Skepticism On Global Trade Arises Even As ‘Potential Exists To Expand Commerce Internationally’

A lot of skepticism about global trade has arisen just at a time when there is the potential to involve large swaths of the population who were previously not able to access the international exchange of commerce.

This is the view of Andrew Crosby, managing director of the International Centre for Trade and Sustainable Development (ICTSD), who was moderating a 28 September panel discussion at the 5th World Trade Organization Public Forum.

The forum is an annual event that brings together stakeholders and members of the public to discuss trade issues, with the focus this year on inclusive trade and much discussion centring on e-commerce and digital trade.

“The New Landscape of Inclusion in Digital Trade,” was the topic, and Crosby asked, “How can trade policy frameworks ensure that the digital economy lives up to its promise of greater inclusion?”

“This is a vital question for international and national policymakers who seek to harness the digital economy and to mobilise development objectives such as the engagement of SMEs and women,” he said.

He noted a picture he had on his display called Techno Brand which was the logo of a startup East African company that began as a community training center in Tanzania and has now become a vendor of back office services all over Africa.

“We are being challenged by understanding how trade practices can benefit all of us,” Crosby said, noting that enabling environments differs between countries.

Enabling Environment

“If your enabling environment is well-developed, you have a much better greater potential to take advantage of things we think of as digital,” said Crosby. He named the lowering of barriers, the right regulations that enable domestic markets and international operability.

Kati Suominen, founder & CEO of Nextrade Group and founder and chairwoman of TradeUp Capital Fund, who had made a keynote speech on the opening day, said she is often asked what is inclusive trade.

“Inclusive is trade for all and by all people. It is really a world trading system where anybody can sell to anybody anywhere, at any time. It is a world where garage sales can be global, oftentimes by virtue of ecommerce and this will be even more so the case, now that three billion new people are coming online by virtue of getting smart phones over the next five years,” she said.

“We have a line of sight to this world where anybody,” can have the capacity to take part in e-trade while she observed that challenges remain.

Suominen noted research shows that companies that sell online are much likelier to engage in trade and also are more likely to be productive. She cited research from Vietnamese companies that sell online, to back up this notion.

She said online selling is a great booster for trade, and trade by SMEs (small and medium-sized enterprises).

Marcela Paiva Véliz, a counsellor at Chile’s mission of Chile, said, “Intellectual property and development are not a magic wand.”

“When the Marrakesh deal [Marrakesh Agreement Establishing the World Trade Organization] was signed in 1994, less than one percent of the global population was connected to the internet, that is somewhere around 25 million people,” said Véliz.

Still, she said, there are places where there is no access to the internet, with some 40 percent of the world’s population not having access to it at a time people are accessing by mobile phones more and more. Technology and broadband are need to enable an IP environment, she asserted.

“IP rights need to have a framework that does not in itself become a barrier to legitimate trade,” said Véliz, stressing that development needs to be an objective, and least-developed countries (LDCs) need to have maximum flexibility.

“The multilateral context can strengthen commitment and through this reduce tensions,” she said, noting, however, that a lack of clarity on IP can be a barrier to inclusiveness.

“The protection of IP is important for creativity and development,” said Véliz, while a lack of clarity on it can hinder innovation. In different countries, what is in public domain is not always clear.

Don McDougall, a counsellor at Canada’s mission in Geneva, looked at how Canada, a developed country, is ensuring that digital trade promotes inclusion. He noted that 88 percent of Canadians are connected to the internet and that 96 percent of households have a broadband coverage of 5 Mbps.

He said Canada is connecting rural and remote communities to urban economies and international trade.

More significantly, McDougall explained that the unemployment rate for ICT immigrant professionals in Canada is 2.7 percent while it is 7.2 percent for the total immigrant population.

And when it comes to SMEs, he cited 2013 data from eBay that said 99.5 percent of “technology-enabled small businesses” in Canada exported, against 10.1 percent of all SMEs.

The WTO has many existing tools to facilitate e-commerce he said, citing the ITA (Information and Technology Agreement), TFA (Trade Facilitation Agreement), Telecoms Annex, and others. McDougall noted that free trade agreements have evolved.

“We need to address the knowledge gap at the WTO,” he said while asserting that “trade and the digital economy must be part of the WTO’s forward agenda.”

 

Image Credits: Peter Kenny