TWN Info Service on WTO and Trade Issues (May20/09)
7 May 2020
Third World Network

COVID-19: Attempts underway at WTO for support on trade-related measures
Published in SUNS #9115 dated 7 May 2020

Geneva, 6 May (D. Ravi Kanth) – Attempts are underway at the World Trade Organization to drum up support for reducing tariffs on goods to almost zero, speeding up the e-commerce negotiations to have digital trade rules for free data flows and liberalization of online payments, as well as doing away with export restrictions.

These attempts are being made under the pretext of fighting the Covid-19 pandemic, according to some trade envoys.

In a restricted document (WTO/Air/GC/28) issued on 5 May, WTO director-general Roberto Azevedo informed members that the scheduled General Council meeting on 15 May is to share “information and exchange views on Covid-19 trade-related measures.”

Earlier, the WTO General Council (GC) chair, Ambassador David Walker from New Zealand, informed members last week that the GC meeting on 15 May will exclusively discuss Covid-19 related measures.

Significantly, ahead of the GC meeting on 15 May, the WTO Secretariat on 4 May has issued an eight-page document, titled “E-commerce, Trade and the COVID-19 Pandemic”, under its own responsibility.

The WTO Secretariat document listed a range of trade measures, highlighting e-commerce-related restrictions as well as the need for addressing restrictions relating to technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures.

Interestingly, the Secretariat’s Note came on the heels of meetings convened by the World Economic Forum, the International Chamber of Commerce, and the US-based National Foreign Trade Council over the past five days.

“The growing use of e-commerce and digital technologies during the pandemic as highlighted by the WTO Note brings the importance of policy space in WTO e-commerce rules to the forefront, which the Note fails to mention,” said an analyst on e-commerce negotiations at the WTO.

“Developing countries will need to build their infant digital industries, protect their digital startups and build data processing skills,” the analyst said.

Prior to the WTO Secretariat’s paper, New Zealand and Singapore had called for elimination of tariffs on a range of goods, lifting of export restrictions, removing non-tariff barriers on various products, and expediting and facilitating the flow of essential goods.

“The Participants will endeavour to expedite the release of such products upon arrival including adopting or maintaining procedures allowing for submission of import documentation and other required information, including manifests, in order to begin processing prior to the arrival of products,” New Zealand and Singapore argued in their proposal.

Further, the “participants will endeavour to abide by the World Health Organization International Health Regulations (IHR) to allow free pratique to cargo ships – i.e., the permission to enter a port, discharge or load cargo or stores,” the two countries proposed.

On 5 May, a group of developing and developed countries at the WTO have vowed that they will lift any trade- restrictive measures imposed in response to the COVID-19 pandemic.

Underscoring the importance of keeping open the supply chains and intensified cooperation between the WTO and other international organizations in support of a coherent response to this and future health crises, the 42 signatories to the statement urged the WTO to initiate work “on concrete actions aimed at facilitating cross- border flows of vital medical supplies and other essential goods and services, including through the application of best practices and simplified procedures and through further trade opening.”

The signatories said they “will also support continued efforts to reform the WTO so that it is as effective as possible.”

The signatories to the statement include Afghanistan, Australia, Barbados, Benin, Cambodia, Canada, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Guyana, Hong Kong-China, Iceland, Israel, Jamaica, Japan, Kenya, Korea, Kuwait, Liechtenstein, Madagascar, Mauritius, Mexico, Moldova, Montenegro, Nepal, New Zealand, Nigeria, North Macedonia, Norway, Peru, Saint Lucia, Saudi Arabia, Singapore, Solomon Islands, Switzerland, Ukraine, United Arab Emirates, the United Kingdom and Uruguay.

At a time when countries are struggling to fight the ravaging Covid-19 pandemic that has claimed more than 250,000 lives and over 3.6 million Covid-19 cases around the world, the WTO note has emphasized addressing the TBT and SPS measures.

The WTO Secretariat’s document on “e-commerce, trade and the Covid-19 pandemic” has listed the following points:

1. The enforcement of social distancing, lockdowns and other measures in response to the COVID-19 pandemic has led consumers to ramp up online shopping, social media use, internet telephony and teleconferencing, and streaming of videos and films.

2. This has resulted in spikes in business-to-consumers (B2C) sales and an increase in business-to-business (B2B) e-commerce. The increase in B2C sales is particularly evident in online sales of medical supplies, household essentials and food products.

3. Demand has also increased for internet and mobile data services. The network capacity and spectrum to accommodate the shift to online activities has urgently had to be adapted by both operators and governments. Demand has fallen, however, for certain services with a large online component, such as tourism services.

4. E-commerce for goods and services trade has been adversely impacted by the same factors that have caused disruption in supply and demand overall. Such disruptions have resulted in delivery delays or outright cancellation of orders.

Several other e-commerce-related challenges have arisen or been further amplified during this pandemic. These include price gouging (i.e. increasing prices to unreasonably high levels), product safety concerns, deceptive practices, cyber-security concerns, the need for increased bandwidth, and development-related concerns.

5. The pandemic has highlighted the glaring need to bridge the digital divide, both within and across countries, given the central role the digital economy has played during the crisis. Many traditional obstacles have been accentuated and have continued to hamper greater participation in e-commerce activities by small producers, sellers and consumers in developing countries, particularly in least-developed countries (LDCs). This has underscored the need for efficient and affordable information and communications technology (ICT) services, such as telecommunication, computer and other IT services and emerging technologies.

6. Governments have adopted new measures, and the private sector has also acted, to respond to and ensure that e-commerce can help to alleviate some of the challenges faced in combatting the virus. These have included increasing network capacity, offering expanded data services at little or no cost, lowering or scrapping transaction costs on digital payments and mobile money transfers, improving delivery services and other logistics, using digital tools to enforce measures and disseminate information, promoting telehealth services, and leveraging ICT for surveillance.

7. The global nature of COVID-19 and its impact on e-commerce may encourage strengthened international cooperation and the further development of policies for online purchases and supply. The pandemic has made it clear that e-commerce can be an important tool/solution.

8. This information note, prepared by the WTO Secretariat on its own responsibility, is without prejudice to the positions of members or to their rights or obligations under the WTO. The measures/examples/issues mentioned are illustrative only and not exhaustive. The WTO Work Programme defines “electronic commerce” as the production, distribution, marketing, sale or delivery of goods and services by electronic means.

9. For consumers: E-commerce can also support small businesses and, by making economies more competitive, be an economic driver for both domestic growth and international trade.

10. The pandemic has highlighted the importance of digital technologies in general, but also several vulnerabilities across the world. The resulting experiences and lessons are relevant to various discussions in the WTO, including those on electronic commerce, which could benefit from looking at greater international cooperation to facilitate the cross-border movement of goods and services, narrow the digital divide, and level the playing field for micro, small and medium-sized enterprises (MSMEs).

These developments, according to people familiar with the proposals, clearly pose a challenge to the developing countries who are being subtly told to reduce tariffs and also bind them, as well as engage in strengthening information technology products (by binding them) at zero level, and also start e-commerce talks to have digital trade rules, particularly free data flows and liberalization of online payments.

Amid these developments, US Republican Senator Josh Hawley (R-Mo) has called for abolishing the WTO in an op-ed in the New York Times on 5 May.