The expansion of the digital economy has transformed the way we produce, consume and do business. Electronic commerce (e-commerce) — the sale or purchase of goods or services ordered over computer networks or online platforms — is a significant segment of the digital economy. With the rapid expansion of e-commerce, increasing calls were made for common rules in the framework of the World Trade Organization (WTO) for governing cross-border e-commerce in goods and services. Such calls were based on the perception that the multilateral trade rules that were built upon traditional forms of trade prevalent in the last century could not adequately address opportunities and challenges associated with e-commerce.
The launch of the Joint Statement Initiative (JSI) negotiations on e-commerce among a group of WTO members in 2019 was a significant trade policy development. Participation of a diverse group of WTO members with markedly differing policy preferences, contrasted with the non-participation of a large number of developing countries, in the midst of rapidly evolving digital ecosystems, business models and regulatory requirements, point to the highly complex nature of the negotiations. The negotiations would require finding a delicate balance in reconciling different regulatory practices and priorities across countries with respect to such sensitive public policy areas as privacy, personal data protection, competition, consumer protection and cyber security, as well as industrialization objectives for the digital economy.
One key question that confronts trade negotiators is what negotiated outcome would allow developing countries – both participant and non-participant – to harness potential benefits of e-commerce for sustainable development. The digital divide is still significant within and among countries, and many developing countries are yet to develop their own national policy frameworks to support their ability to harness the evolving digital economy.
Whether and how the outcome of the JSI negotiations should be multilateralized remain key questions that need to be addressed. Defining the JSI outcome as a plurilateral agreement or a regional trade agreement (RTA) does not appear to settle the institutional standing of the future e-commerce agreement. Procedurally, multilateralization, and agreement for a plurilateral agreement within the WTO framework, would require consensus, including from those WTO members that have opted not to participate in the negotiations.
In this connection, there is a need for careful consideration of the implementation mechanisms that would facilitate greater participation and possible future multilateralization of any negotiated outcome. Among the built-in mechanisms that could facilitate the gradual implementation are modulated commitments, so that developing countries could gradually assume a higher level of commitments in differentiated time frames. Some transitional implementation mechanisms, such as a scheduling approach of the type used in WTO’s Trade Facilitation Agreement (TFA), which allows parties to take into account individual countries’ implementation capacities, capacity-building support and capacity acquisition, might provide useful lessons.
The TFA-type implementation mechanism would not substitute the need for adequately defining the scope of the agreement and designing the content of the rules. As some proposed rules are novel issues for national regulatory systems and for the multilateral trading system, there is a need to carefully assess the development implications of internationally legally binding commitments which may constrain countries’ policy options. Additionally, if rules are warranted, how they can be designed to best cater for individual countries public policy and development needs should be adequately addressed.
What is at Stake
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