The WTO Joint Initiative on e-commerce

As the key policy player in modern global trade, the WTO has established a system of agreements which provides the legal architecture for the liberalization of international trade. At the WTO, discussions on e-commerce are taking place in two parallel tracks: the WTO Work Program on Electronic Commerce (WPEC), launched in 1998 with a non-negotiating and exploratory nature, and the Joint Initiative (JI) on E-commerce (previously called the ‘Joint Statement Initiative on e-commerce’ or JSI), which aims to produce a binding agreement among its members. The Joint Initiative on e-commerce encompasses both traditional trade topics (e.g. trade facilitation) and several digital policy issues, such as cross-border data flows and data localisation, access to the source code and open internet access (network neutrality).

What is a 'Joint Initiative' in the context of the WTO?

Joint Initiatives are a negotiating tool initiated by a group of WTO Members who seek to advance discussions on certain specific issues without adhering to the rule of consensus decision-making involving the whole WTO membership. They are open to any WTO Member. On the occasion of the 11th WTO Ministerial Conference, in 2017, JIs were created on the following issues: JI on e-commerce, JI on investment facilitation for development (negotiations concluded in July 2023); and JI on services domestic regulation (negotiations concluded in December 2021). An informal working group on small and medium-sized enterprises (MSME), and an informal working group on trade and gender were created on the same occasion. In 2020, two new discussions were launched: a structured dialogue on trade and environmental sustainability and an informal dialogue on plastics pollution and environmentally sustainable plastics trade.

Some actors see Joint Initiatives as key mechanisms to make progress on trade liberalization, in a context in which consensus on rulemaking has been harder to achieve on a multilateral basis. They would be a way to reinvigorate the WTO’s negotiating arm. Others argue that Joint Initiatives go against consensus-based decision-making and weaken multilateralism at the WTO. India, South Africa, and Namibia in particular, introduced a communication in February 2021 (WT/GC/W/819.Rev 1), questioning the legality of Joint Initiatives and their outcomes. In December 2023, India expressed concerns once more when discussing the outcomes of the JI on Investment Facilitation for Development (WT/GC/262).

When was the Joint Statement Initiative on e-commerce launched?

The first Joint Statement on Electronic Commerce (WT/MIN(17)/60) was released at the 11th Ministerial Conference in Buenos Aires on 13 December 2017. The 71 signatory members to the statement announced their goal to ‘initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce.’

In 2018, members involved in the first JSI on e-commerce met on an almost monthly basis. Proposals for issues to be added to the agenda were tabled by both developing countries (e.g. Argentina, Brazil, Colombia, Costa Rica, and Singapore) and developed countries (e.g. Australia, Canada, the EU, Japan, New Zealand, and the USA). 

During the 2019 World Economic Forum Annual Meeting in Davos, 76 members announced a Second Joint Statement (WT/L/1056) expressing the participating members’ intention to begin negotiation at the WTO on ‘trade-related aspects of electronic commerce (…) that builds on existing WTO agreements and frameworks with the participation of as many WTO Members as possible.’ The co-facilitators of the JSI on e-commerce are Australia, Japan and Singapore.

What is the relation between the Joint Initiative and the Work Program on e-commerce? 

E-commerce discussions in the WTO currently take place in two parallel tracks. The first is known as ‘the multilateral track’, which was launched in 1998, following the Ministerial Declaration on Global Electronic Commerce. The second involves a subset of WTO members, which are currently part of the WTO JI on e-commerce.

The 1998 Ministerial Declaration on e-commerce launched the Working Program on e-commerce (WPEC) and put in place a moratorium on customs duties on electronic transmissions, by stating that Members would “continue their current practice of not imposing customs duties on electronic transmissions”. The moratorium has been renewed roughly every two years at the WTO Ministerial Conference. The last renewal took place in 2022 at the 12th WTO Ministerial Conference. 

The WPEC was mainly designed to build understanding around the trade-related aspects of e-commerce, without a pre-set objective to negotiate new rules. Its main goals are: a) to examine all trade-related aspects of e-commerce; b) to examine the relation between e-commerce and WTO agreements; c) to give consideration to the economic, financial, and development needs of developing countries.

