TWN Info Service on WTO and Trade Issues (Feb17/14)
21 February 2017
Third World Network
14 developing countries meet DG, push e-commerce
Published in SUNS #8403 dated 16 February 2017
Geneva, 15 Feb (D. Ravi Kanth) - In a coordinated effort with the World Trade
Organization director-general Roberto Azevedo, 14 developing countries on Tuesday
(14 February) called for urgent discussions on four issues concerning
"electronic commerce and development", despite opposition from a
majority of developing and least-developed countries, trade envoys told SUNS.
Trade envoys of the 14 countries who held a meeting with Azevedo on 6 February
pressed for sustained discussions on "trade facilitation and
e-commerce," "infrastructure gaps to enable e-commerce,"
"access to payment solutions," and "online security."
In a non-paper addressed to the WTO's four major bodies - General Council,
Council for Trade in Goods, Council for Trade in Services, Council for
Trade-Related Aspects of Intellectual Property Rights, and Committee on Trade
and Development - on Tuesday, the 14 countries argued that the rapid spread of
e-commerce "opened up new opportunities for businesses in developing
countries, especially micro, small and medium enterprises (MSMEs), by reducing
the cost of doing business, and allowing them to reach a wider market."
The sponsors of the proposal include Brunei Darussalam, Colombia, Costa Rica,
Hong Kong (China), Israel, Malaysia, Mexico, Nigeria, Pakistan, Panama, Qatar,
Seychelles, Singapore, and Turkey.
Citing the changes that e-commerce brought in consumer experience in areas of
media and entertainment, air travel and tourism, and even taxi rides over the
past few years, the sponsors said "E-commerce is the new reality for
businesses today, including in developing countries."
The 14 developing countries, which currently have advanced telecommunications
as well as e-commerce network providers, painted a picture that e-commerce is
expanding rapidly in Asia, Latin America, Africa, and the Middle East.
The sponsors offered some isolated cases such as Sabay.com which introduced an
online gaming company in Cambodia, SMEs such as Gojek and Nhommua.com
respectively in Indonesia and Vietnam, several online payment facilities
(JamboPay, Ozimbo, PesaPal, Yo!Payments Simple Pay) in Africa, MercadoLibre
which is an equivalent of eBay and Amazon in Latin America, Flipcart and
Snapchat in India, and Alibaba in China for underscoring the need to address
e-commerce and development.
Further, e-commerce presents an opportunity for MSMEs to expand beyond their
"own backyards" while lowering the high costs associated with
penetrating foreign markets, the sponsors argued.
"This has allowed non-traditional players, such as home-makers and small
handicraft suppliers, to enter the market and offer their products on the
global marketplace," the sponsors maintained, citing a report by the
American eBay online e-commerce provider.
Quoting a study conducted by the United Nations Conference on Trade and
Development (UNCTAD), the sponsors said "the share of global business to
consumer e-commerce for Asia and Oceania, and Middle East and Africa, are
expected to rise from 28% to 37% and 2.2% to 2.5% respectively from 2013 to
2018. In Latin America, online retail sales are expected to grow at a compound
annual growth rate of 17% between 2014 and 2019."
They urged the members at the WTO to "kick-start discussions and identify
the e-commerce issues of interest and relevance to developing countries."
The sponsors suggested four possible areas for immediate discussions. The areas
(i) Trade Facilitation and E-commerce: Cross-border e-commerce often involve
low value shipments and/or digital transmissions over the internet. Once within
the borders, logistics players also play a big part in ensuring smooth delivery
of products. What can be done to further empower smaller business using
e-commerce and lower their cost of conducting trade?
(ii) Infrastructure Gaps to Enable E-commerce: Infrastructure gaps in
developing countries have posed challenges (e.g. access to broadband) but also
provided innovative opportunities for businesses (e.g. rise of local payment
solutions). Is there a way to better target technical assistance towards
plugging the critical gaps?
(iii) Access to Payment Solutions: Being able to find payment solutions is key
to whether a business will go online. In the absence of secure online payment
services, payment via mobile phones and cash on delivery option have been used.
How can we improve businesses' and consumers' access to more payment options to
better enable them to conduct and access cross-border e-commerce?
(iv) Online Security: Trust is a key factor in determining whether consumers
are willing to engage in commerce. This includes trust in online payment
services, the reputation of the online merchant and even in whether there is
enough legal protection to provide recourse should a transaction go awry. What
can be done to build trust in online transactions and e-commerce and improve
consumer protection? Is there scope for improved cooperation between countries
Significantly, the proposal came close on the heels of a meeting Azevedo held
with the 14 countries as well as other developed countries such as the United
States, the European Union, Switzerland, Australia, and Canada on 6 February.
Brazil, Korea and Argentina also participated in the DG's closed-door meeting,
according to people familiar with the development.
Azevedo, according to a trade envoy who was present at that meeting, had
suggested that the proponents must convince other members about e-commerce and
The DG and the proponents particularly discussed issues such as transparency,
trade facilitation in e-commerce, and consumer protection.
According to the 1998 WTO Work Programme on Electronic Commerce, members are
required to examine "all trade-related issues relating to global
Last year, a large majority of developing countries, including the African
Group, India, Bolivia, Cuba, Venezuela and South Africa expressed sharp concern
over attempts to steam-roll discussions on e-commerce without a negotiating
During the dedicated session on e-commerce on 18 October 2016, Uganda said the
mandate, including the Nairobi ministerial declaration, requires members
"to continue the work under the Work Programme... based on existing mandate
and guidelines and on the basis of proposals submitted by Members in the
relevant WTO bodies as set out in paragraphs 2-5 of the Work Programme... In
addition, the General Council shall take up consideration of any trade related
issue of a cross-cutting nature".
Uganda said members "also need to agree whether those themes fall within
the cluster of cross-cutting; or should be considered within the regular
In its interventions during the designated meetings on e-commerce, the African
Group emphasized repeatedly about "bridging not only the digital divide
but also the knowledge gap that currently exists [in e-commerce]."
Uganda said three things are required in e-commerce. They include "access;
affordability; and availability."
According to the ITU facts and figures for 2016, 75% of the entire population
in Africa is offline, Uganda said.
"Only 20 million households in LDCs have Internet access out of 1 billion
households in the world. Fixed- broadband penetration remains at below 1% in
Africa and among the LDCs; and only five LDCs have achieved the Broad-band
Commission target on affordability," Uganda maintained.
Uganda said "infrastructure and connectivity are another major
issue", as, by early 2016, total international Internet bandwidth had
reached 185,000 Gbit/s, up from 30,000 in 2008.
"Africa has the lowest international connectivity of all regions: there is
twice as much bandwidth per inhabitant available in Asia and the Pacific, four
times as much in the CIS region, eight times as much in the Americas and more
than twenty times as much in Europe," Uganda maintained.
"Therefore, lack of international connectivity is a major bottleneck in
the Internet infrastructure of LDCs," Uganda concluded.
Nevertheless, the director-general and major developed countries along with
their allies in the developing world seem determined to force discussions on
e-commerce regardless of lack of mandate and large opposition, said several