Digital policy at the WTO Public Forum: Summarising Day 2

The second day at the WTO Public Forum brought into focus multiple digital policy issues. E-commerce was discussed from multiple angles: as a gate to international trade, a tool for development, a challenge, and an opportunity for developing countries. The digital divide, e-payments, data flows, and the impact of new technologies were also debated throughout the day.

E-commerce open doors to international trade, but there are several bottlenecks that enterprises face when engaging in cross-border e-commerce. These include opening an online business, international e-payments, cross-border deliveries, and aftersales. Different laws in different countries, language barriers, necessary licences, tax treaties between countries, and banking rules are also elements due to which international business remains complex and can only be tackled with proper information and know-how. Estonia’s e-Residency programme is one example of a policy aimed at tackling some of these issues: it allows entrepreneurs to run a company fully online (independent of the physical location), including signing contracts, transmitting encrypted documents, and conducting e-banking (session 56).

E-commerce is also a tool for development, and it can be used by developing and low income countries to strengthen their small and medium-sized enterprises (SMEs) environment. But while e-commerce can, in theory, open new horizons for SMEs, the conditions around the world are unequal. There are still challenges that need to be overcome. First, the digital divide needs to be bridged, both in terms of deploying infrastructures and enhancing Internet access, and fostering capacity building initiatives focused on digital skills and entrepreneurship. Then, a sound business environment must be developed, with clear e-commerce and trade regulations that can foster competitiveness and facilitate SMEs’ access to markets and financing sources (session 33).

Since agriculture is the backbone of economy, development, and labour in most developed countries, agribusinesses and the agro-industry are seen as important in achieving sustainable development and promoting more inclusive trade. Technological advancements can help increase productivity in this area, and governments and the private sector should work together to help farmers access technology. Farmers should also be encouraged to use e-commerce as an easier way to sell their products and connect directly with consumers (session 34). Digital payments also allow farmers to receive and make payments more rapidly, and this is particularly important in countries with low penetration of banks (session 52).

Global rules and regulations could play an important role in bridging the knowledge and technology gaps that prevent developing and least developed countries from benefiting from e-commerce and global digital trade. But these countries must participate on an equal footing in such negotiations and in shaping global e-commerce and development policies (session 35, session 59).

In recent years, there have been multiple proposals, papers, and submissions made to the WTO on e-commerce related issues. Concerns have been expressed that many of these proposals are based on a ‘one size fits all’ approach, without considering the particular context of developing countries. In the view of these countries, issues that need to be tackled first are related to the creation of an enabling environment for e-commerce (access to infrastructure, capacity development, skills, etc.). Market access commitments and regulations in the framework should come after (session 45).

Some of the e-commerce-related proposals put forward at the WTO are related to data flows. Data represent a central aspect of the digital economy, but there are different views when it comes to data flows and data localisation policies. For some, restrictions on data flows could act as obstacles to the development of digitally-enabled services, and could also amount to barriers to global trade. International norms are needed to facilitate the flow of data across borders (session 46, session 49). Others are of the view that a free flow of data is problematic, as those with control of and access to data gain market advantage over others. In their view, the free flow of data is equivalent to ‘giving away resources for free’ (session 35) and could have a ‘devastating impact on industrialising efforts (session 59). In this context, they suggest that LDCs should adopt a ‘smart protectionism’ approach, preventing the free flow of data outside the country and enabling digital SMEs to compete (session 35).

As the WTO prepares for its 11th ministerial conference in December, progress could be expected on e-commerce and investment facilitation, and new alliances might be formed around these issues (session 48). And while the WTO already has a Work Programme on E-commerce, there are views that this programme needs to be updated, in the light of recent technological developments (session 49).

In addition to the WTO, the G20 is also a forum where trade issues are tackled. G20 was described as ‘playing a role in contextualising the trade agreements’, and its work is seen as complementary to the WTO’s work. While the G20 process puts trade discussions in a broader perspective, the WTO is seen as more inclusive when it comes to tackling complex issues. It is expected that the G20 agenda in Argentina, in 2018, will tackle issues related to the impact of technology and globalisation on structural unemployment and its implications for education (session 48).

The impact of automation and digitalisation on the job market is seen from different angles. As some jobs are likely to be automated in the near future, this raises concerns about job loss (session 59). However, automation is having a positive impact on the job market: automation and digitalisation contribute to an increase in productivity, and, as was the case with previous critical structural changes, the labour market will eventually adapt and reshape (session 60).

New technologies, such as blockchain and artificial intelligence, could also positively influence international trade. For example, blockchain, considered by some as the future of e-commerce (‘e-commerce 2.0’), can reduce transaction costs for players involved in the value chain, while big data can help in the implementation of the sustainable development goals (session 46). In the long term, the nature of trade itself is prone to change: trade will no longer be about individuals exchanging goods, but rather machineries trading non-physical goods (session 60).

A policy framework in which new technologies can be regulated is seen by many as a necessity. Both national and international policies are seen as important when it comes to promoting and regulating new technologies. Such regulations should focus on three main priorities: pursuing digital inclusion, fostering security and trust in technologies, and devising an education system that not only teaches new digital skills, but also conveys ethical values that need to be embedded in the new environment (session 46).