Liberalization of electronic commerce in the 21st century: WTO as a tool of overcoming difficulties

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Federal state autonomous educational institution for higher professional education national research

UNIVERSITY HIGHER SCHOOL OF ECONOMICS

Faculty of the World Economy and International Affairs

BACHELOR'S THESIS

Liberalization of electronic commerce in the 21st century: WTO as a tool of overcoming difficulties

Field of Study: International Relations

Degree program: Bachelor's Program “HSE and University of London Parallel Degree Program in International Relations”

Kuptsova Yulia

Supervisor:

Professor Vladimir Zuev

Moscow, 2020

Table of Content

Introduction

Chapter 1. New era of trade in theory

1.1 Application of basic principles in electronic commerce

1.2 Specifics of e-commerce development

1.3 Discoverers' work as the launch of a new mechanism

Chapter 2. WTO as an instrument for resolving the main issues

2.1 Initial barriers to success

2.2 Opportunities within the WTO framework to keep up with the progress

2.3 Technical cooperation and capacity building- the core elements of growth?

2.4 Software as a tool for increasing productivity: future outlook

Chapter 3. Prospects of the development: from developed to least developed countries

3.1 Influence of appropriate digital infrastructure

3.2 Unification as a tool for promoting interests

3.3 Expectations for a progressive future

Conclusion

Bibliography

Appendix

Abstract

Electronic Commerce implies purchasing and selling of merchandise, items, or services over the internet. Exchange of cash, assets, and information is as well considered as e-commerce. These business exchanges are possible in four different ways: Business to Business (B2B), Customer to Business (C2B), Customer to Customer (C2C), Business to Customer (B2C). By 2020, worldwide retail electronic trade can reach up to $27 Trillion.

Today electronic commerce is an integral part of society. Almost every person resort internet for the purpose of buying or selling products, goods or services. This work describes the main difficulties that e-commerce faces during spreading in all spheres. Especial attention would refer to the political and regulatory context through the prism of WTO. How does the WTO promote digital trade? Which tools can be used for developing countries to be integrated on equal terms? These critical issues and future plans will be observed in the research.

Introduction

Electronic commerce is the purchasing and selling of products and services, or the transmitting of funds or information, over an electronic system, fundamentally the network. The beginnings of web-based business can be followed to the 1960s when organizations began utilizing Electronic Data Interchange (EDI) to share business archives with different enterprises. In 1979, the American National Standards Institute created ASC X12, a versatile standard for organizations to share documentation through electronic systems. During the 1980-s, the number of independent users of online sharing of files significantly grew and, consequently, the ascent of eBay and Amazon altered the internet business industry in the 1990s. Given the significant ascend in electronic commerce as of late, numerous investigators, financial experts, and purchasers have discussed whether the online B2C market will supplant physical stores.

The advantages of electronic commerce incorporate its round the clock accessibility, the speed of access, the full accessibility of products and services for the shopper, free availability, and global reach. Talking about accessibility, beside breaks or scheduled, electronic commerce locales are accessible 24x7, permitting customers to peruse and shop whenever. Moving to the speed of access, while customers in a physical store can be eased back by crowds, online locales run rapidly, which is dictated by transmission capacity contemplations on both buyer gadgets and webpage. Another advantage is easy accessibility. In online-based business, consumers can peruse item classification pages and utilize the website search include the find of the item directly. Electronic commerce can expand a business' client base all around. Moreover, online business organizations escape the expense related to physical stores, for instance, lease, stock, and employees, even though they may cause shipping and storage expenses.

The perceived downside of e-commerce sometimes includes limited customer service, consumers not being able to see or touch a product prior to purchase, and delivery time. Talking about consumer services in a web store, assistance to clients may be restricted: the website may just offer help during specific hours of the day, or a call to a client assistance telephone number may keep the client on hold. Also, people are not able to touch or see products. Electronic commerce can lead purchasers to get items that contrast from their desires, which prompts returns. Electronic commerce can lead purchasers to get items that contrast from their desires, which prompts returns. Additionally, if a client sees a thing that he or she likes in a store, the client pays for it and afterward returns home with it. With online commerce, there is a waiting time that the item will be transported to the client's address. Moreover, professional hackers can make similar looking sites that claim to sell generally known items. Instead, the site sends clients fakes of those items - or just gathers clients' credit card data.

However, there is just a technical discussion of electronic commerce to have a brief view of the topic. The main problem is digital commerce regulation and spreading around the world.

Literature review. This work mainly will be based on the publication of the following authors: Merit Janow, Petros Mavroidis (2019) "Digital Trade, e-commerce, the WTO and Regional Frameworks." The aim of this article is to layout the main problems and reasons for the lack of regulation of the electronic commerce system. Digitalization of the economy, the fourth industrial revolution, is a recent phenomenon, and to some extent, post-dates the conclusion of the Uruguay round agreements (1994). The world trading system has demonstrated a powerlessness to change under current business real factors. To the degree changes reflected in new principles, they are being presented in regional or bilateral frameworks, but in a partial style.