While the WPEC involves all WTO Members and has an exploratory and informative nature, the JSI involves a subset of WTO members and is aimed at achieving a high standard negotiated outcome that builds on existing WTO Agreements and frameworks with the participation of as many WTO Members as possible.  



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Which countries are part of the Joint Initiative on e-commerce?

Currently, the total number of WTO members formally participating in the e-commerce JSI negotiations is 90. JSI participants account for more than half of all WTO members and 90% of global trade. With regards to the participation of developing countries, some regions remain  underrepresented. There are nine WTO members from Africa: Benin, Brunei, Burkina Faso, Cameroon, Côte d’Ivoire, Gambia, Kenya, Mauritius, and Nigeria. There are five participants from LDCs, namely: Benin, Burkina Faso, Gambia, Lao PDR, and Myanmar. The regions that are least represented in the JSI are Africa, and the Caribbean, which has no participants. In addition, none of the developing Pacific Island countries are part of the JSI on e-commerce.


What is being discussed in the Joint Initiative on e-commerce? 

Over recent years, an increasing number of digital policy issues have been included under trade negotiations on e-commerce at the WTO, and also in the context of Trade Agreements. This reality is reflected in the negotiating agenda of the JSI on e-commerce, which includes not only traditional issues, such as trade facilitation and market access, but also a wide range of digital policy issues, such as data flows, localisation, data protection, cybersecurity and spam.

The themes advanced in members’ proposals have initially been aggregated in six sections in JSI’s first negotiating documents: A. enabling electronic commerce; B. openness and e-commerce; C. trust and e-commerce; D. cross-cutting issues; E. telecommunications; and F. market access. 

In 2022, several changes were introduced to this structure, as could be noticed from the updated negotiating document (INF/ECOM/62.Rev3). There was the exclusion of topic ‘F’ dedicated to market access, and the introduction of an ‘annex’, where articles from various sections were placed. In addition, several topics were relocated in different sections. For example, articles related to the ‘free flow of data’, and ‘data localization’ were placed under “Cross-cutting issues”. In earlier negotiating text versions, they appeared under “openness and electronic commerce”. Ismail provided a comparative analysis between different versions of the negotiating document (Rev.2 and Rev.3), interpreting these changes.  

The table of contents of the negotiating document from November 2023 (INF/ECOM/62/Rev.5) can be seen in the table below. The Annex serves as a record of the achieved progress on these issues, which may be relevant if discussions continue in a second phase. 


How are discussions being carried out? 

Negotiations take place both in small groups and in plenary meetings. Small groups work in parallel, covering a wide range of issues, such as: consumer protection; spam; e-signatures and electronic authentication; paperless trading; digital trade facilitation; source code; open government data; market access; customs duties on electronic transmissions, and open Internet access. New small groups are created as needed. For example, in 2022, small groups were created on privacy, on updating the telecommunications reference paper, and on information and communication technology (ICT) products that use cryptography.

The adoption of a small groups approach aimed to increase efficiency (since the groups work in parallel) and reduce differences of view on the specific issues for which quick progress is more likely to be made.

In June 2022, during the 12th WTO Ministerial Conference, the Ministers of Australia, Japan and Singapore issued a statement, committing to revise the working modalities of the Joint Initiative, and seek expedited progress in the negotiations. Accordingly, in July 2022, a 'new phase in the negotiations' was announced by the co-conveners. A 'stocktaking small group' was created to examine proposals that did not attract enough support. The withdrawal of proposals from single proponents was encouraged in order to facilitate negotiations.

Consolidated negotiating texts - working documents that capture the progress made in the negotiations and serve as the basis for further work - are periodically produced by the chairs. The first consolidated text was published in December 2020 (INF/ECOM/62.rev1). The second document (INF/ECOM/62.rev2) was published in September 2021. The third consolidated document (INF/ECOM/62.rev3) was published in 2022, and introduced some important changes in the structure of the negotiating document, with the exclusion of market access and the relocation of several provisions to a newly-created annex.  In August 2023, the fourth version of the consolidated text (INF/ECOM/62.Rev.4). The latest version of the consolidated document was published in November 2023 (INF/ECOM/62.rev5).

