Trade rules for development in the digital age: Reality behind the rhetoric

Event report

[Read more session reports from WTO Public Forum 2017]

While e-commerce is generally perceived as a great opportunity in international trade, it might also give rise to formidable challenges for small developing countries to realise its potential for development and employment. This session addressed the ways in which current and proposed trade rules could affect the development potential of e-commerce for small developing countries. Moderator Ms Fatma Brahim, Director in charge of relations with the WTO of the Ministry of Industry and Commerce of Tunisia, opened the session by stressing that small developing countries are still lagging behind in e-commerce and digitalisation, and that e-commerce itself ‘is not the magic wand that can transform underdevelopment into development’. A holistic look is needed to address the on-the-ground realities of e-commerce issues for small developing countries.

The first to address this challenge was Mr Rajesh Aggarwal, Chief, Trade Facilitation and Policy for Business Section, International Trade Centre (ITC). He promoted a bottom-up approach to e-commerce, which he saw as an entirely new channel of marketing in goods and services. According to the ITC’s recently published e-commerce survey, all aspects of the e-commerce process chain – establishing an online business, international e-payments, cross-border deliveries, and aftersales – present challenges and bottlenecks. These include, among others, a lack of Internet access, a lack of knowledge and skills, currency convertibility fees, costly postal and delivery services, and customs procedures.

Moving from a business to a government perspective, Ms Vahini Naidu, Counsellor, South African Permanent Mission to the WTO, spoke about the specific challenges of the African continent, where despite certain success stories, large digital, technological, skills, and income divides limit the region’s e-commerce potential. The e-commerce rules proposed at the WTO assume a one-size-fits-all solution and a level playing field, both of which Naidu considers inadequately address the particular context of small developing economies. In addition, governments need to consider how to address the disruptive nature of the digital revolution to avoid being left behind, by adopting digital industrial policies and data governance regulation.

Mr Rashid S. Kaukab, Executive Director, CUTS International, Geneva, presented a framework for addressing e-commerce issues at the international level. He argued that the definition of e-commerce should be seen in a more holistic way, as it affects, and is affected by, the digitalisation of the economy and society at large. In addition, making international agreements is challenged by the continuously evolving nature of innovation, which is only limited by human ingenuity.

According to Kaukab’s framework, e-commerce is addressed by the WTO and Regional Trade Agreements through market access commitments, rules and regulation commitments, and facilitation commitments. In recent years, there has been a rapid increase in the number and specificity of proposals, papers, and submissions on e-commerce to the WTO. Developing countries have presented enabling issues that need to be tackled, such as access to infrastructure, capacity building, e-commerce skills, and international collaboration. According to Kaukab, a more disaggregated framework might be needed that takes these enabling issues as a starting point to move towards facilitation issues, and ultimately market access commitments and regulation. This could promote a better understanding between developing and developed countries, taking into account their different realities in e-commerce adoption, and leading them to ‘talk to each other rather than past each other’.

The discussion that followed addressed whether the WTO is the right venue to deal with such issues as e-authentication and consumer protection, since these topics are dealt with by other international organisations as well. Naidu pointed out that tackling these issues at the WTO could have implications related to the WTO’s dispute settlement process and the Doha Development Agenda. In addition, questions were raised about whether the proposed e-commerce rules are inherently anti-development, benefiting only the companies and multinationals that are already entrenched in global markets. According to Kaukab, whether small developing countries will be able to benefit from e-commerce will ultimately depend on two main issues: competition and employment. Finding answers to these two challenges might determine how much inclusivity we will benefit from in the e-commerce phenomenon.

by Barbara Rosen Jacobson