Another source is The Global Economic Governance (GEG) Africa (2018), "Enabling markets for digital trade: Surveying the policy instruments." This article is necessary for this research to look at instances of policy instruments related to assisting markets for electronic commerce and what has impacted their samples in different countries.

Shamel Azmeh, Christopher Foster (2018) "Exploring Policy Tools for Promoting Digital Trade." The article examines the main political tools for a developing economy during technological shifts. These changes are probably going to escalate in the years with innovations, for example, artificial intelligence. In this regard, developing and emerging economies face an acute call. The digital economy - extensively characterized as the utilization of digital technologies to simplify business exchanges - gives a chance to jump and accomplish economic and innovative makeup through utilizing digital technologies and building power in the digital economy.

Catherine Mann (2000) "Electronic Commerce In Developing Countries: Issues for Domestic Policy and WTO Negotiations." Article provides advantages of electronic commerce as motors that improve internal financial prosperity through liberalization of local services, increasingly fast incorporation into the globalization of manufacturing and jump frogging of open innovation. Technical issues of electronic business, its comprehensiveness, and the specification of system externalities should change the way that developing countries approach the outdoor negotiating process. In particular, the difficulty of negotiations will require more collective forces among nations through their local forums, which to this point, have worked at the circumference of the WTO procedure.

Catherine Mann, Sarah Cleeland (2000) "The WTO after Seattle: Electronic Commerce in the WTO." The article describes the main goals and tasks of WTO, for example, to set up foreseeable conditions in which electronic business can flourish, permitting the advantages of this new type of worldwide trade to be carried out by all customers in all states. In achieving these targets, the WTO can work to guarantee that electronic business stays liberated from worldwide trade barriers and keeps on driving local and worldwide development. Electronic trade offers a specific guarantee to developing countries. Market developments and improved market efficiencies obtained through electronic trade and its essential infrastructural components will have a tremendous effect in those sectors and countries where coordination and transaction costs are most elevated.

Catherine Mann (2000) "Transatlantic Issues In Electronic Commerce." This publication is critically important as it shows the main changes in the nature of national and international economic and government relations in the electronic commerce market. Since the Internet marketplace is universal, however, policy jurisdictions stay regional, policy clashes can appear. Policymakers on the two sides need to use technology and advance stimulus for the private sector to help resolve issues brought about by the jurisdictional overlap.

Andrew Mitchell (2001) "Towards Compatibility: The Future of Electronic Commerce Within the Global Trading System." This article analyzes the key issues that electronic business formulates for worldwide trade, utilizing as an initial position the General Agreement on Trade in Services (GATS), the World Trade Organization (WTO) understanding generally significant to electronic business. It starts with an outline of electronic business, giving a meaning of electronic trade and analyzing its development and financial effect. Then examines the significant operation played by the WTO in electronic trade and the primary importance of GATS in that functionality. The article proceeds to think about the compatibility between electronic commerce and global trade at three levels.

Yun Zhao (2006) "Liberalization of electronic commerce in mainland China and Hong Kong under the WTO-CEPA regime." The article argues for the intense issue of liberalization of electronic commerce. The World Trade Organization (WTO) is one of the most unmistakable and relevant bodies to examine the issue of liberalization. The changes made in introducing intergovernmental standards through the legal and regulatory framework set by the WTO will be critical determinants of things to come structure of electronic business.

Mark Lund, Steven McGuire (2005) "Institutions and Development: Electronic Commerce and Economic Growth." This article questions the assumptions underlying modern thinking. Online business is not able to have pro ted people, rms, and states in the developed world. Nevertheless, as indicated by associations, including the WTO, OECD, and UNCTAD, just as the USA and EU, trade in e-commerce is likewise methods for improving the general economic expansion and effectiveness of less developed countries. It is significantly critical to examine this paper during the study to consider different perspectives of electronic commerce liberalization.

Marc Bacchetta (1998) "Electronic commerce and the role of the WTO." This study provides a strong theoretical base with the most critical historical cases and events, with the use of graphs and tables. Also, it includes the main changes in policy conduction and WTO influence.

Sacha Wunsch-Vincent (2004) "WTO, e-commerce, and Information Technologies: From the Uruguay Round through the Doha Development Agenda." This paper is a review of one of the most significant procedures today, deciding the governance of information technology (IT): the expanding role of the World Trade Organization (WTO), located in Geneva. Even though its part frequently ignored, the WTO has lately risen as a key player in IT governance, mainly through the use of the rules-based trading system to electronic commerce. This role can be followed at least back to 1995 and has extended through the latest Doha round of negotiations.

