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ICs intensify efforts on e-commerce negotiations at WTO

Industrial countries are persisting with a contentious push for negotiations at the WTO to craft rules on electronic commerce.

by D. Ravi Kanth

GENEVA: Major developed countries have decided to intensify their efforts for launching negotiations on several controversial issues in electronic commerce at the World Trade Organization’s eleventh Ministerial Conference in Buenos Aires this December, trade envoys told the South-North Development Monitor (SUNS).

Despite the setback suffered by these countries at a recent meeting of trade officials from the G20 major economies – after India and South Africa firmly opposed a concerted move by Australia to include language for negotiating e-commerce rules at the WTO – fresh efforts are being mounted all over again to bring the issue back, according to a trade envoy who asked not to be quoted.

Australian proposal

At the meeting of the G20 sherpas on 2 March in Berlin, Australia along with Canada and Singapore had insisted on including language in the outcome document of this year’s G20 summit for negotiating rules/disciplines on e-commerce at the WTO.

A week before the Berlin meeting, Australia had circulated a two-page non-paper in which it listed the issues that must be incorporated in the G20 leaders’ statement from their summit later this year. The non-paper, reviewed by SUNS, set out issues ranging from declaring permanent a prohibition on customs duties on electronic transmissions, to a list of “in-principle actions” that governments could take to support digital frameworks.

Australia argued how G20 countries must play an important role in “improving the environment for digital trade – by identifying ways to lower the cost of digital trade for business and consumers, enabling more reliable and resilient digital frameworks and networks, and building greater confidence in e-commerce and ICT [information and communications technology] systems.”

It called on G20 members to acknowledge the need for enabling “greater participation in the digital economy, including micro, small, and medium enterprises (MSMEs) and consider how to support digital trade in a development context.”

The G20 initiatives, according to Australia, must include “trade facilitation through improved cooperation on compliance” such as G20 countries agreeing in principle to “international cooperation on non-discriminatory compliance requirements relating to digital trade.”

Canberra argued that “G20 cooperation on WTO-consistent compliance requirements will strengthen the international e-commerce frameworks and facilitate greater confidence and predictability in the trade environment for consumers, producers and governments and allow sustainable improvements in trade facilitation outcomes.”

For example, Australia suggested, “cooperation on compliance in transaction standards would improve reliability and consumer confidence in goods and services acquired through digital means.”

Australia urged the G20 to “recommend that the WTO make the e-commerce moratorium permanent” as “the moratorium on customs duties is a political undertaking by all WTO Members not to impose tariffs on electronic transmissions.”

The current moratorium, which has been in place since 1998, will expire in December 2017 unless renewed by the WTO Ministerial Conference in Buenos Aires.

“The permanent moratorium would increase certainty and facilitate the continued growth of e-commerce, including MSMEs,” Australia maintained.

On “flow of data, privacy and security,” Australia has urged the G20 countries to take a list of “in-principle actions that governments could take to support digital frameworks” such as “promoting the flow of information across borders, respect for privacy frameworks and data protection, intellectual property rights and security.”

The G20 must take next steps for policy options relating to “cross-border data flows and associated cyber security, privacy and consumer protection risks, localization barriers, and the threats to a reliable and resilient digital environment,” Australia emphasized.

Relevant international organizations such as the WTO must consider policy options and their impacts, including on MSMEs, according to the non-paper.

The G20 must agree on a set of principles that “go beyond the Trade Facilitation Agreement to guide Members on the application of paperless trading, electronic documentation and e-signatures and authentication,” Australia argued.

“Such principles could inform broader WTO discussion on the development of future commitments in this area,” Canberra maintained.

Australia also urged the G20 to continue to encourage ratification of the Trade Facilitation Agreement by as many WTO members as possible and support WTO members taking on commitments, even those which are required only on a best-endeavour basis.

Rejection

At the Berlin meeting of the G20 sherpas, Australia along with Canada and Singapore pressed for including the language as set out in the non-paper.

However, India and South Africa firmly rejected the Australian move on the grounds that negotiating “rules” for e-commerce at the WTO is outside the trade body’s 1998 work programme on this issue.

Both India and South Africa maintained that the G20 must not suggest language that is well outside the current work programme, according to people who attended the meeting.

The final compromise agreed by officials at the meeting suggests that G20 members will constructively engage in the discussion on e-commerce at the WTO with the eleventh Ministerial Conference in view, as suggested by Singapore, according to people familiar with the development.

Under the Nairobi Ministerial Declaration of 2015, WTO members are required to report progress on the e-commerce work programme as agreed in 1998.

The Australian non-paper, according to participants, almost reflected the issues raised in the WTO secretariat’s presentation at a meeting of the G20’s Trade and Investment Working Group in February. The secretariat made a PowerPoint presentation on e-commerce in which it argued for concrete outcomes at the WTO.

In the slide on “further discussions towards a multilateral outcome,” the WTO secretariat official concerned made the following bullet points:

(i) Transparent and inclusive discussions – Lay the ground for advancing work multilaterally.

(ii) Consider adopting general principles/best endeavour provisions on e-commerce.

(iii) Binding principles/obligations could be considered – TFA [Trade Facilitation Agreement] approach – Flexibilities; TA [technical assistance] and CB [capacity building]. Greater coherence; certainty; consumer confidence.

At an informal heads-of-delegation meeting at the WTO on 23 February, India denounced the WTO secretariat for presenting its views on e-commerce, which “remains a highly contentious area in the WTO.”

“We wonder what gives the WTO Secretariat the authority or the mandate to propose next steps or multilateral outcomes on subjects on which discussions have not even begun in the WTO,” India said.

More importantly, “were the contents of these presentations [on investment facilitation as well as e-commerce] discussed by members and was there a consensus on the propositions contained therein that the WTO should be encouraged to launch a dialogue on strengthening trade and investment policy coherence or that there should be further discussions towards a multilateral outcome on e-commerce,” India asked.

The Indian representative said the presentations by the secretariat “seem to convey [to] my delegation that the WTO Secretariat hold a brief for certain constituency of members thereby raising a question on its impartiality and international character as required in the Agreement Establishing the WTO.”

Against this backdrop, the developing countries must stay on guard against efforts made by the likes of Australia and the WTO secretariat to bring in e-commerce through the backdoor at various fora, said a trade envoy who asked not to be quoted. (SUNS8420)                   

Third World Economics, Issue No. 634, 1-15 February 2017, pp12-13


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