Info Service on WTO and Trade Issues (Oct17/15)
19 October 2017
Third World Network
South countries shoot down proposals for e-commerce negotiations
Published in SUNS # 8555 18 October 2017
Geneva, 17 Oct (D. Ravi Kanth) - A large majority of developing and
least developed countries shot down on Monday (16 October) proposals
from major industrialized and some developing countries for establishing
a "Working Party" or "Working Group" on Electronic
Commerce at the World Trade Organization's upcoming ministerial meeting
in Buenos Aires, several trade envoys told SUNS.
The proposals for a working party or working group are disguised efforts
at starting negotiations for WTO e-com rules.
India, the African Group, Uganda on behalf of the least-developed
countries (LDCs), and several other members severely questioned the
underlying motives of the proponents seeking negotiations to craft
rules in e-commerce without concluding the Doha Development Agenda
(DDA) trade negotiations.
They said that the proposals are aimed at undermining the 1998 work
program so as to deny the "developmental space" for industrialization.
The DDA work program provided the development space to developing
and poorest countries, India, the African Group, and Uganda argued.
In the strongest statement issued by the African Group yet, Rwanda
described the attempts by the proponents to confuse members through
a slew of proposals as grotesque and diabolical, according to trade
envoys, who asked not to be identified.
Rwanda accused the e-commerce proponents - Japan, Russia, Costa Rica,
the European Union, Canada, Australia, Chile, Korea, Norway, and Paraguay
- for undermining the Doha Development Agenda negotiations at Buenos
Aires so that they can start negotiations on e-commerce.
Last week, South Africa's trade minister Rob Davies, during the ministers-only
dinner in Marrakesh, told his counterparts that his country will fight
tooth and nail against the proposals for launching e-commerce negotiations,
according to a trade minister who asked not to be quoted.
The divide over e-commerce between the proponents and the opponents
is unbridgeable at this juncture. The WTO director-general Roberto
Azevedo, during the recent Marrakesh ministerial meeting, said there
are too many wide gaps which are difficult to bridge at this juncture.
On Monday, the WTO's General Council chair, Ambassador Xavier Carim
of South Africa, convened another meeting to prepare the mandate on
e-commerce, particularly for exploring the level of acceptability
for proposals to launch negotiations as well as the extension of the
current moratorium on e-commerce transmissions.
In a restricted Job document, Job/GC/140, on 16 October, several proponents
- the European Union, Canada, Australia, Chile, Korea, Norway and
Paraguay among others - called for establishing "a Working Party"
at the Buenos Aires meeting that "shall conduct preparations
for and carry out negotiations on trade-related aspects of electronic
commerce on the basis of proposal by Members."
The proponents maintained that "the Working Party shall establish
its own procedures and shall report periodically to the General Council."
They demanded continuance of "the current practices of not imposing
customs duties on electronic transmissions until our next session,
which we decided to hold in 2019," according to the draft proposal
obtained by SUNS.
Prior to the latest proposal by the proponents, two other demandeurs
for e-commerce negotiations - Japan and Russia - had circulated their
own respective proposals that also called for establishing a "Working
Japan suggested that "existing WTO Agreements apply to electronic
commerce." Japan indicated that issues such as the free flow
of data without data localization requirements, permanent moratorium
on customs duties, non-disclosure of source code, and prohibition
of forced technology transfer will also come under the purview of
future negotiations as and when they are launched.
Russia, in its proposal, had suggested the possibility of developing
rules in the Working Group, indicating that it could act as a negotiating
In addition, Costa Rica circulated a proposal last week on "E-commerce
for Development Agenda" even though the issues it raised as part
of e-commerce and development are currently examined in the WTO's
Committee on Trade and Development (CTD).
India said it "wants continuation of the existing [1998 e-commerce]
work program" that provides an exploratory and non-negotiating
Proposals to establish a new Working Group at Buenos Aires are clearly
aimed at imposing "a top down approach" as opposed to "bottom
up approach" in the 1998 work program, India said.