Bashar Malkawi (2007) "E-commerce in Light of International Trade Agreements: The WTO and the United States-Jordan Free Trade Agreement." This paper investigates how existing trade agreements have managed electronic commerce. The paper gives a review of the conditions in WTO. The article then investigates the electronic business regulations in the United States-Jordan Free Trade Agreement (US-JO FTA) and how the sides have handled the barriers that slowed down the WTO work on electronic commerce. It infers that the US-JO FTA approach for electronic commerce did not move beyond what the WTO has already done.

Methodology. In this research, it will be used a case study, qualitative and quantitative methods of research. Talking about the case study, it is an analysis strategy and an empirical inquiry that researches an event inside its real-life setting. It incorporates an overview of the publications, media, reports, and more, which serves to build up a fundamental comprehension of the cases and educates the development regarding research questions. This method is the most applicable and useful because it reflects valuable argumentation on a live example.

Talking about qualitative, it is a study of different articles, books, transcripts of speeches, interviews, and meetings. The qualitative method is advantageous when the topic is too complex to get a "Yes" or "No" answer to the main question. These methods are much easier to plan and execute.

Quantitative research is a method of collecting data, both scientific and nonscientific, in order to describe the area under study. This method is often used because it is simple and reliable for obtaining accurate information. With the help of the quantitative method, there will be statistical usage of the electronic commerce, the dependence between e-commerce and economic growth, the results of the voting processes during WTO sessions.

Research question and hypothesis. This work is going to be uneasy about analyzing because of the vast amount of the documents and adopted decisions during conferences. However, it makes an excellent opportunity for broad analysis. Unfortunately, a very significant and exciting Ministerial Conference, especially for the present times during COVID-19, will be held in June. It is going to show the great importance of electronic commerce.

The first reason for that is the willingness of 76 (out of 164) members to participate in the future discussion. The main topic will be the introduction of global rules in the field of electronic commerce. The new rules will be aimed at expanding opportunities and solving problems of e-commerce; as a result of the negotiations, the parties plan to develop a multilateral legal framework in the field of e-commerce that small and medium-sized enterprises in developing and least developed countries can rely on.

Another reason is the high speed of online business development. An example is the introduction of new technologies: interactive product visualization, chatbots, personalization, and behavioral factors. All these lead to electronic commerce spreading a partial failure of the physical stores, especially with the current pandemic situation. Electronic commerce is a crucial instrument for business survival without taking into account government subsidies. It helps sellers to offer goods and services of delivery, as one of the most necessary things, and continue trading.

This research will try to analyze: What are the main perspectives of online business? What are the ways of its' liberalization through the WTO? The main aim is to show the usefulness of electronic commerce for every society, from the third world countries to the developed countries.

In conclusion, the hypothesize is that WTO is an essential tool for globalization and liberalization of electronic commerce. The Work Program on Electronic Commerce, which includes the different aspects of regulation and issues resolving regarding the digital transfer of goods and services across borders, held a great job. Although World Trade Organization is at the initial stage of implementing robust regulative frameworks, there are all prerequisites for this, including previous years conferences results, the moratorium on imposing customs duties for developing and least-developed countries' prosperity, and membership in the face of developed countries and leaders in digital trade for experience sharing.

Chapter 1. New era of trade in theory

E-commerce can be defined as an economic activity that allows people to trade goods and services with the use of digital media such as web pages, mobile apps, and social networks. Through the virtual network, customers can access various catalogs of services and products at any time and in any place. The relevance of this type of trade is that businesses perceive it as part of a sales strategy due to its effectiveness. Organizations already have web pages and create social media profiles to reach a wider audience. To sell electronically, sellers do not need to create a sizeable virtual store and be a consolidated brand online, because anyone can do this through a simple post on their social networks or using an external platform.

1.1 Application of basic principles in electronic commerce

There are six fundamental instruments of e-commerce: the phone, the fax, TV, electronic payment, Electronic Data Interchange, and the Internet. This is a broad meaning of the concept "commerce"; in numerous conversations, electronic trade just alludes to the internet and other internet-based business. However, instruments, for instance, the phone, fax, and TV are now utilized for business transactions, particularly in industrialized states. Often customers make orders via telephone and pay for them with a credit card. Moreover, electronic commerce was not followed by the rise of new instruments such as the internet, for example. Be that as it may, the internet opens up numerous additional opportunities: commercial transactions can occur on an interactive basis, unconstrained by time belt, with the use of multimedia, and at generally lower costs. This makes the internet significantly more versatile than the different instruments of electronic trade.

