E-Commerce and the Digital Economy WTO (Negotiations, Regular Work, Leadership)

E-commerce in the World Trade Organization: History and latest developments in the negotiations under the Joint Statement

This negotiating brief was prepared for the Geneva Seminar held on January 29, 2020, on the Joint Statement Initiative (JSI) devoted to electronic commerce, which involves a group of World Trade Organization (WTO) Members. It covers the history of e-commerce-related discussions in the WTO context from the late 1990s to the present, as well as the latest developments in the negotiations under this JSI.

The surging growth of the Internet has spurred changes in business models and fueled the proliferation of e-commerce. During the Internet’s early days in the 1990s, analysts identified a number of benefits likely to be associated with e-commerce, such as: shrinking the distance between producers and consumers, reducing costs and barriers to entry and offering small and medium enterprises (SMEs) many of the advantages enjoyed by their larger counterparts.

(International Centre for Trade and Sustainable Development [ICTSD], 2017; Organisation for Economic Co-operation and Development [OECD], 2019a). As telecommunications and digital capacities continued their rapid evolution, e-commerce accelerated, offering new opportunities for growth and economic development (Kende & Sen, 2019). As quickly as it became a defining feature of domestic and cross-border trade and production methods, e-commerce has become one of the top items on policy-makers’ agendas at the national, regional and international/ multilateral levels since the mid-1990s (ICTSD, 2017; OECD, 2019a).

Electronic commerce was first recognized in the context of the World Trade Organization (WTO) at the Second Ministerial Conference in May 1998 in Geneva, where ministers adopted the Declaration on Global Electronic Commerce calling for the establishment of “a comprehensive work programme to examine all trade-related issues relating to global electronic commerce, including those issues identified by Members.” The Declaration added: “the work programme will involve the relevant World Trade Organization (“WTO”) bodies, take into account the economic, financial, and development needs of developing countries, and recognize that work is also being undertaken in other international fora” (WTO, 1998a).TheWTOWork Programme on E-Commerce was established by the General Council (GC) in September 1998.

It defined e-commerce as “the production, distribution, marketing, sale or delivery of goods and services by electronic means” (WTO, 1998). This definition is considered broad compared to definitions used by other international organizations and forums. (See Box 1 discussing competing definitions and terms involving e-commerce).

Almost 20 years after the WTO’s Second Ministerial, the world is witnessing an explosive growth in e-commerce activities. According to the U.S. International Trade Commission (USITC) (2017), global e-commerce grew from USD 19.3 trillion in 2012 to USD 27.7 trillion in 2016. Estimates from the United Nations Conference on Trade and Development (UNCTAD, 2019) place the global value of e-commerce at USD 29 trillion in 2017.The e-commerce landscape is continuously evolving, with new players, ways of doing business and policies emerging (OECD, 2019a). A recent study conducted by CUTS International found that as of June 2019, 84 regional trade agreements (RTAs) included e-commerce provisions either as standalone chapters or as dedicated articles and 60 per cent of those RTAs entered into force between the years 2014 and 2016 (Gaitan, forthcoming).This shows the growing interest in regulating cross-border e-commerce in recent years.

At the Eleventh Ministerial Conference in Buenos Aires on 13 December 2017, 71 WTO Members confirmed their intention to advance on the e-commerce front in the WTO and released the first Joint Statement on Electronic Commerce. The group stated that it planned to “initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce” (WTO, 2017). After a year of discussions, the number of signatories increased to 76 WTO Members, which issued a second Joint Statement in Davos on 25 January 2019 announcing the “intention to begin electronic commerce negotiations at the WTO… based on existing WTO agreements and frameworks” (WTO, 2019c).

This paper gives an overview of the e-commerce discussions in the WTO, with a focus on the latest developments under the Joint Statements and their progress toward reaching an outcome in the runup to the WTO’s Twelfth Ministerial Conference (MC12) in Nur-Sultan, Kazakhstan, in June 2020.