India's trade envoy, Ambassador J. S. Deepak, argued that "gains
from e-commerce should not be confused with the likely benefits of
rulemaking in e-commerce," according to a source familiar with
Ambassador Deepak said "negotiations on rules and disciplines
in E-commerce would be highly premature at this stage," according
to the source who spoke to SUNS.
India also linked the extension of the two-year moratorium for not
imposing customs duties on e-commerce transactions with the moratorium
on TRIPS non-violation and situation complaints.
Rwanda, on behalf of the African Group, severely demolished the proposals
circulated by the e-commerce proponents.
The African Group said it "can agree to continue the exploration
of issues under the 1998 Work Program."
"However, we will not agree to change the current structure or
institutional arrangement of the Work Program," the African Group
Even before members explored the e-commerce issues from a trade perspective,
Japan and other members are arguing that "existing WTO Agreements
apply to electronic commerce".
The African Group asked whether the proponents are saying "that
our Schedules of Commitments negotiated in the Uruguay Round automatically
apply to new technologies such as 3D printing, robotics, drone delivery
and Artificial Intelligence, to name a few?"
The African Group said it "objects to this erroneous assumption
by Japan et al, because it has no legal basis in the WTO's framework."
Further, such an approach "goes against the basic principle of
progressive liberalization," the African Group said, arguing
"new business models, new services and new technologies that
did not exist at the time Members' Schedules were negotiated do not
Rwanda reminded members at the meeting that "there still remains
a long paper trail in the WTO of 19 years of unresolved issues pertaining
The African Group said the e-commerce issue had thrown up divergent
views "on the technological neutrality of the GATS, the distinction
between, and application of GATS Modes 1 and 2 in e-commerce, whether
products delivered electronically are services or goods or both, and
the classification of 'new services'."
Without resolving "these issues" which were placed under
the carpet, the proponents are now "advocating for new multilateral
rules on new issues such as e-commerce," the African Group pointed
Rwanda warned that "A Working Group will not replace these systemic
divergences, and these discussions, as per the Work Programme, are
required to take place in the bodies responsible for administering
the relevant Agreement."
The African Group said the proponents made a flawed case "advocating
for new multilateral rules on new issues such as e-commerce."
By suggesting a "false narrative", the proponents for e-commerce
are primarily aiming at "kicking away the development ladder"
as set out in the Doha Development Agenda.
"In our view, the Work Programme has not been tested to warrant
a change in its structure," the African Group said.
It exposed the ignorance of Costa Rica which had tabled a proposal
on "e-commerce for development agenda" when the 1998 work
program clearly mandates members "to examine all trade-related
issues relating to global electronic commerce, taking into account
the economic, financial, and development needs of developing countries."
The African Group said that the Costa Rican proposal is saying erroneously
that "the CTD does not have a mandate to deal with these development
It argued that the exclusion of ITU (International Telecommunication
Union) from the list of organizations that would collaborate with
the WTO is untenable.
"We cannot support the creation of multilateral fora just for
the sake of creating motion when there is neither movement nor value-addition,"
the African Group said.
It urged the chair to "ensure that the draft MC11 text on e-commerce
is agreed in Geneva." It asked the chair to place all their concerns
in his report.
Nigeria supported the proposals from the proponents, breaking ranks
with the African Group, according to participants present at the meeting.
The chair urged the proponents to consult not only among themselves
for harmonizing their proposals but also discuss with their critics
so as to bridge the wide gaps between the two sides.
Ambassador Carim acknowledged that there are wide divergences between
the two sides.
In short, the developing and least-developed countries have exposed
graphically the continued attempts to bury the DDA work program by
major industrialized countries and their allies in the developing
world through "new issues" such as e-commerce, investment
facilitation, and disciplines for small and medium enterprises.
The moot issue, however, is whether the large majority of developing
and poorest countries will stand united at Buenos Aires, or yield
meekly as they did at Nairobi.