Table 1 represents the main instrument, elements of the commercial transaction, and technical features. The earliest and thus far most significant instrument of electronic trade, or of directing business utilizing media, is the phone. Various qualities have helped the phone to reach and keep up a key role in business transactions.

Table 1. Main instruments of electronic commerce

Retrieved from https://www.wto.org

One explanation is its universal accessibility. The phone is a flexible instrument: it helps products and services to be publicized, acquired and paid for (by credit card, for instance). A nonstandard trading, which may require a discussion, can be led substantially more effectively by communication via phone than via mail. Low expenses of hardware and the ease of use of the instrument can be presented as a sharp point. In numerous examples, be that as it may, the telephone just plans transactions that are then finished up on paper and lead to physical conveyance of an item. In many states, the utilization of phones is relatively inexpensive, and payment for local communication is often included for the main charge. Charges for long-distance calls, be that as it may, change drastically across states. This constrains the utilization of the phone for international calls, particularly in poor states.

The next one is a fax. Faxes offer highspeed business interaction and document transmission. The fundamental advantage of the fax lies in supplanting customary mail services with rapid document transmission. Although fax has a range of functions like advertising, shopping, and payment processes, it has limited functionality in voice massages and photos sending because of the low quality of images. Online interaction is impossible, and any difficulty in an operation requires an extra fax or call for explanation. Payment for fax, entrance to lan, and ease of use are analogous to the phone, even though fax machines often are more costly. It may be concluded that the fax significant in cooperation and trade between organizations, however considerably less between singular purchasers.

Even in nowadays TV have more spread then the phone among ordinary buyers. From the outset figured, not many individuals would think about TV as a method for electronic trade; however, a significant share of shopping from home is made through publicizing and shopping programs on TV. Television advertising, for example, absorbs one-quarter of all advertising expenditure in the United States. Cable TV has expanded the business capability of TV by giving numerous extra channels and presenting new means, for example, interactive TV. So, TV is a "one-way street" of interaction where the audience cannot adequately look for commercial offers or arrange the terms of trading. Relatively low-price component of the television and usability of the TV have contributed to its success as a means of entertainment facilities and trade.

Electronic payment and money transfer like cash machines (ATM), credit cards, debit cards, or smartcards are likewise part of electronic trade. Even though these instruments normally just serve to make or to get payments, they have become significant supplements to different methods for electronic business and traditional trade. ATMs are currently the standard methods for balance requests and money withdrawals in industrialized states. Also, there is one more vital tool of e-commerce is Electronic Data Interchange or EDI. EDI often implies the exchange of information and papers among organizations' computers without people interference. Its motivation is to bring down expenses and accelerate offering, order taking, invoicing.

Finally, in recent times, people attach more values to the usage of the internet. It is a universal way of getting knowledge, news, entertainment, and doing business. Customers can conduct a variety of processes to get an item through the internet. The internet allows people to find out the necessary product through the search engine even with the use of images, to look at alternative items, to select ways of delivery, and make a payment. Also, it is a real treasure trove of business opportunities, because all processes from advertising to shipping are automatically conducted.

1.2 Specifics of electronic сommerce development

Talking about the main features of commerce, although, like traditional commerce, it has the main goal in creating sales, e-commerce is undoubtedly very different. Many features distinguish e-commerce from what people knew as commerce decades ago. First of all, the global reach. Years ago, a company, in order to generate sales on another continent, had to be a considerable organization with various branches, employees, and a considerable logistics potential. Instead, e-commerce gives global reach to everyone who wants to engage in it. It is because consumers from any country can log in to sellers' virtual store or social media account. They just have to develop the right strategies to contact them. Secondly, it is ubiquity. This refers to having the ability to be present everywhere at once, as e-commerce does. If desired, the virtual store can serve the public 24 hours a day, regardless of where the user is located. Thirdly, interactivity. Another feature of e-commerce is that it encourages constant feedback between consumers and brands. Within seconds, users can ask questions, comment on products, and even raise complaints.

So, what is e-commerce for? This stage will focus on the usefulness of this marketing method for companies and enterprises. In particular, there will be described three main things that ecommerce serves for. Firstly, expanding sales opportunities. Logically, traditional trading will significantly increase sales opportunities if managers also decide to use electronic channels. Also, brands that exclusively engage in this form of trading have more options, as they have access to a global community of millions of users. Secondly, the launching of innovative products. In a traditional market, launching innovative products requires significant investments in advertising and an extensive logistics structure to get sellers to the right outlets or suppliers. This is why many medium and small businesses use e-commerce to provide new services or products, allowing users to know their specifications and even interact with some of their features before purchasing them. Thirdly, brand awareness. If a business has a long-term track record, but its brand awareness is very low, it needs e-commerce. Marketing in a large online community and social networks serves to transform the brand from "invisible" to known for many users and market players.

