Digital trade as if development mattered

Event report

[Read more session reports from the UNCTAD E-Commerce Week 2018]

The moderator of the session, Mr Pierre Sauvé (Senior Trade Specialist, Macroeconomics, Trade and Investment Global Practice, World Bank Group) started by explaining the title of the session. There are abundant talks about development in Geneva circles, but insufficient action. The title expresses the hope that, if negotiations on e-commerce are launched at the World Trade Organization (WTO), development will be at the centre of the discussions. More specifically, the session aimed to identify the hurdles that stand in the way of countries that wish to engage in e-commerce as a way to foster development. Sauvé called attention to the fact that three countries that signed the Joint Statement on electronic commerce at the 11th WTO Ministerial Conference, which took place last December in Buenos Aires, are countries from South-East Asia, including Cambodia. The moderator gave the floor to Mr Sorasak Pan (Minister of Commerce, Royal Government of Cambodia) and asked him to explain why his country decided to sign the joint statement.

According to Pan, Cambodia joined the e-commerce joint statement at MC-11 because the country would rather be a rule-maker than a rule-taker. There are many trade discussions currently taking place outside WTO. It is important to have these conversations within the WTO and to reinforce the central role of the organisation. In his opinion, the Trade Facilitation Agreement (TFA) could be a model for a future e-commerce agreement because members coalesced around the same goal, but committed to progress at their own pace. The plurilateral initiative born at the WTO is the first necessary step in the right direction. Pan added that capacity building for developing countries and least developed countries (LDCs) is key, so that they can engage in future e-commerce negotiations in a more meaningful way.

Mr Michael Ferrantino (Lead Economist, Macroeconomics, Trade and Investment Global Practice, World Bank Group) spoke about the advantages and benefits of e-commerce, such as facilitating access to a variety of goods and services online, as well as the challenges related to connectivity, entrepreneurial skills, regulation, and logistics. Ferrantino opined that the regulatory environment needs to be adjusted in order for trade to flourish. Laws on consumer protection, data protection and privacy, cybercrime, and intermediary liability are necessary, as well as trade facilitation measures, such as single windows. Finally, he called attention to the need to overcome what is possibly the most important obstacle for e-commerce: delivering goods to the last mile.

Ms Kati Suominen (Chief executive officer, Nextrade Group LLC) said that the private sector is a necessary partner for several reasons: a) it is the private sector that makes e-commerce work, from e-platforms to small sellers; b) unlike other areas of trade, it is the private sector that holds the data on transactions and e-commerce flows; they can see where the frictions are and can help policy makers to be better informed; c) the private sector has been important in the implementation of the sustainable development goals (SDGs). There are several private sector projects on the ground that have a public interest dimension, such as empowering women. Suominen, gave examples of public-private-partnerships (PPPs) on e-commerce, such as the e-Trade for All initiative, co-launched with the private sector; the non-profit Business for e-trade Development, formed in 2016-2017; and the Alliance for eTrade Development, launched in 2017 by the business for eTrade development with USAID.

Ms Nora Neufeld (Counsellor, Division on Market Access, WTO) spoke about the experience of negotiating the TFA and whether it could serve as a model for future e-commerce negotiations. She mentioned that in the TFA talks, member countries started by defining common principles, such as that development needed to be an integral part of the whole negotiation process, not an after-thought. They also broke free from the three big categories of countries (developed, developing and LDCs) and adopted a country-by-country approach. According to Neufeld, the TFA teaches us that it is possible to put development at the core of a big negotiating project, but we need to be patient and prioritise quality over speed. She opined that it is too early to say if the TFA can be a model, as the real impact of the agreement still remains to be seen. In addition to that, there is a fundamental difference between the TFA and e-commerce negotiations: while the former simply aimed to reduce inefficiencies, the later necessarily involves bargaining and more controversial topics.

Mr. Junichi Ihara (Permanent Representative of Japan to the UN and other international organisations in Geneva, and Chair, WTO General Council) shared some take-aways from the panel discussions. According to him, digital trade has a huge potential for fostering development, but it could also create more divides between those who are ready for e-trade and those who are not. As a consequence, there is a need for the international community to assist developing countries, specially LDCs. International trade rules are important because of the cross-border nature of e-commerce: national laws alone cannot deal with legitimate policy interests and concerns, such as consumer protection. The WTO is a good venue to discuss trade norms because of the principles that underpin it, such as the universal application of rules and the non-discrimination principle. He mentioned that in the upcoming second meeting of the joint e-commerce initiative group, Japan will propose the discussion of a few points: a) how to facilitate e-commerce including the global payment environment; b) how to ensure an open and free trade environment. Issues such as data localisation and data protection need to be tackled; c) how to protect intellectual property, such as source codes and trade secrets; d) how to enhance transparency. We should bear in mind, however, that countries are at different stages of development, therefore, there should be a plurality of regulatory approaches.

By Marilia Maciel