ASEAN Members Want A Regional Agreement On E-Commerce, Less Developed Members Struggle To Catch Up

A group of Asian countries is working towards a regional agreement on electronic commerce. During the United Nations Conference on Trade and Development e-commerce week, less developed countries of this group explained the difficult catch-up they have to fully enter into e-commerce nationally and internationally, particularly because most of their companies are small. Transport businesses, meanwhile, called for special customs rules for small companies to ease their participation in global e-commerce.

UNCTAD’s E-Commerce Week is taking place from 16-20 April.

A panel was organised by the Association of Southeast Asian Nations (ASEAN) on 17 April, on the potential ASEAN Agreement on E-Commerce.

ASEAN countries (Brunei Darussalam, Cambodia, Indonesia, Lao, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) have participated in a Work Programme on Electronic Commerce 2017-2025.

According to the ASEAN website, the work programme includes topics such as infrastructure (region-wide accessibility of broadband infrastructure, and conducive environment to foster the growth of e-marketplace and e-commerce platforms); education and technology competency, consumer protection (including code of conduct for on-line business, and consumer rights awareness); modernisation of the legal framework, and the security of online transactions.

Singapore Minister for Trade and Industry Lim Hng Kiang gave a speech in March (available from sgsme.sg, a Singapore blog for SMEs) in which he said that this year, “as part of Singapore’s Asean Chairmanship, we are pursuing an Asean Agreement on E-Commerce to help businesses expand and leverage the e-commerce market potential in Southeast Asia.”

“The Asean e-commerce scene is still at its infancy with some companies finding it confusing to navigate the varying e-commerce regulations in various Asean countries,” he added. “This agreement that we are aiming to sign this year will streamline some of these regulations, so that aspiring entrepreneurs and SMEs can market their products and services regionally with greater ease, and make it safer to send and receive electronic payments.”

UNCTAD: Discrepancy in Use of E-commerce, Need Support

On the panel, Cecile Barayre, economic affairs officer at UNCTAD, presented UNCTAD’s role in support of e-commerce in ASEAN countries. She remarked on the challenges in the region, notably the gaps in access to online commerce.

Her presentation showed that there is major discrepancy in the use of e-commerce in the world. For example, in Denmark some 80 percent of the population shop online, as compared to Thailand with less than 10 percent online shoppers.

A graph in the UNCTAD 2017 Business‐to‐Consumer (B2C) E‐Commerce Index [pdf], shows that e-commerce is mainly used by developed country users.

UNCTAD conducted Rapid eTrade Readiness Assessment for some ASEAN countries, including Cambodia [pdf], Myanmar [pdf], and most recently Lao [pdf].

Barayre mentioned a new UNCTAD/ASEAN technical assistance project for 2018/2019, focused on Indonesia, the Philippines, and Singapore.

The implementation of the ASEAN Work Programme on Electronic Commerce 2017-2025 needs the support of the ASEAN secretariat, and development partners, she said.

ASEAN governments need to make it a priority and have a long-term vision of e-commerce. She also suggested that countries reach out beyond e-commerce and infrastructure to include logistics, education, and finance ministries.

Less Developed Members of ASEAN Struggling

Chantira Jimreivat Vivatrat, director general, Ministry of Commerce, Thailand, said there is an increase in e-commerce users in Thailand. She presented a national platform for Thai businesses: thaitrade.com.

Thaitrade was launched in 2011 to offer a government-verified platform for small and medium-sized enterprises, she said. An ASEAN agreement on e-commerce would give the opportunity for Thai SMEs to enter into cross-border e-commerce, she said.

Khammanhkieng Khottavong, counsellor at the Permanent Mission of Lao in Geneva, said Lao enacted a law on e-commerce protection in 2017. He too underlined the importance of SMEs for boosting the local economy, noting that 93 percent of small businesses in Lao have less than 5 workers.

He said it is very difficult for Lao companies to integrate into the global market, to be seen as different and distinctive in such a massive world online. Other challenges for companies are the limitation of internet connection, the lack of IT knowledge, the lack of competitiveness and export readiness, limited access to finance, lack of knowledge of markets, brands and trademarks, lack of knowledge on regional free trade agreements, and lack of transaction facilitation services, he added.

U Minn Minn, deputy director-general, Department of Trade, Ministry of Commerce, Myanmar, said internet penetration has increased rapidly in Myanmar. He however underlined the fact that the country is a latecomer to the internet arena and needs support so it can catch up.

Express Transport Companies: Need Special Rules for SMEs

Carlos Grau Tanner, director general of the Global Express Alliance, the global trade association of the express delivery industry (DHL, FedEx and UPS), said international transport rules were designed for large trading companies, however, a majority of e-commerce sellers are micro, small and medium-sized enterprises (MSMEs).

Multilateral agreement take a long time to establish and implement, he said, so in the meantime, it would be good to put in place a regional system, such as for ASEAN countries.

He suggested an informal entry threshold for intra-ASEAN shipments of about US$1,450, regardless of weight or mode of transport for simplified procedure for low value shipment.  Entry thresholds establish a value below which simplified declarations are accepted. The Global Express Alliance published a list [pdf] of all de minimis (minimum value of the goods below which no duties and taxes are being collected by the customs) and entry thresholds.

Raising the entry thresholds would be in line with international instruments, such as the World Custom Organization Guidelines, and the World Trade Organization Trade Facilitation Agreement, he said.

He also suggested facilitated clearance and simplified returns, tax and duty payment.

 

Image Credits: Catherine Saez