Now about the advantages of e-commerce. As was described previously, some of them are the global reach, ubiquity, and impact. However, there are many more specific advantages of this marketing method, and it will be explained 3 of them below. So, one crucial feature is flexibility and simplification. To have a successful virtual store, traders do not need hundreds of employees if they have a good architecture and technology support. Also, there are solutions such as drop shipping that greatly simplify the online sales process. In the case of this model, it allows e-merchants to operate without inventory, as it provides a direct link to the supplier. Another significant bene t is access to information. Later there will be a discussion of digital marketing and inbound marketing, but developing such strategies is much more comfortable with marketing in electronic form. This is because the dynamics of e-commerce provide access to valuable information about customer identification, consumption patterns, and market preferences. Besides, it is elementary to monitor various indicators and KPIs of e-commerce, including the conversion rate. Low investment is also a significant advantage. In recent years, ecommerce has become not only a source of profitability for major brands, but it has also proven to be a perfect alternative for small and medium-sized enterprises. This is because it requires much less investment than traditional trade. Among other things, this allows to save on employee salaries, large inventory, and costs associated with maintaining and renting physical stores.

Types of electronic commerce. This marketing method is so developed now that it has different types of electronic transactions and specific areas of action. There are 6 of them.

1. B2B e-commerce. Business-to-business is one in which a business transaction is carried out only between companies operating on the internet, so it means that consumers do not participate. In B2B e-commerce, there are three ways: a controlled market that accepts only sellers in search of buyers; a market where the buyer only looks for suppliers; a market where intermediaries seek to enter into a commercial agreement between buyers and sellers.

2. B2C e-commerce. Business to Consumer is the most common and commonly used by us. This occurs between a business or virtual store and a person who is interested in purchasing a product or purchasing a service. This segment includes people who have an online account and customers who purchase products.

3. C2C e-commerce. Consumer to Consumer type of trade is usually provided by people who have products that they no longer use and want to put them up for sale, so they use e-commerce as a means to make this transaction with another consumer.

4. G2C e-commerce. This type of trade refers to all types of transactions made by governments, such as personal document processing or tax procedures, among other institutional services. Government to Consumer is an alternative that has turned cumbersome procedures, where people used to have to do lengthy queues, to the comfort procedures from home.

5. C2B e-commerce. Consumer-to-business models are slightly less common in e-commerce. This materializes when the consumer sells or brings money to the company. Companies that use crowdsourcing or a Kickstarter campaign to fund their business will fall under C2B support.

6. B2E e-commerce. Business to Employee is focused primarily on the company and its employees, which means that these are offers that the company itself displays to its employees directly from its virtual store or online portal, and that usually have attractive offers that help improve performance.

How does digital marketing work for e-commerce? Below there will be looking through 4 aspects that affect and are critical for developing digital marketing practices for this type of business. First of all, Search Engine Optimization. SEO is search engine optimization, which is necessary for e-stores because the better their pages, blogs, and publications occupy in the search engines Google, Yahoo, and other systems, the more their opportunities for sale are. Secondly, content marketing. Content marketing and SEO go hand in hand. It is through publishing articles, e-books, and other materials that sellers will be able to attract and create an audience and also optimize their positioning. By delegating this strategy to experts, they not only develop content tailored to buyer's characteristics and needs, but also use SEO to ensure that each one has higher visibility in search engines and, therefore, on the internet. Finally, email marketing. A good content strategy for e-stores involves email marketing, as it is a way to connect with users directly, in a practical and personalized way. Submitting content to a user's mailbox will leave them inclined to purchase the site's products and services and, besides, make them a member of the audience.

From the above, it is clear that e-commerce has clear advantages among other types due to considerable savings in time for consumers, working capital, as well as the presence of a continuous dialogue with end-users, elements of sales promotion. However, specifically, the creation of an appropriate infrastructure and legal framework, which will be analyzed in this study, will significantly facilitate the conduct of electronic commerce transactions.

1.3 Discoverers' work as the launch of a new mechanism

Many people think that the term e-commerce appeared suddenly, overnight; however, before it appeared, there were several predecessor concepts that laid the foundation for it to be what it is today. Of course, the highest peak of this evolution has not been reached, and there will be many more events in the future that will make the exchange of goods and services between people more productive, efficient and fast.

E-commerce originated as such around 1920 in the United States, where catalog sales appeared. This new distribution system was a big revolution, as it was the first time that a product could be purchased without seeing it before. Catalog sales were made by using illustrative photos of the product. The great advantage of this trading system is that it can be sold in remote rural areas.

