The case for ambitious services market access commitments as part of the JSI on e-commerce
1 Oct 2021 06:00h
Event report
Services trade has significantly increased in recent years, and currently enables much of the trade in goods. It is a value multiplier, because services provide inputs to all sectors, boosting output and exports. Nevertheless, there are significant barriers to services market access, such as lack of legal harmonisation.
Computer and related services – which cover, for example, data processing, database, and cloud computing – enable companies to trade online. They also serve as a catalyst for telehealth and e-learning, and are an engine of growth and productivity, according to Ms Eunice Huang (Head of APAC Trade Policy, Google, Singapore). When these services are liberalised, new market opportunities are created for otherwise marginalised groups from developing countries that have limited domestic markets. This is crucial for micro, small, and medium-sized enterprises (MSMEs) to grow their exports. Services market access disproportionally benefits MSMEs, according to Mr Sam Rizzo (Senior Director for Policy, Information Technology Industry Council). They are the first to gain from services market access because digital tools help them be born global. According to Ms Sahra English (Vice President, Global Public Policy, MasterCard), 78% of SMEs in Africa are optimistic about engaging in e-commerce, but they still face barriers, such as lack of skills, access to digital payment options, finance, and good data insights.
Mr Santiago Wills (Ambassador, Permanent Representative, Permanent Mission of Colombia to the WTO), explained that the Joint Statement Initiative (JSI) on e-commerce at the WTO is a two-track negotiation process. One track is dedicated to substantive rules necessary for robust digital trade. The second track is composed of market access commitments, which aim to ensure that substantive rules are firmly grounded on the territory of participants. According to him, four proposals on services market access have been tabled so far in the JSI. They contain specific sector requests, reflecting the interests of proponents, but show enough commonalities to provide a sound direction for the discussions. These proposals are the basis for section F of the consolidated negotiating text from December 2020. While some members of the JSI are cautious about pushing too hard on market access, others want these discussions to be a priority.
English opined that, without market access commitments, the JSI would not be a meaningful agreement from a business perspective. Rizzo added that the continuation of the moratorium on customs duties on electronic transmissions should be a priority, since it is one of the successes of the WTO, preventing the introduction of trade barriers.
Market access commitments could contribute to a more equitable distribution of benefits from digital trade, and are a necessary complement to rules-based provisions, according to Rizzo. He highlighted some of the findings of the paper ‘The Case for Ambitious Services Market Access Commitments as Part of the WTO Joint Statement Initiative on E-Commerce’, published by ITI and NFTC. According to him, the scope of negotiations at the JSI should be realistic, and give priority to areas that are more crucial to the development of digital trade, such as telecoms, computer-related services, electronic payment services, logistics and delivery, marketing services, creative services, and research and development (R&D) services. Companies, in particular, depend on the existence of market access rules in order to be able to take the risk of entering new markets. In the absence of these rules, smaller economies could be particularly disadvantaged because companies may consider the benefits of entering these markets not to outweigh the risks, mentioned Huang.
Rules on market access are particularly important in the current scenario, in which digital barriers, such as like data localisation and standards-related restrictions are on the rise. Data localisation measures have more than doubled, according to Rizzo. Governments are also adopting technical and standards-based regulation in areas such as cybersecurity and artificial intelligence (AI), often resorting to tools such as mandatory certification and labelling of digital services.
Speakers agreed that the JSI and the upcoming WTO Ministerial Conference (MC12) are milestones. They pave the way for a meaningful conversation to continue beyond MC12. Bilateral and regional trade agreements have been important sandboxes to achieve regulatory breakthroughs. Nevertheless, multilateral agreements represent great progress, because only the WTO can reach far and wide, including countries that have still not liberalised their services sector.
Services trade has significantly increased in recent years, and currently enables much of the trade in goods. It is a value multiplier, because services provide inputs to all sectors, boosting output and exports. Nevertheless, there are significant barriers to services market access, such as lack of legal harmonisation.
Computer and related services – which cover, for example, data processing, database, and cloud computing – enable companies to trade online. They also serve as a catalyst for telehealth and e-learning, and are an engine of growth and productivity, according to Ms Eunice Huang (Head of APAC Trade Policy, Google, Singapore). When these services are liberalised, new market opportunities are created for otherwise marginalised groups from developing countries that have limited domestic markets. This is crucial for micro, small, and medium-sized enterprises (MSMEs) to grow their exports. Services market access disproportionally benefits MSMEs, according to Mr Sam Rizzo (Senior Director for Policy, Information Technology Industry Council). They are the first to gain from services market access because digital tools help them be born global. According to Ms Sahra English (Vice President, Global Public Policy, MasterCard), 78% of SMEs in Africa are optimistic about engaging in e-commerce, but they still face barriers, such as lack of skills, access to digital payment options, finance, and good data insights.
Mr Santiago Wills (Ambassador, Permanent Representative, Permanent Mission of Colombia to the WTO), explained that the Joint Statement Initiative (JSI) on e-commerce at the WTO is a two-track negotiation process. One track is dedicated to substantive rules necessary for robust digital trade. The second track is composed of market access commitments, which aim to ensure that substantive rules are firmly grounded on the territory of participants. According to him, four proposals on services market access have been tabled so far in the JSI. They contain specific sector requests, reflecting the interests of proponents, but show enough commonalities to provide a sound direction for the discussions. These proposals are the basis for section F of the consolidated negotiating text from December 2020. While some members of the JSI are cautious about pushing too hard on market access, others want these discussions to be a priority.
English opined that, without market access commitments, the JSI would not be a meaningful agreement from a business perspective. Rizzo added that the continuation of the moratorium on customs duties on electronic transmissions should be a priority, since it is one of the successes of the WTO, preventing the introduction of trade barriers.
Market access commitments could contribute to a more equitable distribution of benefits from digital trade, and are a necessary complement to rules-based provisions, according to Rizzo. He highlighted some of the findings of the paper ‘The Case for Ambitious Services Market Access Commitments as Part of the WTO Joint Statement Initiative on E-Commerce’, published by ITI and NFTC. According to him, the scope of negotiations at the JSI should be realistic, and give priority to areas that are more crucial to the development of digital trade, such as telecoms, computer-related services, electronic payment services, logistics and delivery, marketing services, creative services, and research and development (R&D) services. Companies, in particular, depend on the existence of market access rules in order to be able to take the risk of entering new markets. In the absence of these rules, smaller economies could be particularly disadvantaged because companies may consider the benefits of entering these markets not to outweigh the risks, mentioned Huang.
Rules on market access are particularly important in the current scenario, in which digital barriers, such as like data localisation and standards-related restrictions are on the rise. Data localisation measures have more than doubled, according to Rizzo. Governments are also adopting technical and standards-based regulation in areas such as cybersecurity and artificial intelligence (AI), often resorting to tools such as mandatory certification and labelling of digital services.
Speakers agreed that the JSI and the upcoming WTO Ministerial Conference (MC12) are milestones. They pave the way for a meaningful conversation to continue beyond MC12. Bilateral and regional trade agreements have been important sandboxes to achieve regulatory breakthroughs. Nevertheless, multilateral agreements represent great progress, because only the WTO can reach far and wide, including countries that have still not liberalised their services sector.
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