Can e-commerce trade rules help micro, small and medium enterprises in developing countries?

Event report

The session was based around the question of how the growing e-commerce trade interacts with the current framework of the rules within, as well as outside the WTO, specifically for MSMEs in developing countries. The goal of the panel was to improve the understanding of how developing countries can use e-commerce trade rules to their advantage to continue to develop. 

The benefits of cross border e-commerce were brought up several times, as this kind of platform has given MSMEs the opportunity to expand their businesses by allowing them to reach customers in markets all over the world that they have never had access to before. Mr Winichai Chamchaeng, Vice-Minister of Commerce, Thailand, said that e-commerce has helped increase customer confidence and the overall customer base that MSMEs in Thailand have been able to reach. He also said that the development of trade rules in relation to e-commerce will benefit all stakeholders and MSMEs in the region.

Ms Chan Kah Mei, Deputy Director of the Singapore Ministry of Trade and Industry, also spoke about how e-commerce has been helping companies in Singapore expand globally. She then spoke about some of the different types of MSMEs that e-commerce has impacted within the region. From traditional businesses using online stores to reach non-traditional markets, to logistics based businesses that now have access to data in new markets globally, as well as the increase in C2C (consumer to consumer) companies that use an e-market platform.

The challenges in e-commerce for MSMEs in developing countries were also discussed. These challenges include: lack of infrastructure and access to the Internet; the difficulty in regulation – due to the many different types of companies; confusion in new business areas that makes it difficult to identify what type of company rules they need to follow; growing restrictions on data due to privacy concerns, taxes, and cross boarder e-payments. As e-commerce has been evolving rather quickly, it is important that the rules stay relevant to the evolving businesses. Mr Carlos Grau Tanner, Director General of Global Express Alliance, talked about the taxation issue in depth.  This is a barrier very frequently faced, and is a reason that the cost of the collection of taxes, often loses money for these companies.

Mr Victor do Prado, Director of the Council and TNC Division at the WTO, spoke about how people do not realise the relevance of the current WTO rules to e-commerce. He said that it should make no difference whether someone buys goods in a physical shop or online, it is still considered goods trading and therefor  does not exempt the buyer and seller from the WTO rules. It is because there are no technological distinctions in the rules that people tend to believe that the rules do not apply to e-commerce, and none of the rules reaffirm that e-commerce is covered.