In the World Trade Organisation's (WTO) Public Forum-- the global trade body's largest annual outreach event held last month-- discussions were held as usual on the latest developments in global trade and ways of enhancing multilateral trading system. The theme was 'Trade 2030', which envisages sustainable and technology-enabled trade, and a more inclusive global trading system based on the future technology-driven global commerce, even in the world's least developed countries (LDCs).
On the sidelines of the event, one issue that made most noise was about the proposed e-commerce rules. There were extensive talks, dominated mostly by African civil society groups who termed the proposed rules 'digital colonisation' and opposed negotiations on binding e-commerce rules. The proposed e-commerce rules, according to them, 'would prohibit national regulations for local storage and processing of information, transfer of or access to source code, use of local computer facilities and content in electronic transmissions, and internet service provider liability for uploaded content.'
Experts are of the opinion that the current text of the e-commerce rules also has weak elements on privacy and rights involving online consumer protection, personal information protection, unsolicited commercial electronic messages, conditional access to and use of the internet and open networks, strong state security powers, which allow deviations from the provisions on a self-judging basis, and streamlining actual cross-border commerce through electronic authentication and e-signatures, prohibition of digital customs duties, and international cooperation.
Although there is no disputing that digital trade is the future of global commerce, many LDCs and developing countries are opposed to negotiating rules on e-commerce because, if agreed to, they fear these rules will put many economies in the hands of a largely unregulated private oligopoly. It is also believed by many quarters in the developing world that negotiating WTO rules on e-commerce is being pushed by tech giants like Google, Alibaba, Amazon, Facebook and Apple who control the internet, in order to secure rules that will consolidate their power. These tech giants want unimpeded expansion throughout WTO member countries in order to build scale, quash competition and cement their first-mover advantages. Currently, there are no global inter-governmental rules for the internet, and the rules which exist are made by bodies dominated by powerful states and major corporate players. Therefore, it is feared making e-commerce rules at WTO at this stage would ensure that the first and only rules the major powers allow will be biased in favour of corporate interests.
However, in spite of the concern expressed by the developing world, especially by the African countries, e-commerce rules are in the making-although it remains to be seen whether these are going to be binding on LDCs and developing countries. That global trade bodies other than the WTO are also in the business of framing such rules is clear from some recent statements of the UNCTAD Secretary General Dr Mukhisa Kituyi who called upon the less advanced countries to rise up to the challenges and become major players in the electronic marketplace. "In a world dominated exponentially by electronic trading, if you are not visible on the electronic marketplace, you are non-existent' he said.
In fact, since mid-last year, e-commerce has been set to be a subject of hot debate when some proposals were initiated for the WTO to begin new work on e-commerce. By now, there are about a dozen proposals on the table, with some WTO members vigorously pushing for the negotiation of new global trade laws on digital commerce, and some other members firmly against the move.
The crux of controversy lies in the interrelationship between consumers, civil society, businesses and governments. Critics of the proposals argue that introducing new rules at this moment will be hugely detrimental to developing countries. It could facilitate the dominance of current global players, at a time when technological transformation is still in full swing and many developing countries lack their own adequate legal structures for digital trade. New binding rules risk exacerbating inequality between countries by extending protectionism in favour of companies based in rich countries via patents and copyrights for technologies and content. New rules could hinder development by preventing developing countries from requiring that companies operating within their border make use of local content or inputs. From a consumer perspective, critics argue that new rules would threaten personal privacy and data protection, since they would make it easier for companies to transfer data cross border -- potentially without consumers' knowledge or consent.
It is often advocated that facilitating trade and investment in digital infrastructure is critical if developing countries are going to participate in and benefit from e-commerce. But before thinking about the synergies between e-commerce and trade and investment facilitation, it is crucial to focus on some key questions:
- What are the needs and priorities of developing countries' digital infrastructure;
- how developing countries are facilitating investment in digital infrastructure and what additional steps might be taken;
- what role public-private partnerships can play in building digital connectivity;
- how synergies between e-commerce and investment facilitation can be harnessed; and,
- how the WTO with more coherent trade and investment policies can contribute to increasing digital connectivity in developing countries.
It is thus important that the existing trade, investment and financial regimes in many developing countries are harmonised and made coherent with digital connectivity before framing binding rules.
