WTO Members Submit Proposals Aimed at Advancing Exploratory E-Commerce Work

19 April 2018

Over the past few weeks, a host of submissions have been put forward by WTO members as part of exploratory work to support future talks among interested parties on the trade-related aspects of e-commerce. 

This preparatory process builds on the “Joint Statement on Electronic Commerce,” signed by a diverse group of 71 members at the Eleventh WTO Ministerial Conference (MC11) last December in Buenos Aires, Argentina. (See Bridges Weekly, 14 December 2017)

“[We] reaffirm the importance of global electronic commerce and the opportunities it creates for inclusive trade and development. We share the goal of advancing electronic commerce work in the WTO in order to better harness these opportunities,” members said in the joint statement last year.

“We also recognise the important role of the WTO in promoting open, transparent, non-discriminatory, and predictable regulatory environments in facilitating electronic commerce,” the statement continued.

The new proposals, tabled by Argentina, Colombia, and Costa Rica (JOB/GC/174); New Zealand (JOB/GC/175); Brazil (JOB/GC/176); Japan (JOB/GC/177); the United States (JOB/GC/178); Singapore (JOB/GC/179); Japan (JOB/GC/180); Russia (JOB/GC/181); and Chinese Taipei (JOB/GC/182) seek to organise exploratory work and identify potential elements that could form the basis of a future agreement.

The submissions show indications of potential overlapping interest in exploring several specific areas, including market access commitments, trade facilitation, consumer protection, and data flows. The coalition working on the next steps for the joint statement will reconvene next month and again in June, followed by a stocktaking exercise in July, sources said.

Discussing rationale, vision

Various submissions underlined the importance of developing new rules in this area, such as how it could demonstrate the WTO’s ability to adapt to the technological changes reshaping the global economic landscape.

Argentina, Colombia, and Costa Rica together emphasised that progress on the e-commerce agenda would represent a “milestone on the road towards reviving the negotiating function of the WTO.”

Japan noted that the present WTO framework was “developed before the technological evolution of the Internet” and “may not fully take into account the implications of the latest technologies,” emphasising the need to make WTO obligations more relevant to the digital economy.

“Achieving consensus on such provisions would also demonstrate the WTO's ability to respond to transformations in the global economy,” the US communication stated.

Various submissions also set out to define the role of existing WTO disciplines that apply to e-commerce, with many noting that these should serve as the point of departure. Some, such as Japan, New Zealand, and Singapore, also suggested that it would be valuable to draw on lessons learned from free trade agreements.

New Zealand suggested that discussions draw on existing resources under the WTO’s 1998 E-Commerce Work Programme, urging members not to duplicate the work already accomplished but instead to use this new exploratory work to focus on specific policy issues that can be addressed through potential trade rules.

Argentina, Colombia, and Costa Rica proposed clarifying existing disciplines and establishing new rules only where necessary to address new developments or gaps in the system.

The communication from Russia divided e-commerce issues into matters that fall under the WTO legal framework but require further clarification and those that are not covered by the existing WTO rules but concern e-commerce. The work structure proposed by Russia prioritised the examination of gaps in existing WTO agreements in relation to barriers to e-commerce as a first step to understanding the potential gains of a future agreement.

“We suggest that the future discussions cover all aspects of e-commerce without splitting topics on e-commerce for separate discussions,” says Russia’s proposal.

The joint submission from Argentina, Colombia, and Costa Rica, also underlined the importance of a “coherent negotiating agenda” and a “holistic approach” when structuring exploratory work given the complexity and cross-cutting nature of e-commerce.

Various submissions also referred to the importance of highlighting the development dimension in these discussions, and thus help ensure the maximum contribution of new e-commerce rules to inclusive growth. This commitment is enshrined in the text of the joint statement, which says that signatories “recognise the particular opportunities and challenges faced by developing countries, especially [least developed countries], as well as by micro, small and medium-sized enterprises, in relation to electronic commerce.”

