Digital policy at the WTO Public Forum: Summarising Day 3

The third and last day at the WTO Public Forum reiterated a message from the previous two days: e-commerce can serve as a tool for development, which presents both opportunities and challenges for developing countries. In addition, it brought into focus issues such as the role of e-commerce in fostering cross-border trade, consumer rights, intellectual property rights, data flows, and automation and artificial intelligence (AI).

Whether e-commerce leads to development and growth is very much dependent on a wide range of issues, from a country’s geography, society, and culture, to the level of economic digitalisation (session 83). Addressing the digital divide and improving access to information and communication technologies (ICTs), facilitating the use of e-payment systems, building the capacities of companies (including small and medium sized enterprises (SMEs)) to use ICTs, are some of the policy approaches that governments can take to help the digital economy grow (session 96, session 97, session 99). On a larger scale, liberalising trade and strengthening ICT policies are also important (session 90).

E-commerce has the potential to boost cross-border trade. But entering international markets is still challenging for some enterprises, especially SMEs. Lack of good infrastructures, challenges with delivery services and payment solutions, knowledge and skills gaps, and cumbersome customs regulations are among the main barriers (session 99). Other challenges include difficulties in accessing relevant information and lack of infrastructure when seeking to create seamless supply chains. Digital technologies can help address some of these challenges. The EU, for example, is combining trade policy and technology, trying to provide companies with easy and relevant information, via digital tools and tailored information packages. Open data can help reduce the costs of databases, while blockchain could enable more diffuse and decentralised forms of data sharing across the global value chain  (session 92).

Developing and least developed countries need to be better integrated in the global digital economy. The development of international frameworks for e-commerce and digital trade is important in this regard. They must be based on three pillars: hard infrastructure – facilities support (transport infrastructures, logistics, telecom networks, etc.); service guarantee – service support (data mining, payment settlement, etc.), and soft infrastructure – technology support (Internet, AI, blockchain, big data, etc.). Several initiatives have already been launched around the world to assist enterprises, and especially SMEs, to enter the global market, and one example is the Electronic World Trade Platform (eWTP) initiative, promoted by Alibaba’s CEO Jack Ma (session 96).   

Some consider intellectual property rights (IPR) as an entry-market barrier. IPR enforcement risks leaving some countries behind, but without IPR there would be no supply. Therefore, a balance must be achieved between IPR enforcement and maintaining a model in which none of the world’s regions or user groups are excluded. In the light of technological progress, two main questions need to be carefully considered when it comes to IPRs: a) data ownership – who owns user data and user-generated data?; and b) digitalisation of everything – with the Internet of Things and the digitalisation of companies, what happens when trade secrets and blueprints are at risk of being hacked, stolen, or when the network goes down? Who is liable for what? (session 101)

When it comes to consumer protection in the context of e-commerce, privacy and data protection are among the main concerns. Asking for consumers’ informed consent when providing personal data, and providing clear information on how and for what purposes the collected data is processed are two key elements that e-commerce providers need to put in place. Human rights (i.e. right to privacy) also need to be part of international trade discussions  (session 83). At a more general level, e-commerce consumers should enjoy the same protection as traditional commerce consumers. Empowering and informing consumers can boost their confidence in e-commerce, and this, in turn, can boost e-commerce (session 101).

The cross border flow of data can facilitate international trade, and it is therefore important to allow data to circulate independently from its initial creator (session 92). Some countries limit cross-border data flows, citing security and privacy reasons as their main motivation. While ensuring privacy and security are legitimate reasons, they are sometimes simply used as a pretext to obtain economic advantages through data flow restrictions. To avoid such situations and ensure that data flow restrictions are legitimate, some call for international trade principles. And the first step towards discussing such principles is to differentiate between the types of data, as ‘all data cannot be seen as equal’. Countries must reach a compromise where privacy and security are upheld, while data flows are justly allowed  (session 90).

E-commerce and the sharing economy bring changes for traditional markets, but they also present many opportunities. No country or company will ever be fully prepared for changes, but they can all adapt on the way. Being fully prepared is a rather unachievable concept, and can even hamper progress (session 97).

Progress in the field of digitalisation, automation, and AI can contribute to development, but it also raises a number of issues, from technical standards, to liability and ethical considerations. In the specific case of commerce and trade, new technologies can be both beneficial and disruptive. On the positive side, blockchain technology, for example, can be of use when tracking and streamlining production, while a combination of blockchain and AI can enhance reliability. Using big data, AI, and the Internet of Things can increase efficiency and transparency in the shipping process. But the use of such technologies also raises issues related to security and trust. For example, some blockchain applications (such as cryptocurrencies) can be vulnerable and susceptible to fraud, while AI algorithms raise questions of transparency and accountability. These issues need to be carefully considered when new technologies are introduced (session 105).

There are also concerns about the job market. Some are worried that automation leads to job losses, while others point out that new jobs will be created in areas that cannot be fully automated (such as those based on human interaction and empathy). What everyone agrees on is that the workforce needs to be equipped with new skills and knowledge, and the education systems needs to be adapted to the future labour market needs. Critical thinking, creativity, empathy, and social and emotional skills are the main elements that separate humans from machines, and emphasis should be put on them.

The fourth industrial revolution is also expected to impact the welfare system, and there are several proposals being discussed on how to address this situation. A universal basic income is one such proposal, but its legal aspects require further consideration. Certain legal principles that are common across jurisdictions, such as the principle of equality, might not be immediately compatible with the idea of a universal basic income. A ‘robot tax’ idea poses legal complexities as well, even only when it comes to providing a proper legal definition for robotics or AI (session 104).

With the rapid changes in global trade, generated by digital technologies, different legal regimes need to be harmonised so that they do not hamper cross-border trade. The lack of harmonisation of trade rules is another obstacle for e-commerce to lead to genuinely inclusive trade, as different legal requirements lead to a fragmented environment (session 101).

The WTO Information Technology Agreement (ITA) is an example of a successful international policy that assists countries on their path towards growth and development. The trade liberalisation agreement led to the elimination of import duties on several technology products. As a result, countries have cheaper access to ICTs, and this facilitates their work in areas such as bridging the digital divide, building infrastructures, and empowering individuals. Although the elimination of tariffs has led to revenue losses, these have been later recovered by growth and access to ICTs (session 103).

E-commerce has long been on the agenda of the WTO, and different aspects have been discussed ever since the introduction of the moratorium on custom duties on electronic transmissions (1998). There are now multiple proposals put forward to the WTO, but what deserves particular attention is the need to ensure predictability in the application of existing rules, and the emergence of regional trade agreements with provisions on digital economy and e-commerce (session 96). As to the existing proposals, one concern is that they tend to focus on cross-border e-commerce, while the biggest challenge, especially for developing countries, is related to the domestic e-commerce environment (problems with digital infrastructures, skills, market educations, etc.) (session 83). But there are also calls for the WTO to take measures to help the development of e-commerce. Despite the different level of development among countries, they are all impacted by e-commerce, and there should be no discrimination when it comes to developing and implementing e-commerce related policies and regulations (session 99).