Most of the documents introduced by Members and produced by the chairs - including the consolidated negotiating texts - are accessible only to members of the WTO.  A proposal introduced by Canada, New Zealand and Ukraine in 2020 (INF/ECOM/42/Rev.2), aimed at enhancing transparency in the Joint Initiative on e-commerce by making negotiating summaries public, did not lead to any visible change in procedure.

What is the status of negotiations?

Regular updates on the negotiations are issued by the three co-conveners of the JSI (Australia, Japan and Singapore). In November 2023, the co-convenors mentioned that the initiative has achieved “substantial conclusion” on several digital trade rules that “will facilitate electronic transactions and foster an open and trusted digital economy”. 

In December, the co-conveners announced in a press release the “conclusion of negotiations on a number of global digital trade rules”, covering three broad areas: (a) digital trade facilitation; (b) open digital environment; and (c) business and consumer trust. Agreement has been reached in thirteen topics: E-authentication and E-signatures; E-contracts; Paperless trading; Open government data; Online consumer protection; Unsolicited commercial electronic messages; Transparency; Electronic transactions framework; Cybersecurity; Open Internet access; E- Invoicing; Single Windows; Personal data protection. In other topics, consensus was considered within reach: Customs duties on electronic transmissions, Development, Electronic payments, ICT products that use cryptography, and Telecommunications services. 

Provisions on data flows and localization, which have been considered by co-conveners “key to achieving a high-level agreement”, as well provisions on access to the source code, will be left out of the ongoing negotiations, as “they would require substantially more time for discussions as divergent approaches and sensitivities remain”. The decision to postpone the discussion of these topics took place after the US announced that it would withdraw its support for proposals on data flows, localization and source code, in order to allow policy space for domestic regulation of big tech. Commentators dubbed the decision as “​​one of the most dramatic turns in trade policy”, as the US has exerted leadership in data flows and source code-related proposals in the context of the Joint Initiative since 2018.  

In this context, the co-conveners proposed to approach negotiations in phases. The current phase would be focused on finalizing the negotiation of issues in which agreement is within reach. In the next stage, outstanding issues could be discussed. They mentioned that this solution is not without precedent, as “we have seen a similar ‘stages’ approach in the previous negotiations”. This indicates that discussions on e-commerce could continue beyond the achievement of this partial agreement. 

At the end of 2023, discussions focused on e-payments, telecommunications, and information and communication technology products that use cryptography. In January 2024, participants will focus on topics in which agreement is still considered feasible, as well as on horizontal provisions and legal architecture.

What are the expectations for the Joint Initiative in 2024?

The Joint Initiative (JI) on e-commerce held its first 2024 round of negotiations from 29 January to 2 February. Participating members expressed their willingness to work on the ‘chairs’ text’ circulated by the co-convenors in mid-January. Co-convenors expressed optimism that an agreement could be reached "in the next few months". 

Two topics of particular commercial value remain under discussion: provisions on customs duties on electronic transmissions and provisions on development. These two issues are expected to strongly influence the perception of success of negotiations. Nevertheless, provisions on development lack clarity, and some countries have difficulty in visualising trade-offs and concrete benefits, according to talks which took place at the corridors of the UNCTAD e-week 2023.   

A potential e-commerce agreement would cover many issues of importance for fostering online trade, especially when it comes to promoting trade facilitation and strengthening trust in e-commerce. Nevertheless, it will be significantly less ambitious than initially foreseen. 

In the backdrop, discussions will continue on whether and how to incorporate agreements produced by Joint Initiatives to the WTO legal architecture. Making changes to countries' Schedules of Commitments could be a way forward - as the JI on Services Domestic Regulations demonstrated - but this is not always possible. During MC13, the chairs of the JI on Investment Facilitation for Development (IFD) have not managed to secure the inclusion of the recently-agreed text under Article 4 of the Marrakesh Agreement, which deal with WTO Plurilateral Agreements. Such an inclusion requires a hard-to-achieve consensus among WTO Members, given the explicit opposition by some countries. This raises questions on the path forward towards the incorporation of the outcomes of other JIs, including on e-commerce.