Ecommerce and WTO — emergence of a new issue

Electronic commerce and the digital economy are transforming economic activities and economies now. They have become a central part of the global economy and promises huge potential for trade. Hence there is a need to create a trade regime for the sector. The attempt to create trade laws related to the ecommerce sector is now taken by the WTO. Though the WTO’s effort to create a trade regime for ecommerce started with the Work Programme on ecommerce designed at the Second Ministerial Conference (1998), serious efforts are expected to occur with the eleventh MC at Buenos Aires (December 2017).

In the coming years, new issues like ecommerce, investment etc. may drive WTO discussions instead of the old issues like the Doha Development Agenda.

Electronic commerce in the context of WTO negotiations

Electronic commerce or e-commerce, involves the digital transfer of goods and services. It is the sale or purchase of goods or services conducted over the internet or other computer networks. An e‑commerce transaction can be between individuals, households, enterprises, governments and other organizations.

Ecommerce under WTO: The Work Programme on ecommerce

The Work Programme (1998) on ecommerce declared at Second MC gives basic guidelines and is emerging as the future regulations for the fast-growing global ecommerce sector. It covers all issues related to trade arising from global e-commerce, including enhancing internet connectivity and access to information and telecommunications technologies and public internet sites, the growth of mobile commerce, electronically delivered software, cloud computing, the protection of confidential data, privacy and consumer protection.  

The programme also explores the economic development opportunities by e-commerce for developing countries, particularly least-developed countries.

WTO Councils to study the relations between ecommerce and existing trade laws

There is strong relation between ecommerce sector and other sectors. For creating an effective regulation for the sector overlapping with other trade regimes has to be examined. Hence, the Work Programme instructs four WTO bodies to explore the relationship between existing WTO agreements and e-commerce. Specifically;

·         the Council for Trade in Services was instructed to examine the treatment of e-commerce in the legal framework of the GATS (General Agreement on Trade in Services);

·         the Council for Trade in Goods has to examine aspects of e-commerce relevant to the General Agreement on Tariffs and Trade (GATT) and other WTO agreements affecting trade in goods;

·         the TRIPS Council was instructed to examine the intellectual property issues arising in relation to e-commerce, (namely the copyright and trade mark related rights); and,

·         the Committee on Trade and Development was instructed to examine the development implications of e-commerce, taking into account the economic, financial and development needs of developing countries.

 Ecommerce at Nairobi MC

At the Nairobi MC, members reached on a draft decision on the work programme besides extending the moratorium on customs duty. The discussions were based on the Declarations made under Work Programme on Ecommerce at the Second (Geneva) MC in 1998.

Ecommerce discussions in recent the period

Discussions on ecommerce sector are going on at tremendous pace in recent months. Several WTO bodies have made consultations on framing broader principles for the regulation of the ecommerce sector by providing development opportunities to the developing and least developed countries.

During 2016, some of the Councils were met and made discussions for designing ecommerce guidelines under the auspices of WTO. Some members have demanded linking Small and Medium Enterprises with the ecommerce guidelines. This is because the SMEs can provide products to big ecommerce firms as part of global supply chains.

For example, ‘the Friends of eCommerce for Development (Argentina, Costa Rica, Kenya, Nigeria, Pakistan and Sri Lanka) has organized a seminar on ‘eCommerce and Development’ on 9 December 2016 at the auspices of WTO.

In a July 2016 General Council meeting, the WTO members considered a US suggestion to address and share information on cross-border information flows, localization requirements, privacy protection and cloud computing. China which has a huge and fast growing ecommerce market has made a request for sharing of information related to ecommerce. The Buenos Aires MC is expected to make a firm forward step on this regard.

Ecommerce and MSMEs

Several efforts are now emerging to empower Small and Medium Enterprises of developing countries to make use of the new trade regime on global ecommerce sector. This adds significance to the ecommerce trade discussions within WTO as it gives a ‘developing country feel’. John Danilovich, Secretary-General of the International Chamber of Commerce (ICC), in one of the WTO discussions provided ideas to support MSMEs which may help them to sell goods online more efficiently. The group has suggested creating digital trade rules to enhance e-commerce growth and to improve consumer trust.

India has also indicated intention to join discussions on the matter. The DIPP (Directorate of Industrial Policy and Promotion) is expected to bring effort to design India’s strategy related to ecommerce discussions. Post Nairobi trends show that for the time being, countries are seemed to be shifting away from the Doha Round issues to the new issues like ecommerce.

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