African Group Submits Proposal on E-commerce Ahead of WTO Ministerial

28 November 2017
E15 Digital Economy

The African Group at the WTO has tabled last week a draft ministerial decision on e-commerce to be considered by WTO members ahead of the organisation’s Eleventh ministerial conference (MC11), which will be held on 11-13 December in Buenos Aires, Argentina.

In the run-up to MC11, e-commerce and digital trade have drawn renewed interest from various WTO members, with a series of proposals submitted on these topics since this summer. While some delegations have clearly expressed their interest in launching new negotiations on trade-related aspects of e-commerce – Australia, Canada, Chile, the EU, South Korea, Norway, and Paraguay, now joined by Colombia, Mexico, Montenegro, Paraguay, Peru, and Ukraine, have made a proposal going in that direction –, others would like to explore the possibility of negotiations, potentially through the establishment of a new dedicated body, broaden the scope of existing discussions, or simply continue with the status quo.

Currently, the WTO’s work on e-commerce is conducted under the Work Programme on Electronic Commerce, which was established in September 1998 to “examine all trade-related issues relating to global electronic commerce, taking into account the economic, financial, and development needs of developing countries.” Such discussions are carried out in relevant WTO bodies – the Council for Trade in Services, the Council for Trade in Goods, the Council for TRIPS, and the Committee on Trade and Development – which report on their progress to the General Council, the organisation’s highest decision-making body outside of the ministerial conference.

In essence, the African Group would like to see a continuation of the work conducted under this work programme “based on the existing mandate and guidelines”, as clearly articulated in its proposal. This would include addressing “all open issues in the relevant bodies, […] including but not limited to definition, classification and technological neutrality.” The proposal also suggests specific directions to guide future discussions on e-commerce.

Other proposals on the topic by Bangladesh, China, Costa Rica, India, and Singapore, also seek to retain the 1998 work programme as the framework for discussions on e-commerce, although each of them with different specificities regarding guidance for future work. A notable element of the submission made by Bangladesh is that it requests developed countries and developing countries in a position to do so to “provide duty free and quota free access to all goods and services originating from all LDCs [least developed countries] that are exported using e-commerce platform directly from LDCs suppliers.”

Concerns about the ability to regulate

In October, the African Group had already circulated a communication to WTO members in which it stated that “discussions, even from a trade policy perspective have not been adequately explored, and where it has, it has barely touched the surface.” It thus called for continuing exploratory discussions within the framework provided by the existing institutional structure.

While recognising the growing importance of e-commerce, African countries have expressed on various occasions their serious concerns with regard the potential implications of new rules in this area. The African Group has thus highlighted that it would consider the negotiation a new disciplines or the establishment of a new WTO body – as sought by some of the proposals submitted by other delegations – premature.

“The African Group has requested continuance of discussions on an exploratory basis to share experiences, including on the digital industrial policies used by others to develop their digital economies, instead of rushing in and adopting premature rules that will prevent countries from catching up,” said Rwanda’s Ambassador François Xavier Ngarambe, the current coordinator of the African Group, in an recent interview with Bridges Africa. (See Bridges Africa, 8 November 2017)

In particular, the African group fears that new disciplines on e-commerce and digital trade could constrain their policy space to put in place a development-oriented digital industrial policy. In its October communication, the group has expressed specific concerns about issues such as the free flow of data, the limitation or elimination of data-localisation requirements, as well as non-disclosure of source code.

In relation to these preoccupations, the African Group proposal suggests a number of elements to guide future work on e-commerce under the existing work programme. These include discussions focused on ways for members to preserve their right to regulate electronic commerce and promote their national digital industrial development; an examination of the risks and opportunities associated with the digital economy and e-commerce; as well as a consideration of measures that members have taken, or may take, to develop their national institutional regulatory capacity.

The African continent, however, is not speaking with one unified voice on e-commerce and digital trade, as some African countries have shown more willing to discuss new rules on such topics. Nigeria and Kenya, for example, have been engaging as part of a group of developing countries – the so called “Friends of E-commerce for Development” – whose objective is to invigorate the global trade policy agenda for e-commerce through informal meetings at the WTO, although these countries have also made clear that their participation in the group does not mean an automatic agreement to negotiate.

“The emergence of e-commerce is the product of fast-paced changes in technology that have presented Africa with the gift of opportunity. Maximising its potential will depend on how the continent responds. Not engaging would be a mistake,” wrote Chiedu Osakwe, Nigeria’s chief trade negotiator, in a recent article in Bridges Africa. (See Bridges Africa, 8 November 2017)

Moratorium on e-commerce

The Buenos Aires ministerial conference is expected to take a decision on whether or not to renew the so-called “moratorium on e-commerce,“ whereby WTO members refrain from imposing customs duties on electronic transmissions. This moratorium has been consistently extended to the next ministerial and renewed beginning in 1998, with discussions on its extension traditionally linked to the extension of another moratorium on “non-violation and situation” complaints under the organisation’s intellectual property rules, albeit informally.

On this specific point, however, the African Group does not have a fixed position yet, as its members are still debating this question.

“On the moratorium, the African Group is 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 these reasons, the renewal of the moratorium should not be seen as automatic,” reads the draft ministerial decision tabled by the group.

ICTSD reporting.

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