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WTO

The Work Program on E-commerce

The World Trade Organisation (WTO) first launched a framework to support e-commerce in 1998 with the Work Program on E-commerce.

Initial discussions focused on definitions of digital services with respect to other trade and e-commerce issues. Little progress occurred in the 2000s to bring forth formal rules from the Work Program.

With a lack of agreement, key points of contention have not been confronted. Specifically there has been a lack of agreement on how data flows relate to other WTO trade agreements, such as on services (GATS).

This has led to a lack of clarity on existing rules. WTO rules are acknowledged to be mismatched to the internet age and with grey areas very few legal cases have been brought by members related to infringements around digital.

During this period, WTO members biannually renewed a temporary Moratorium on E-commerce in which which they committed to no customs duties on electronic transmissions.

Growing discussions in the WTO

As digital trade has grown, this situation has begun to change (in the 2010s). This was driven driven by the US and supported by tech firms who applied pressure for new rules.

Members currently have varying positions on instigating digital trade rules in the WTO:

Liberalising agendasThe US, supported by countries such as Japan and Australia, with more advanced firms are pushing for stronger rules that protect open digital trade and support their technology leadership

Support for weak rulesThe EU and China support relatively soft rules, They support some aspects of liberalisation, in balance with their own internal policy agendas.

Latecomer nations Digital latecomer countries are split. There are those who think open digital trade rules would attract a growth in global digital investments. There are others who are concerned that WTO rules will reduce ‘policy space’ and their ability to pursue national digital policies.

Developing countries – Some specific countries (such as India) are also opposed to new WTO issues, arguing that negotiations on the WTO Doha ‘development’ round need to be resolved first

Tensions came to a head in 2017 prior to the WTO ministerial in Buenos Aires. In this ministerial, the objective was to move the E-commerce Working Group from discussion to negotiation on rules. Opposition to this move was led by India and the African Group. Momentum also faded with the elections in the US, with President Trump disengaging from the WTO.

The Ministerial concluded with a lukewarm statement for future activities. The renewal of the moratorium was agreed, but with no other progress.

New actions in the WTO

With the failure to move forward on digital trade, a split occurred on how to move digital trade forward in the WTO.

Following the WTO Ministerial, 76 members, including the United States, the EU, and Japan announced in 2019 that they would begin to work in a plurilateral group, now referred to as the Joint Statement Initiative (JSI) on E-commerce.

They have begun discussing rules on e-commerce. A number of large developing countries did not join this grouping.

Alongside the (JSI) negotiations, discussion on the moratorium of e-commerce have grown. There are demands to make the moratorium permanent. But some countries such as India and South Africa have taken the opposite position and are calling for a complete rethinking of the moratorium.