US, EU foisting e-commerce agenda at WTO amidst disarray in South ranks

With the developing countries not putting up a coordinated front, the US and the EU are ratcheting up focus on electronic commerce at the WTO.

by D. Ravi Kanth

GENEVA: The continued disarray and lack of coordination among developing and least-developed countries in advancing their core developmental concerns in the Doha Work Programme is enabling the United States and the European Union along with their allies to foist the electronic commerce agenda at the WTO, trade envoys told the South-North Development Monitor (SUNS).

Under the pretext of development and “inclusiveness,” which have been hollowed out in the unfinished Doha Development Agenda trade negotiations since 2001, the WTO Director-General Roberto Azevedo along with the US, the EU and several other countries are making a collective/concerted effort to ram through the e-commerce agenda without completing work on the remaining issues of the Doha Work Programme, according to several trade envoys who asked not to be quoted.

Azevedo is ably supporting the US and the EU for the launch of e-commerce negotiations at the eleventh WTO Ministerial Conference in Buenos Aires next year even though the subject is being currently negotiated in the closed-door meetings of the plurilateral initiative on a Trade in Services Agreement (TiSA) and the Transatlantic Trade and Investment Partnership (TTIP) agreement, trade envoys said.

Despite lack of progress and consensus among WTO member states on the e-commerce work programme that has been discussed in different WTO bodies since 1998, a concerted effort is now being made to bring e-commerce under the direct purview of dedicated sessions being chaired by Panama’s trade envoy Ambassador Alfredo Suescum.

He is going to discuss different themes of e-commerce notwithstanding the fact that there is no mandate for a combined/comprehensive discussion.

Suescum, for example, is going to discuss e-commerce and development in the dedicated session on 18 October, knowing full well that there is no mandate to discuss the issue in the dedicated session.

E-commerce proposal

In a separate development concerning e-commerce, the US and the EU along with their allies have insisted that the WTO secretariat include a section “dedicated to electronic commerce” in each WTO member’s trade policy review report.

At a time when there is no clarity on what constitutes e-commerce and how it needs to be addressed in different WTO bodies, a group of countries – the US, the EU, Canada, Hong Kong-China, Japan, New Zealand, Norway, Singapore, Switzerland and Chinese Taipei – circulated a restricted proposal on 10 October prescribing how trade policy review reports must monitor e-commerce commitments.

The proposal says: “Electronic Commerce has been an important element of the work of the World Trade Organization since Ministers adopted the Declaration on Global Electronic Commerce in May 1998.”

“Since that time,” according to the sponsors of the proposal, “the evolution of the internet and digital technology had a transformative impact on the global economy and the nature of international trade.”

Further, “WTO Members, both developed and developing, have been making efforts to address the public policy challenges that this transformation presents, while also seeking to fully realize its benefits,” the sponsors argued.

“Recently, a number of Members have made submissions to the General Council seeking substantive discussions on the role of trade policy in this equation,” the 10 countries maintained.

Since “trade policy and trade monitoring reports already look comprehensively at Members’ trade and investment regime and trade policies and practices by measure,” it is important to examine in these reports how members are engaging in electronic commerce, the sponsors said.

“However, restrictive measures in the digital space are increasingly common and are not well understood or captured by the existing reviews,” claimed the 10 countries.

Therefore, “in order to improve the information available to Members regarding the nature and prevalence of digital measures that are being adopted and to better inform Members on the trade implications [of] such measures, we propose to explicitly examine measures impacting electronic commerce in the TPRM [Trade Policy Review Mechanism]”.

Pushing the e-commerce agenda

In the normal course, such a proposal could not have been conceived, as the WTO work programme of 1998 remains far from any convergence. Yet, the 10 countries are creating an unusual situation in foisting the e-commerce agenda, according to several developing-country trade envoys who asked not to be quoted.

The Director-General and major industrialized countries, for example, made an extraordinary effort in facilitating more than 20 sessions on e-commerce at the WTO’s Public Forum that was held in September.

Azevedo also campaigned relentlessly for digital trade/e-commerce during his recent visit to Washington. In his speech on “How to make trade an engine of growth for all” at an IMF-World Bank seminar, Azevedo spoke about four priorities:

l how to better support small and medium-sized enterprises (SMEs);

l how to harness the power of digital trade to foster inclusive growth;

l how to lower the costs of trading (including in services); and

l how to reduce subsidies that harm the environment – like those that lead to overfishing.

Three out of these four priorities – SMEs, digital trade and fisheries subsidies – are at the core of the US trade agenda.

The Director-General, however, is conspicuously silent on areas which are inimical to the US trade agenda. Issues such as the drastic domestic support reduction commitments in agriculture set out in the 2008 revised draft modalities; the elimination of zeroing methodology in anti-dumping as demanded by more than 160 countries; and the harmonization of non-preference MFN rules of origin for textiles, leather and other products, which ought to have been concluded by 1998 and inaction on which is causing a major bottleneck in global trade for the developing and poorest countries – all did not figure in Azevedo’s thundering speech on “How to make trade an engine of growth for all.”

The Director-General’s emphasis on harnessing the power of digital trade to foster “inclusive growth” echoes what Microsoft has proposed in 78 public policy recommendations in 15 categories under its “A cloud for global good” initiative.

“Most intriguingly, Microsoft wants the computing clouds to be inclusive,” The Economist magazine wrote in its 8 October edition.

“We really need to think about public policy that connects technology with inclusive growth,” says Brad Smith, Microsoft’s president and chief legal officer.

The slogans of “global good” and an “inclusive cloud” by Microsoft and “harnessing the power of digital trade to foster inclusive growth” by Azevedo all have a familiar ring of trying to win people’s trust at a time when they have become the target of a global backlash against trade and globalization.

Also, at a time when the trans-Atlantic trade partners are still far from nearing consensus on e-commerce and given the EU’s growing fears about data flows and localization requirements proposed by the US, there is uncertainty as to how the major developed countries are going to use the WTO to advance their core interests while turning their back on genuine “developmental” priorities of developing and poorest countries.

Despite these disturbing developments at the WTO and outside in plurilateral and bilateral negotiations, developing countries have not got their act together in pressing for their unaddressed issues in the Doha Work Programme to be resolved.

There is no coordination among developing countries for adopting common positions on the outstanding Doha issues or on new issues such as e-commerce being foisted by the major developed countries in collusion with the Director-General, said a trade envoy who asked not to be quoted. (SUNS8332)             

Third World Economics, Issue No. 626, 1-15 October 2016, pp10-11