Panels: WTO Could Play Crucial Role In Challenges Facing Global Digital Trade

Two panel discussions held at the recent World Trade Organisation (WTO) Public Forum addressed the challenge of modernising global trade rules for the digital age and the role the WTO could play in this process.

The WTO Public Forum took place from 30 September – 2 October.

The discussions between speakers from industry, think tanks, and government representatives emphasised how disruptive digital technologies, such as cloud computing, 3D printing, big data, virtual currencies and the Internet of Things, are profoundly revolutionising the economics of global trade. By significantly lowering the cost of entering the global economy, entrepreneurs and small businesses can become multinational exporters and global brands.

However, there are still a number of barriers faced by businesses engaging in digital trade, such as the digital divide between developed and developing countries, and constraints placed on accessing and moving customer data across national borders.

There was a consensus amongst the panellists that trade agreements must begin to take account of the fundamental changes wrought by digitisation. They took the view that the WTO could play a role in coordinating regulation and standard-setting globally on issues such as data protection, enabling access to financial services and reducing the cost of international transportation.

Digital Economy Calls for New Approach to Policy-Making

At the panel event organised by the National Foreign Trade Council (NFTC), entitled, “A Policy Checklist for the Global Digital Economy,” Samuel Laurinkari, senior manager EU Government Relations at eBay, explained how trading data collected by eBay demonstrates that the new model of trade facilitated by technology is highly inclusive and global.

Laurinkari stated that 93 percent of European small businesses selling on eBay export, and that 40 percent of these businesses export to four continents or more. He described how the largest sellers on the platform are often not from “economic hotspots”, for instance in the United Kingdom they are not based in London, but rather in more rural areas around Manchester.

Sarah Thorn, senior director for international trade at Wal-Mart, emphasised how the digital economy is democratizing access to the global market as new technologies provide small producers the opportunity to showcase their goods to millions of customers around the world.

This inclusive nature of the digital economy has the potential to significantly shift the discourse around trade, according to Andrew Crosby, managing director for communications and strategy at the International Centre for Trade and Sustainable Development (ICTSD).

At the panel even organised by the ICTSD, “Making Digital Trade Work for All: Seizing Opportunities, Addressing Challenges”, he stated that an interesting policy dialogue is developing over who can advocate for trade and the role that new actors, such as eBay, can play in this process.

Crosby asserted that the fact that Uber enlisted more than 118,000 supporters in its campaign against tighter regulations by Transportation for London (TfL), on 1 October, is an example of how the key actors in the debate over trade are changing, and the significance this could have if consumers started to advocate for a certain forms of trade at an international level.

The new dynamics of policy-making in the era of the digital economy were considered by Alvaro Cedeno Molinari, Ambassador of Costa Rica to the WTO, at the NFTC event. He stated that policy developments were failing to keep up with the rapid speed of technological advances, and just as Costa Rica was able to “leapfrog” certain generations of technology, the same should be done in the field of policy-making.

He elaborated by stating that policy-makers should be looking to the future and considering the challenges that technological advances will pose in 2030 and work to address these in order to “catch up”.

Crosby at the other event voiced similar concerns over the policy world’s inability to match the speed at which the internet and the digital realm are moving. He stated that whilst governments currently have a chance to intervene, they “won’t have forever.”

Structural Barriers Must Be Overcome

Arancha Gonzales, executive director of the International Trade Centre (ITC), at the ICTSD event stated that whilst e-commerce represents huge opportunities for small and medium enterprises (SMEs) across the globe as regards reducing poverty and accelerating development, there remains a number of structural barriers preventing SMEs from entering the global market.

She cited complex and inhibitory financial regulations in African countries, “soft infrastructure” such as the cost of international transportation, and the digital divide which goes beyond providing individuals with internet access but also teaching them how to use it productively, as major issues to overcome.

Michael Kende, chief economist of the Internet Society, at the ICTSD event, elaborated on the challenges posed by the digital divide, stating that only 40 percent of the world has access to the internet, meaning that the majority of the world’s population is currently unable to engage in digital trade.

He highlighted that getting individuals to partake in the digital economy is not simply a matter of access, but also necessitates the development of locally relevant content to incentivise more people to come online.

Gonzales stated that digital trade “is a tale of two stories” but not between developing and developed countries. Rather, it is between countries which have understood the potential benefits of digital trade and are working to tackle the barriers that small and medium-sized enterprises face in “going digital”, and those who have not.

Hozuk Lee Makiyama, director of European Centre for International Political Economy (ECIPE), echoed this sentiment at the ICTSD event. He asserted that if we consider the countries which have most benefited from digitisation, it is not a question of rich or poor nations. Rather, it is those who have successfully regulated the telecommunications and financial services, de-regulating them to increase competitiveness, who have grown the most through digitisation.

Global Agreement on Trade-Related Data?

Makiyama explained that the nature of trade has begun to to change, becoming less centred on the movement of physical goods across borders and more focused on the movement of data. In this context, maintaining open cross-border flows of data and being aware of the dangers of data localisation provisions is crucial.

He reflected on the need to reach an agreement over this, as well as on developing a common way to secure data with minimum standards of securitisation.

Furthermore, he expressed concern over data balkanisation and mercantilist measures introduced by national governments regarding the storing and accessing of customers’ data. He stated that just as the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) set out some basic concepts for the protection of intellectual property, a similar kind of trade-related agreement on data needs to be reached.

The significance of reaching a global agreement over data was similarly emphasised by the panellists at the NFTC event.

In the document produced by the NFTC in collaboration with its member companies, entitled, “A Policy Checklist for the Global Digital Economy”, the NFTC states that governments should maintain policy frameworks that “ensure the open global flows of information while regulating appropriately for the public good.” Moreover, they suggest that the WTO can “coordinate regulation and standard-setting across issues such as privacy and cyber security.”

Marianna Drake is an intern at Intellectual Property Watch and DiploFoundation. She has an LLB Honours in Law from King’s College London where she developed an interest in information technology law, internet governance and internet related intellectual property issues.

 

Image Credits: European Commission