Brazil highlights the promotion of the participation of women as consumers and traders in e-commerce as a crucial aspect of any outcome on e-commerce in the WTO, and emphasises the imperative of addressing challenges to small businesses. New Zealand also noted the significance of e-commerce for women, micro, small, and medium enterprises, and rural communities.

The Brazilian non-paper further underlines development as a core and “cross-cutting” element in exploratory work, calling for a dialogue on the challenges and opportunities faced by developing countries with regard to e-commerce and in-depth needs assessment.

The communication proposes a flexible approach allowing developing and least developed country (LDC) members to choose which components they are prepared to consider in future talks, which could lead to the creation of tiered timetables for the implementation of specific components.

“The flexible combination of different outcomes might ensure a level of ambition that is tailor-made to each developing and least-developed member, without necessarily reducing the overall level of ambition on electronic commerce negotiation as a whole,” it says.

The communication from Argentina, Colombia, and Costa Rica underscores the need for “flexibility for developing countries in binding market opening and undertaking new obligations on regulatory issues.” It also suggests exploring potential synergies with the Aid for Trade initiative or drawing on the experience of the staggered implementation schedules of the WTO’s Trade Facilitation Agreement (TFA).

Several communications reaffirm that negotiations must stay open to all members in line with the joint statement, including the proposal by Argentina, Colombia, and Costa Rica, as well as submissions from New Zealand and Russia, respectively. 

“We are convinced that the success of the above-mentioned exploratory work depends on the active participation of all WTO members, without which the elaboration of universal rules on effective regulation on e-commerce issues at the international level is not deemed possible,” reads the Russian communication. “We therefore encourage WTO members that signed the joint statement to put in their best efforts to involve as many members into the exploratory work as possible.” 

Market access, trade facilitation

Many countries included market accessibility and improved market access commitments for e-commerce-related sectors of goods and services trade as part of the agenda for exploratory work, including Argentina, Colombia and Costa Rica; Brazil; the US; Japan; Chinese Taipei; and Singapore. 

For example, Singapore focused on market access for goods and services as a means to promote infrastructure development in developing countries and overcome infrastructure gaps obstructing the widespread adoption of e-commerce in LDCs. 

Members including the US, Singapore, and New Zealand also noted the value of the current practice of not imposing customs duties on electronic transmissions, with Singapore and New Zealand suggesting that this could be made permanent in order to create a more predictable business environment for business and consumers. 

“The most important value that the Internet brings to international trade is that suppliers are enabled to reach potential overseas customers direct across great geographical distances and strict political or state boundaries instead of relying solely on physical contacts, and consequently to gain access to the markets,” Chinese Taipei’s communication states. “It is our belief that such measures should be disciplined and restrained, otherwise the primary merit of improving market accessibility of electronic commerce vanishes.” 

Meanwhile, Brazil said e-commerce facilitation “could be readily translated into rulemaking provisions,” citing the issues’ “technical, specific and rather uncontroversial nature.” 

In guiding efforts to create an enabling environment for e-commerce, members noted the key role of interoperability between domestic regulatory frameworks to eliminate hurdles for cross-border business operators. Japan in particular pointed to a role for the WTO in promoting intergovernmental activities at the regional and international levels in order to encourage harmonisation in regulations. 

Various submissions also referred to the need to make administrative documents available electronically, known as paperless trading, in order to lower the costs of participating in e-commerce for small and medium-sized enterprises. 

Members including New Zealand, Brazil, and Japan also referred to electronic authentication methods and/or access to online payment solutions as a means to enable online transactions. Brazil and Singapore encouraged members to ensure that their legal systems permit contracts to be concluded electronically. 

Several proposals referred to other measures to improve trust and foster a secure environment, including towards the protection of online consumers from deceptive business practices; safeguarding personal information of e-commerce users; identifying threats to cybersecurity; and addressing spam and unsolicited electronic messages. 

ICTSD reporting.

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