WTO Holds E-Commerce Discussions on Digital Divide between the Poor
and Rich
How
to advance WTO discussions on e-commerce was in the spotlight in Geneva this
week, as the permanent missions of Mexico, Indonesia, Korea, Turkey, and
Australia (MIKTA) held a workshop on the subject .The MIKTA group was set up
nearly three years ago during a ministerial-level meeting in Seoul, with the
group outlining a series of shared objectives where, they argued, they could
make a contribution in “protecting public goods and strengthening global
governance.”
The objective of last week’s workshop in Geneva was
two-fold, said Korean Ambassador to the WTO Choi Kyonglim
during his opening remarks. One was to raise the visibility of the MIKTA group
both within the WTO and in the trade context in general, while the other was to
build awareness on digital trade and e-commerce.
Azevêdo
told the audience that internet penetration increased from 6.5 percent to 43
percent at the global level between 2000 and 2015. Furthermore, in 2013 global
business-to-consumer (B2C) e-trade was estimated at US$1.2 trillion, while
business-to-business (B2B) e-trade exceeded US$15 trillion.
The WTO chief called upon the international community
to ensure that these opportunities are made available to all, particularly
given that four billion people across various developing countries remain
offline. Moreover, 850 million out of the one billion people living in least
developed countries (LDCs) are not internet users.
Some regions that have access still struggle to engage
in e-commerce, with Africa and the Middle-East accounting for less than two
percent of the global e-commerce market.
The Director-General added that barriers remain in
areas such as low levels of consumer trust, along with noting room for
improvement in related laws and regulations, among others.
There
is need to reduce the costs of digital infrastructure, as well as those for
logistics and customs. Other issues raised included the lack of compliance with
legal and fiscal requirements on foreign e-market, along with the need for
coherence, or at least recognition, of other countries’ laws dealing with
consumer protection online.
Streamlining cross border transit of low value goods
trade – an area of growth enabled by online platforms – was also a topic of
discussion. Raising and harmonising “de minimis” limits, below which shipments would not be subject
to tariffs, and resolving related and differing approaches taxation among
countries were areas identified for potential gains. Such developments could
also seek to shift the current item-by-item approach for such charges on small
shipments – which are very burdensome for smaller companies – to consolidated
systems that could reduce transaction costs for small shippers.
One
of the sessions was dedicated to data flows, privacy, and consumer protection –
a hot-button topic in this field, particularly given the proliferation of new
trade deals and the efforts to adopt a new US-EU Data Privacy Shield following
the invalidation of the Safe Harbour Framework.
During that session, participants discussed the need to
find the right balance between data protection and data flows at the national
level, as well as to improve global compatibility so as not to hinder trade.
Participants also reviewed how progress on these areas
would facilitate the engagement of micro, small, and medium-sized enterprises
(MSMEs) in e-commerce, given that such companies cannot afford high compliance
costs and uncertainty, unlike larger businesses. This will contribute to boost
consumers’ trust in buying from MSMES in the digital environment, and not to
rely only on bigger, well-known suppliers.
WTO
has had a work programme on the subject since 1998,
with discussions taking place under the Council for Trade in Services, Council
for Trade in Goods, the Trade-Related Aspects of Intellectual Property Rights
(TRIPS) Council, and the Committee on Trade and Development. These then report
to the General Council.
Although progress on the e-commerce work programme has been slow, the issue received some new
impetus recently in the TRIPS Council agenda this past June, for the first time
since 2003. Meanwhile, negotiators meeting informally under the Services
Council’s “Special Session” this week reportedly saw interest in holding more
talks on the services dimension of the issue.
There is need for harmonising
e-commerce practices and procedures; fostering consumer protection; and
ensuring enforcement through the WTO dispute settlement mechanism to enhance
predictability.
Other areas raised included efforts to provide better
measurements on e-trade; apply the trade policy review mechanism to the digital
economy; enhance trade facilitation around e-commerce; update the
Telecommunications Services Reference Paper to guarantee more competition;
revisiting market access commitments on financial and logistics services; and
determining whether there is need to negotiate rules on data flows and localisation.
Some participants suggested that there was no need to
“reinvent the wheel” in terms of creating new rules, suggesting that there was
nothing in the WTO agreements which ruled out their applicability to
e-commerce. Some cited as examples past trade disputes with an online
component, such as an online gambling case between the US and Antigua and
Barbuda (DS285) and a US-China row over alleged Chinese restrictions on trade
in audio-visual products (DS363).
There was broad agreement that there remained a need to
adapt the trade infrastructure to streamline e-commerce and ensure that the
e-commerce agenda lived up to its potential for development and inclusion.