In the 60s, a new concept appeared - Electronic Data Interchange (EDI). Electronic data interchange (EDI) is the process of exchanging documents in a standard format between different organizations. EDI helps people move data directly from one organization to another organization. EDI standards, which set requirements for placing information in EDI documents and messages, eliminate the need to recode information manually. An automated environment helps ensure high speed of information exchange: much faster than the exchange of paper documents and other methods of document exchange, which can take hours, days, and weeks. Organizations use EDI to integrate and forward various types of documents, from orders and invoices to commercial offers, loan applications, and more. In most cases, these organizations are partners who exchange goods and services, often within their supply chains and business networks. In its early days, the number of EDI projects could be counted on one hand, and the introduction of EDI meant only changing the way some documents used in operations were transmitted. Previously, a paper document, such as" product order," was sent to the supplier by Fax, but after the introduction of EDI, it began to be transmitted in the form of an electronic message. However, the same "product order" was passed along, and there were no significant changes in the business processes of its formation. It can be said that at this stage, the term EDI was most logical to translate literally, that is, as "electronic data exchange." Nevertheless, the implementation of EDI, even in this narrow sense, brought tangible benefits: it was possible to reduce costs and significantly increase productivity. The elimination of the "human factor" that is unavoidable in manual document exchange and the transition to automated data exchange between the two information systems helped to eliminate delays and errors, as well as reduce staff workload. Finally, the EDI automation technology has the following advantages: saving of time and money, automation of processes that were previously performed manually using paper documents; increasing of efficiency and productivity, processing a more significant number of business documents in less time; full EDI standardization helps ensure that information and data are correctly formatted before they are added to business processes or applications, reducing the number of errors; optimization of tracking and reporting, electronic documents can be integrated with a variety of its systems to organize data collection, visibility, and analysis; and creating positive impressions among customers, ensure efficient transaction execution and fast and reliable delivery of products and services.

For a decade after EDI, to be precise in 1979, English-born inventor Michael Aldrich (who is considered the inventor of e-commerce) believed that there should be another way to shop in the supermarket. For him, the weekly replenishment of the pantry and the purchase of other household goods turned out to be a whole expedition, and this situation was the reason that he came up with the idea to connect the television to the supermarket to order products. Aldrich worked quickly to develop his idea, and in 1980 he achieved his goal by creating the Teleputer, a device consisting of a modified TV connected to a computer with a telephone line, this device was able to process orders in real-time. This gave rise to a concept that he called teleshopping, which now we know as online shopping. Television provided the catalog trade with more sales of products, since they could be displayed, emphasizing their most important properties and characteristics. This direct sale was made by using phone calls, and payment was made via credit cards.

In 1982, the most successful predecessor of the Internet, Minitel, appeared in France. It was a service that allowed people to make purchases online, check phone numbers, or search for information about companies, including the ability to communicate and receive messages by email, just as it is done with the internet today. Unfortunately, Minitel was quickly replaced by the internet. However, at its peak in 1999, the service began connecting 25 million users, which generated revenue of more than 830 million euros in France.

1989 was a watershed year for technology, as well as for e-commerce later. In 1990, what we know today as the WWW (World Wide Web) appeared. Created by Tim Barners Lee, the internet or the world wide web has completely changed the future of communication and e-commerce. It was during this decade that two of the most essential and popular e-commerce sites were founded.

The first of these is Amazon, its founder Jeff Bezos founded a company called Cadabra on July 5, 1994, in Seattle, Washington, USA. Bezos subsequently changed the name to what it is known today. In June 1998, Amazon expanded its store range. Now people can buy not only books but also CDS and DVDs. The music section opened with 125,000 titles - much more than a regular music store. Not only did the store's assortment grow, but also the price of Amazon shares. By this time, one share was worth $ 10.42. In the fall of 1999, Amazon began using an innovation on its website that almost every online store has today-a one-click purchase. It was Amazon that first decided to simplify the order procedure in its store. Amazon has patented the ability to buy an item online with one click. This technology, called 1-Click, gives the company an early-stage advantage over its competitors. In November 2002, Amazon announced a partnership with several major clothing companies to offer 400 clothing brands in its online store. Amazon has now gone far beyond books, offering electronics, toys, beauty products, kitchen supplies, and even magazine subscriptions.

Using the example of Amazon here will be considered the development of e-commerce in the real world. Figure 1 (Appendix 1) illustrates global brand value from 2006 to 2019 and shows its success and relevance to our days. Amazon is included at the top of the best worldwide companies, and, moreover, the success of a brand is also determined by its revenue.

Amazon's founder and CEO, Jeff Bezos, is famous for his tireless orient on long term perspective development. Having overlooked critique for a considerable length of time, Bezos' readiness to compromise short-term benefits for long-term success has brought enormous profits, transforming his organization into a worldwide powerhouse and making it the wealthiest man in the world. The company has achieved all that by re-investing most of the money it makes. However, for the last two years, Amazon's net income exceeded $10 billion, indicating that the company is now making more money than even Jeff Bezos can invest. Figure 2 (Appendix 1) illustrates Amazon's strategy by contrasting the company's exponential revenue growth with its relatively modest benefit development.

