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Global e-commerce policy work to continue despite no deal at WTO’s MC11 meeting

Global e-commerce policy work to continue despite no deal at WTO’s MC11 meeting
Photo credit: Simone D. McCourtie | World Bank

15 Dec 2017

UNCTAD Secretary-General Mukhisa Kituyi says talk of inclusive e-commerce and development must go beyond words if developing countries are to reap the benefits.

Hopes that World Trade Organization members would fix an all-party deal on e-commerce during its Eleventh Ministerial Conference (MC11) in Buenos Aires, Argentina, were dashed as the meeting closed on Wednesday, but trade envoys said work to find agreements in other ways would continue.

“The lack of progress on the digital economy negotiation at the WTO has been disappointing but we must not give up,” Sweden’s trade minister Ann Linde said.

With the world on the cusp of a new digital economy in which e-commerce and automation will transform production, trade, investment patterns – as well as helping meet the Sustainable Development Goals (SDGs) – the need for new policies to be adopted is clear.

“The gains of digitalization are not automatic and there will be major challenges for countries, enterprises and people to adapt, but we must start somewhere,” UNCTAD Secretary-General Mukhisa Kituyi said.

“Absence from electronic visibility means absence from the trading market – which is not good for developing countries and least developed countries,” he said.

For developing countries, digitalization is creating new ways for small businesses and women entrepreneurs to reach new markets and connect with domestic as well as global value chains.

Nigeria’s chief trade negotiator, Ambassador Chiedu Osakwe, said: “We must put in place policy systems that enable and reward innovation; economic systems that allow raw materials, components and finished goods to flow across borders; financial systems that secure investments and payments; regulatory and legal systems protecting workers and consumers.”

The stakes are high – to honour commitments to the 2030 Agenda for Sustainable Development, innovation and partnerships must be forged in unprecedented ways.

“We must ensure that the talk of inclusive e-commerce and inclusive development goes beyond words. This will require much more collaboration and scaled-up resources,” Dr. Kituyi said.

The speed at which digitalization is unfolding, and the significant gaps that exist in terms of the ability and readiness of countries, enterprises and individuals to engage in it, underline the urgency of scaling up global support to developing countries, particularly the least developed countries (LDCs).

In these 47 most disadvantaged countries, from Afghanistan to Zambia, only one in six people have internet access. And although the number of online shoppers in the world surged from 600 million in 2010 to 1.2 billion in 2016, more than 98% of people in the LDCs are not buying any goods and services online.

But policy solutions are on hand: automating customs declarations has been shown to bring clearance times down and to reduce the period that goods stay in transit.

Access to platforms and devices enables a seller in a developing country to reach more potential customers in domestic as well as foreign markets, in a more targeted way, and often at lower cost than through traditional channels.

Suppliers that increase their reliance on e-commerce can see reduced delivery costs, especially for electronically-provided content. This has an impact on global value chains, as more of the things businesses and consumers need to boost economic activity can be digitally delivered, which in turn helps manage fragmented production networks.

Against this backdrop, UNCTAD is helping policymakers to face the complex task of addressing multiple policy domains in parallel in order to realize the benefits of e-commerce.

“UNCTAD’s work on the digital economy should be taken at the regional and national levels to support developing countries and LDCs prepare for the transformation,” Mr. Osakwe said.

This work includes eTrade for All, a unique partnership that connects the dots among partner organizations, donors and business owners to bolster more inclusive development.

“UNCTAD’s eTrade for All offers an important platform to support policymaking in developing countries and to champion successful initiatives,” said Torbjörn Fredriksson, chief of UNCTAD's Information and Communication Technology Analysis Section.

“Increasingly, the contribution of digitalization to sustainable development will require a concerted, holistic, cross-sectoral and multi-stakeholder approach,” he said.

Digital transformation will be further explored at UNCTAD’s E-commerce Week held in Geneva, Switzerland, on 16-20 April 2018, which this year looks at the development dimension of digital platforms.