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E-Commerce: Assessing the State of play

Following the Nairobi decision allowing WTO Members to consider negotiating some “new issues”, electronic commerce has received renewed interest in trade debates over the past few months. At this meeting, East African delegates to the WTO were briefed about the history and status of the WTO work programme on E-Commerce. They were also updated about stakeholders’ views on the matter in their respective countries.

At the last World Trade Organization (WTO) Ministerial meeting held in Nairobi, Kenya in December 2015, it was recognized that there’s increasing interest in the development of the electronic commerce (e-commerce) domain, which may be considered amongst substantive issues to be negotiated in the multilateral trading system, if all the members agree.

Indeed at the WTO, there’s increasing debate and exchange of ideas on what such a negotiation would entail. In the EAC, e-commerce is increasingly playing a significant role in both national and regional economies. Mobile telephony money transfer facilities are an example of this emerging means of doing business in the region. Given the multilateral interest in taking e-commerce within the negotiation ambit, it is critical that negotiators are equipped with on the ground realities in this context, so as to inform their inputs in this ongoing debate. It is in this context that stakeholders perspectives were sought to feed into deliberations of EAC Geneva WTO bi-Monthly forum at CUTS.

Based on the country update notes, EAC WTO Geneva Delegates were briefed on the stakeholder perspectives from EAC on the state of play in e-commerce, opportunities as well as challenges and recommendations on the main issues that could be addressed through negotiations at the WTO.

In addition EAC WTO Delegates were presented with an issue note analysing how e-commerce and related issues have been dealt with in the WTO, detailing the historical background, work undertaken and the status today. This was to put the current debate on e-commerce into context.

Thereafter, in their deliberations on both stakeholder perspectives and e-commerce work in the WTO, the delegates noted as follows:

  • EAC countries are not all at the same level of digital economy development, and hence may not have the same interests
  • Kenya's approach to regulating the sector has been one of laissez-faire, and then starting to regulate based on already established practices. Implementing e-commerce regulations will be challenging in terms of taxation, regulating financial flows therefore imposing multilateral rules as deemed priority by other developed and developing WTO Members could constraint e-Commerce development opportunities in the EAC region.
  • Before engaging into negotiating global rules on e-commerce, EAC countries need to have their own national legal frameworks. This will enable them to better understand their defensive and offensive interest, and take advantage of the policy space currently available to them.
  • EAC delegates want to have a better idea not only of their own interests in negotiating (or not) e-commerce, but also the motivations of the proponents of such negotiations. Not merely to follow other Members’ interest in such negotiations according to their priority but rather, EAC Members want to prioritize the fundamental capacity building in the infrastructure for E-Commence before they embark on the multilateral regulation of E-Commerce. Need to understand who are the stakeholders involved in e-commerce, what are their challenges and opportunities.
  • Furthermore, as energy/electricity is still a major challenge in the EAC, discussing e-commerce seems one step ahead in terms of development considerations. The delegates were of the view that infrastructure development in agricultural industrialization through technological transfer, energy diversification as priorities for EAC delegates in the WTO supersede E-commerce negotiations.

 

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