E-commerce and e-employment

Event report

The session was organized by Tigarti, an Egyptian-Spanish start-up, and moderated by Mr Wasil Rezk (Founder & Managing Director, Tigarti). Rezk highlighted the increasing importance of e-commerce which can promote development and that it has the potential to support sustainable development goals (SDGs).

Rezk also spoke about Trigarti, an e-commerce platform which was founded on the idea of finding ways to link local producers to the world by exporting locally manufactured goods. Rezk pointed out that their biggest challenges come from tax and customs burdens.

Ms Triin Saag (Director, Government Affairs, European E-commerce & Omni-Channel Trade Association) spoke about two seemingly contradictory trends in the development of e-commerce. She noted that there is a skills gap in digitally-related jobs and that there is a high demand for trained workers, but that trends in automation are also increasing the risk of unemployment. However, she said that through the retraining of workers, jobs might be created in other sectors of e-commerce and that people have to accept the idea that jobs are not for life.

Saag also spoke about the challenges that e-commerce creates for postal and shipping services which are struggling to keep up with the increased volume of shipments due to e-commerce.

Moreover, Saag highlighted the differences in consumers’ trust in e-commerce. She pointed out that there are strong differences in purchasing habits within the EU and explained that the consumer trust to buy merchandise online is lower in countries like Bulgaria and Romania than it is in France or Belgium. She explained that the traditional ways of shopping do play a role in consumers’ willingness to buy online, but she also noted that through increasing trust in the Internet as a tool, and safety guarantees for online shopping, e-commerce will change the users buying habits and turn them to online commerce.

This trend is also accompanied by the fact that EU citizens are increasingly buying goods outside the EU and ordering products especially from China. Saag explained that this causes strains for customs and shipping services given that some of these products are fraud or non-compliant with European safety regulations. Saag said that there is also an environmental issue regarding the increase in e-commerce and shipping which is largely due to the amounts of packaging that are used to ship products across the world.

Mr Abdel-Hamid Mamdouh (Senior Legal Counsel, King & Spalding; Former Director, Trade in Services and Investment, WTO) noted that changes in trade and commerce towards e-commerce are happening in an organic way due to the underlying market forces which are driven by incentives.

Mamdouh explained that digital trade has raised a wide range of issues which can be divided into two categories. The first category, which he called a ‘parallel universe’, concerns issues that have always existed in day-to-day transactions, but were conducted in an analogue and bureaucratic manner. Digital trade thus introduced new challenges since it took away some of the paper trails and created intangibles. He emphasised that the core of these challenges are not new problems, but old, only now applied to the online world. The second category concerns the employment and environmental implications which are specific to the appearance of e-commerce and digital trade.

Mamdouh highlighted the fact that e-commerce does not only concern one sector and that e-commerce is a multidisciplinary sector. He explained that the multidisciplinarity of the field is causing a lot of problems worldwide which often remain unsolved due to a lack of collaboration between different sectors.

Mamdouh also mentioned that liberalisation of trade does not necessarily mean that there is a need for deregulation but only that rules should be implemented in non-discriminatory ways. He further noted that international trade negotiations are getting increasingly difficult given that cross-border trade transactions automatically involve multiple jurisdictions and concern many other department besides the national trade departments.
Mamdouh pointed out that trade agreements and negotiations have become the main platform in dealing with non-trade issues, but that trade experts cannot deal with the range of issues they are tasked to discuss, such as security questions related to online services. He mentioned that every single transaction relies on a different resort and that trade experts are often the ones dealing with the bigger picture. He noted that one way for developing countries to benefit from digital trade is through the introduction of joint-venture requirements or rules, requiring foreign companies to train or invest in different ways in the country they want to operate in. These types of regulations are enabling countries without putting unnecessary burdens on trade relationships, according to Mamdouh.

Mr Wasil Rezk (Founder & Managing Director, Tigarti) pointed out that questions remain on how to bridge the gap between countries with high levels of trust in online services and those without. In this regard, Rezk mentioned the example of Indonesia which created an offline system, through an online one. Online vendors can send their products to agents who sell their products directly to the customers. Customers can then decide to have the product delivered or complete the buy through the agent.

Another important question raised by Rezk concerned the ways to create regulatory frameworks which are aimed at protecting local entrepreneurship, but tend to increase complexity for other small businesses wanting to do trade with these countries. Ultimately, these regulations accomplish the opposite because only big companies have the capacity to overcome these burdens and become direct competitors to companies that their governments try to protect through trade barriers.

By Cedric Amon