Another key date in the development of e-commerce was September 3, 1995. When a website called AuctionWeb was founded by Pierre Omidyar. Today, this site is known as eBay. Strictly speaking, these two markets are the 2 main e-commerce pioneers and have dictated the tone of e-commerce consolidation, as they have led to the creation of other tools and services specific to e-commerce, such as processors for credit and debit card payments such as Paypal, and Dropshipping, software for creating virtual stores. Two other sites that have played an important role in the progress of e-commerce are Yahoo! and Google. The first was officially registered in 1995, and the second was created in 1998. These two search engines are used by millions of people to find the right products and services among many other things. Regardless of the niche or market segment in question, these tools are one of the main sources of attracting visitors (and therefore potential customers) to countless online stores.

Figure 3 (Appendix 2) describes the relatively stable growth of Google/Alphabet's market capitalization from 2004, the year of its IPO, until today.

So why did Google become such a staggering success? The most important technical advantage of Google is that all the computers used to search for information are collected and configured by the company's employees. This is probably its main know-how. Most people consider a personal computer (PC) as useful furniture, but Google itself collects and adjusts inexpensive computers, constantly increasing their capacity and number (today about a hundred thousand). No one company has a PC network as powerful as Google's. With such powerful hardware, Google is able to interact with millions of servers every day, providing search results quickly and without failures (and without human intervention), even if particular PCs fail. The company quickly realized that well-thought-out computerization can become a competitive advantage, and that it will be a key link in the ability to quickly and effectively search for information. And since the company constantly needs computers, it is more profitable for it to build them on its own. This is why the development of a search engine that could compete with Google requires a much more serious investment than it might seem at first glance.

Having built and established such a powerful technical base, Googlers are just as competent to approach the issue of generating income. The founders '"innovation" allowed them to make money on an "industrial" scale. Due to the introduction of text advertising links that users click on during the search process, the search engine became a money-making machine a few years ago. Google ads are extremely effective: it is offered to users when they feel the greatest need for it -- in the process of searching for information.

In 2005, another way of developing e-commerce became known, it is called Social Commerce. The concept was first introduced by Yahoo! and is described as a set of user tools and information to facilitate the decision to purchase products and/or services. Examples of the type of information used by Social Commerce are the reviews that users make about products, ratings that users give to these products, or recommendations that users make about a product or service. Blogs, discussion forums, and social networks such as Facebook, Twitter, or Pinterest are among the tools used by Social Commerce to help Internet users find useful information about products they are interested in, and thus help them choose the product or service that best suits them according to their interests.

More recently, with the advent of modern smartphones such as the iPhone, which was introduced in 2007, a new type of e-commerce, called mobile commerce, has emerged. The basics of m-commerce are the same as e-commerce, but with the uniqueness that it accompanies users wherever they go. Now the customer can purchase the product while they are drinking coffee with their friends.

The history of electronic commerce will be continued. Mobile Commerce is emerging as the digital commerce option that will have the greatest growth in the coming years. All these issues highlight the importance of continuous development of network infrastructure and clear regular base through different institutions. However, there are always some sort of disagreements between participants during conversations, but it is quite logically. Every representative presents interests of his/her country, wants to get maximum profits and rise the level of electronic commerce development, and, unfortunately, the biggest barrier to agreement is the deference between states development. The following research is analyzing ways of overcoming various kinds of issues, including the level of development.

Chapter 2. WTO as an instrument for resolving the main issues

There are no doubts that open and liberalized markets have a crucial importance for e-commerce development. This chapter of the research is advocated to main WTO sessions and attempts for electronic commerce advancement. Institutions should promote regulations in several aspects to maximize its development and success, for instance: standards for worldwide telecommunications infrastructure, investments in it; convenient access; legal regulatory environment, which provides property rights protection, including intellectual property, and contract enforcement; safety and confidentiality of data; rules of censorship; taxation and financial regulation and equal prospects through better professional education for a customer in industrialized and developing countries.

2.1 Initial barriers to success

Before analyzing the main sessions of WTO and its results, it would be helpful to outline the approximate problems which are relatively obvious. First of all, it is access to the infrastructure. All types of e-commerce, and especially Internet commerce, can be conducted precisely through a telecommunications infrastructure, which ensures sufficient volume for unimpeded information flows. Another one barrier for e-commerce can be inappropriate setting prices policy. Digital communication and commerce are frequently discouraged by high tie charges, which do not indeed represent the costs or lack of infrastructure. In other words, this is the difference between telecommunications fees in different countries, for instance, fees in Europe are much higher than in Russia.

