Trade In 2030: Just Who Will Decide The Rules On Ecommerce?

For ecommerce, just who should be making the rules was raised by a number of speakers at a session of this week’s 2018 World Trade Organization Public Forum entitled, “Ecommerce 2030: Enabling an inclusive future for e-commerce.”

It was a popular session with some of the audience standing in the side-aisles inside the WTO many of them drawn to listen to Jack Ma, chairman of China’s Alibaba, but who was representing the Electronic World Trade Platform at the lively encounter.

WTO Director-General Roberto Azevêdo was joined by Borge Brende, president of the World Economic Forum, Jack Ma, representing the Electronic World Trade Platform, UNCTAD (United Nations Conference on Trade and Development) Secretary-General Mukhisa Kituyi, Ambassador Robert Dufter Salama of Malawi, and Ambassador Frances Lisson of Australia. The WTO Public Forum is taking place from 2-4 October.

The WTO said that in the discussion it wanted to broaden opportunities for smaller players, entrepreneurs and regular citizens.

Separately today the WTO released its World Trade Report 2018.

The report finds that digital technologies, such as the Internet of Things, artificial intelligence, 3D printing and Blockchain, will have a profound impact on global trade, adding up to 34 percentage points to trade growth by 2030 thanks to lower costs and higher productivity.

The report identifies “key initiatives being undertaken by multilateral organizations such as facilitating a favourable legal and regulatory framework, competition-related issues, intellectual property rules, supporting MSMEs, promoting digital inclusion, and addressing challenges related to trade facilitation and infrastructure for information communication technology.”

At the forum session, DG Azevêdo said, “It’s clear that the internet and new technologies are revolutionizing our lives. If you have a phone, you are now connected to a global marketplace.”

In this way, as was repeated by Ma, ecommerce “provides a springboard to overcome some of the traditional obstacles to trade, Azevêdo said. It has reduced the trade costs associated with physical distance. And it has given consumers access to a broader selection of products, from a wider range of suppliers.”

Connected, but Barriers

But he noted even when you are connected there are still many barriers. Without the right approach, big players could easily dominate this market at the expense of smaller businesses.

“If we cross our arms and do nothing, that is precisely what is going to happen,” Azevêdo said. “Poorer countries could also be left behind. We know that around 4 billion people do not yet have internet access – and of course this is concentrated in developing and least-developed economies.”

The WTO head noted when it comes to the agenda of ecommerce, the WTO “will do nothing” but it will be the members of the organisation with mandates coming from their governments that will decide.

“We need also the right policy infrastructure, such as regulatory and payment systems – as well as the appropriate skills and expertise. So if we want this digital revolution to be inclusive, we have to work on all of these areas,” he said.

Richard Hill, who said he formerly worked in information technology for Hewlett Packard and is involved in global internet governance policy, commented from the floor that the forum had heard in an earlier session that all data ends up in “a couple of companies” in the United States or China.

He also said, “Jack Ma said we don’t want any rules,” asking how the WTO plans to deal with this.

Ma said in response, “I think we need rules and the law…. For intellectual property, privacy and internet violence we need rules and laws.” He said, however, that government tends to strangle innovation which can help more people.

UNCTAD’s Kituyi, praised Ma for what he and the China-based Alibaba have done to facilitate electronic commerce entrepreneurship in Africa and developing countries.

‘Need for Regulations’

Kituyi said, “I will not get into the debate as to whether the WTO should be making rules on ecommerce or not.” He said, however, he wanted to note, “There is this libertarian sense that if you have few rules enterprise will flourish. That fired Silicon Valley until they discovered that they need regulations to guarantee payment systems, that they need regulations to provide for privacy laws. They need certain forms of cooperation to guarantee the trust economy is more than just trust.”

He asserted that regulators should not be inhibitors but facilitators, and that laws are needed in areas such as in the interest of competition, for consumer protection rules and for issues such as the guarantee of returned goods regulation.

“One of the challenges we face in rules about ecommerce is that States are not interlocutors,” said Kituyi, while noting that the rules have often been set by enterprises “that are straddling national boundaries.”

“So who is going to sit at the table to agree on the rules?” Kituyi asked, wondering if it will be commercial entities or States, or the members States of the WTO.

“It is a reality that a combination of globalization and the development of the ‘fourth industrial revolution’ is leading in the direction where pre- and post-production services embody more value than the goods production,” said Kituyi. “So design, IP, logistics control, auditing and post supply surveys  are paid more than the product itself.” Therefore, he added, when looking a factors such as broadband regulation investment the regulation of services is essential.

Kituyi also said there is no ODA (Official Development Assistance) in the digital economy, and only to a limited extent in ICT services. He said development banks, including the World Bank, have only one percent of their resources related to ICT services and of this only 4 percent goes to policy development.

Malawian Ambassador Salama said that while many believe the internet offers opportunities to least developed countries (LDCs), the “biggest challenge we face is the digital divide.”

“There is not electricity everywhere and 62 percent of people in LDCs do not have access to computers,” he noted.

‘Illiteracy and No Competition’

Other factors inhibiting them is literacy and no competition with providers of internet technology services along with underdeveloped postal systems.

WEF President Brende observed that ecommerce can be looked at both positively and negatively.

“If you look at the largest companies at market capitalization, many of them did not exist 20 years ago and some did not exist 10 years ago,” he said while noting, “I think Jack Ma is right to say 90 percent of business is going to be ecommerce.”

“What we are discussing here is how to ensure we can make a level playing field so it can be a huge opportunity for developing countries and LDCs,” said Brende. “We need to … ensure that we all compete on the same level.”

Australian Ambassador Lisson said that a number of fellow panellists had spoken about why there was the potential need for guidelines and rules around ecommerce. She said they are there “to ensure that we have online trust, and that we have the predictability and stability that in particular small businesses need if they want to participate in international trade.”

 

Image Credits: Peter Kenny