WTO Report Looks at Role of E-commerce during the COVID-19 Pandemic

The WTO Secretariat has published a new information note looking at how the COVID-19 pandemic has affected e-commerce, including the implications for cross-border trade. It notes the increased use of e-commerce as consumers adapt to lockdowns and social distancing measures and draws attention to several challenges, such as the need to bridge the digital divide within and across countries.

As well as highlighting the uptick in e-commerce during the COVID-19 crisis, the report looks at measures introduced by governments to facilitate e-commerce and some of the challenges facing these initiatives. Governments have worked to increase network capacity, encourage the provision of expanded data services at little or no cost, and lowered or scrapped transaction costs on digital payments and mobile money transfers. The report also looks at ongoing e-commerce discussions in the WTO and how continued implementation of the WTO's Trade Facilitation Agreement could address some of the challenges brought to the fore by the COVID-19 pandemic.

The report argues that the experiences and lessons emerging from the COVID-19 crisis could be a further incentive for global cooperation in the area of e-commerce, which could help to facilitate cross-border movement of goods and services, narrow the digital divide, and level the playing field for small businesses.

The report is available here.

KEY POINTS

· The enforcement of social distancing, lockdowns and other measures in response to the COVID‑19 pandemic has led consumers to ramp up online shopping, social media use, internet telephony and teleconferencing, and streaming of videos and films.

· This has resulted in spikes in business-to-consumers (B2C) sales and an increase in business-to-business (B2B) e‑commerce.⁽¹⁾ The increase in B2C sales is particularly evident in online sales of medical supplies, household essentials and food products.

· Demand has also increased for internet and mobile data services. The network capacity and spectrum to accommodate the shift to online activities has urgently had to be adapted by both operators and governments. Demand has fallen, however, for certain services with a large online component, such as tourism services.

· E‑commerce for goods and services trade has been adversely impacted by the same factors that have caused disruption in supply and demand overall. Such disruptions have resulted in delivery delays or outright cancellation of orders. Several other e‑commerce-related challenges have arisen or been further amplified during this pandemic. These include price gouging (i.e. increasing prices to unreasonably high levels), product safety concerns, deceptive practices, cybersecurity concerns, the need for increased bandwidth, and development‑related concerns.

· The pandemic has highlighted the glaring need to bridge the digital divide, both within and across countries, given the central role the digital economy has played during the crisis. Many traditional obstacles have been accentuated and have continued to hamper greater participation in e‑commerce activities by small producers, sellers and consumers in developing countries, particularly in least-developed countries (LDCs). This has underscored the need for efficient and affordable information and communications technology (ICT) services, such as telecommunication, computer and other IT services and emerging technologies.

· Governments have adopted new measures, and the private sector has also acted, to respond to and ensure that e‑commerce can help to alleviate some of the challenges faced in combatting the virus. These have included increasing network capacity, offering expanded data services at little or no cost, lowering or scrapping transaction costs on digital payments and mobile money transfers, improving delivery services and other logistics, using digital tools to enforce measures and disseminate information, promoting telehealth services, and leveraging ICT for surveillance.

· The global nature of COVID‑19 and its impact on e‑commerce may encourage strengthened international cooperation and the further development of policies for online purchases and supply. The pandemic has made it clear that e‑commerce can be an important tool/solution for consumers. E‑commerce can also support small businesses and, by making economies more competitive, be an economic driver for both domestic growth and international trade.

· The pandemic has highlighted the importance of digital technologies in general, but also several vulnerabilities across the world. The resulting experiences and lessons are relevant to various discussions in the WTO, including those on electronic commerce, which could benefit from looking at greater international cooperation to facilitate the cross-border movement of goods and services, narrow the digital divide, and level the playing field for micro, small and medium-sized enterprises (MSMEs).