At the 11th Ministerial Conference of WTO, the US blocked a permanent solution on government stockholding for food security purposes, India and developing countries toughened its stand on new issues including e-commerce and investment facilitation for digital trade.

Civil society organisations — including development advocates, consumer and environmental groups from developed and developing countries — issued a statement calling on governments to reject World Trade Organization (WTO) talks on e-commerce.

The issues with such a new agenda on digital trade are:

• There are fears that policy would severely constrain the policy space of countries to develop their economies in the future.
• It would accelerate the global disadvantaging of workers and small enterprises in all countries vis-à-vis large corporations that characterizes the current global economy
• India fears that the new global e-commerce rules could provide unfair market access to foreign online retail firms, hurting the rapidly growing domestic start-ups.
• E-commerce entered the WTO in 1998, when member countries agreed not to impose customs duties on electronic transmissions, and the moratorium has been extended periodically.
• Many countries have made submissions on various aspects of digital trade such as cross-border data flows, server localisation, technology transfer, source code, consumer protection, intellectual property rights and trade facilitation aspects of e-commerce.
• Threats to economic sovereignty and future development prospects from premature digital liberalisation will be greatly amplified if the rapidly evolving digital economic space is governed by rules that were developed by transnational corporations (TNCs) for their own profit-making around the world.
• A key demand by the developed countries is to make permanent the current ban on customs duties on global electronic transactions which were suspended in 1998.
• India is still sceptical about previous WTO deal on the Information Technology Agreement, under which it agreed to abolish tariffs on hardware, squeezing the domestic electronics manufacturing industry.
• India has maintained that e-commerce per se may be good for development but it may not be prudent to begin talks since many countries don’t fully understand the implications of negotiating binding rules.
• With rapid developments in manufacturing through 3-D printing, absence of customs duty could have severe adverse impact on the domestic manufacturing sector.

Way forward:

• Transforming the global trading system WTO so that it could promote shared prosperity among all the countries.
• The much wanted need around the world is structural transformation which is a jobs-and-development-focused digital industrialisation strategy.
• Digital industrialisation indicates the need for investment in countries’ technical, legal and economic infrastructure and policies to develop and support domestic digital businesses and platforms and build capacities to use domestic data in the public interest.
• To strategically promote domestic MSMEs including through technology transfer and national data use frameworks.
• To ensure universal benefits of the digital economy through full employment policies.
• To ensure proper taxation and investments to close the digital divide.
• To advance consumer welfare and privacy through enforceable consumer protection measures.
• To ensure public interest regulation of the digital economy and sound competition practices and other pro-development strategies

Conclusion:

Domestic policies should be developed with appropriate stakeholder input, as well as through regional integration to accomplish the above. Policymakers require sufficient policy space to do so. Status-quo on e-commerce should be maintained till developing countries understand what is at stake in the area of global e-commerce rule-making.