The second issue is the legal and normative structure for Internet transactions. Moreover, foreseeable structure with precise rules on jurisdiction and electronic agreements, and reliable property rights, builds and increases trust in the network. The next key theme concerning e-commerce and Internet transactions is the necessity for legal clearness and appropriate compensation arrangement. Legal ambiguity can occur inside a state if electronic agreements are not clear from the standpoint of their enforcement or compensation potential. The universalization of current contract law to the electronic sphere can maximally reduce those uncertainties. Moreover, there are further questions regarding the guarantee of intellectual property rights for items and services fulfilled over the internet. Copyright protection is essential to support the accessibility of high-quality consumer goods on the internet. If proceeds from copyrights cannot be gained from e-commerce, such business is probably to be over altogether. Internet content rules will apply difficulties, and resolutions should not hinder communication and trade. Finally, Internet customers and regulatory bodies are often anxious about Internet interaction and commerce relating to the dissemination of "illegal" or "harmful" content. Contradictions of interest among adherents of the "freedom of speech" and security protection and human dignity are inevitably arising in connection with specific categories of Internet information. There would be no contradictions that specific kinds of content are merely inadmissible, such as bomb-making guidance.

Another issue that must be covered is security and privacy. Security and privacy of information must be defended. The main aspects concerning the integrity of transactions are the recognition of the consignor of goods and addressee (it means that the sender and receiver are specific people), the authentication of the message, and encryption of the fee information (that card numbers cannot be scanned by outside persons). Also, questions of taxation should be considered. The taxation of e-commerce must be simple and non- deforming. E-commerce, especially the internet, have a significant influence on the taxation. So, if a value-added tax or corporate income tax could be avoided through the internet, it would be more advantageous for merchants and purchasers also. However, unfortunately, it is not in the concern of the broad audience.

There were three ways that the WTO is addressing e-commerce and IT trade in the beginning: through the Work Programme on Electronic Commerce, which began in 1998; through the Information Technology Agreement "Plurilateral” treaty through which the participants undertake to remove tariffs on a certain list of IT products, which entered into force in 1998. The Information Technology Agreement was adopted at the first WTO Ministerial Conference (Singapore, 1996). It establishes the principles of international trade in Information Technology, provides for the gradual reduction of customs tariffs on information technology products and their elimination from 1 January 2000, and also represents the desire of the WTO member countries to eliminate non-tariff restrictions in this area. (ITA), and through negotiations under the Doha Development Agenda, which began in 2002. The Work Program is a research procedure through which WTO Members look through issues concerning the utilization of WTO agreements to electronic commerce. The Doha negotiations gave a vehicle for introducing new obligations and designing new duties to encourage electronic commerce and Information Technology trade. Moving to the chronology of the WTO Work Program on Electronic Commerce, the first stage was the Geneva Ministerial Conference. In May 1998 at the Geneva Ministerial Conference, the WTO Members adopted a declaration on worldwide e-commerce, such as setting up a "comprehensive work program to examine all trade-related issues relating to global electronic commerce, taking into account the economic, financial, and development needs of developing countries" (WTO Work Program on electronic commerce, 1998). The Electronic Commerce Declaration incorporates a political declaration calling upon participants to proceed with their present act of not imposing customs fees on electronic transmissions. The General Council established the system for the future work and included it in the order of business as a regular item.

Each topic ought to be investigated by certain authorities; everyone has their obligations due to a certain issue. According to the World Trade Organization, there are main bodies and their mandatories. GATT Council analyses dimensions of electronic commerce concerned to the GATT and other WTO agreements concerning trade in goods, for instance, Agreement on Rules of Origin, Agreement on Technical Barriers to Trade, Agreement on Antidumping, consisting: access to the markets, customs, import permission procedures, duties, technical standards, and categorization. GATS Council analyses the scope of e-commerce in the GATS normative-legal base, consisting: scale, Most Favored Nation, internal regulations, transparency, growing involvement of developing countries, privacy protection and public morals, access to markets and national treatment obligations on electronic provision of services, access to and use of public telecommunications transport networks and services and customs payments. TRIPS (Trade-Related Aspects of Intellectual Property Rights) Council considers intellectual property themes emerging concerning e-commerce, including protection and law enforcement of copyright and trademarks, latest technologies, and access to technology. CTD (Comparative Toxicogenomics Database) investigates the development consequences of electronic commerce, among them: impact of electronic commerce on trade and economic perspectives of developing countries (particularly SMEs); difficulties/resolutions to expanding involvement of developing countries as exporters of electronically delivered items, including the role of enhanced access to infrastructure, the transmission of technology, and the movement of the physical person; utilization of IT to incorporate developing countries into the multilateral trading framework; the impact of electronic commerce on a traditional way of distributing physical goods; and financial outcomes of electronic commerce.