where it can lead to technological catch-up,
economic diversification and the structural transformation of our
g. On Trade Logistics, it is difficult to comprehend how as net importers,
developing countries and LDCs will benefit from this type of trade
facilitation. If the genuine interest is development, then there should
be a concrete attempt at developing the capacity of developing countries
and LDCs to become exporters of electronically delivered products.
Overall, said the African Group, this proposal deviates from the already
existing development agenda contained in the current Work Programme
to include issues that are about market access and developing rules,
and in our view, will not lead to development-friendly outcomes.
"In our view, the Work Programme has not been adequately tested
to warrant a change in its structure. To date, only a large number
of submissions have been tabled in the relevant bodies, but what we
have observed is a general reluctance by proponents to discuss their
submissions in any meaningful way both horizontally, and in the relevant
bodies, possibly in the hope that they would seek to create a separate
forum for their agenda as we see today."
It is up to the proponents to face their "moment of truth"
because they have submissions on the table under the current Work
Programme, and it is their responsibility to incite this discussion
in the relevant bodies. Forum shopping will not provide an acceptable
The African Group are neither demandeurs for the Work Programme nor
for the moratorium on customs duties on e-commerce. However, if some
Members feel that the discussions in the Work Programme have been
exhausted, then they should be free to share with us what those outcomes
are on all the outstanding issues, said Rwanda.
"The African Group cannot support the creation of multilateral
fora just for the sake of creating motion when there is neither substantive
movement nor value-addition, and more so when we know that advocated
rules would serve to further marginalise late-comers."
On the moratorium, the African Group are still discussing it in view
of the revenue implications of the current moratorium on customs duties,
particularly in the context of increasing digitization of goods and
services. For all these reasons, the renewal of the moratorium should
not be seen as automatic.
The African Group urged the General Council Chair to ensure that the
draft MC11 text on e-commerce is agreed in Geneva, and that the next
time a meeting on this issue is convened, that all the African Group's
concerns are taken on board.