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

Also, in 2018, the first meeting of the Joint Statement Initiative (JSI) was held to examine the predictions and strategies of Members on electronic commerce issues. The signing of the first JSI was in December 2017. The 76 signatory countries contained developed nations, transition economies and developing nations, and also two least-developed countries (LDCs), Cambodia and Myanmar. There were a total of nine workshops where the ideas and suggestions of the participants were covered with the purpose of developing and approving the framework for the negotiation process. The course addressed the following topics: electronic commerce infrastructure; free trade environment/trade simplification; online transactions; customs duties; internal legislation; intellectual property and initial code; data privacy; network security; content localization; the concerns of developing countries and LDCs.

Concluding, the program of the JSI has built on basic principles of the WTO without damage to agreements and mandates already in place. Participation is available for all WTO Members and will be without harm to negotiators' positions on further negotiations.

3.3 Expectations for a progressive future

Series of negotiations in Davos, Switzerland, 2019. During meeting in Davos, Switzerland, on the agenda of the World Economic Forum in January 2019, representatives from 76 WTO countries, which covers for 90 percent of world trade, declared their willingness to launch WTO discussions on trade-related dimensions of e-commerce. They have said that in the joint report that they will "seek to achieve a high standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO members as possible" (WT/L/1056, 2019).

The General Council also observed a request from India and South Africa in April 2018, arguing for a review of the customs duties moratorium on digital transmissions. The proposed themes for consideration included: the framework and meaning of e-transmissions, the effects of the moratorium on income, the technological expediency of implementing customs duties on e-transmissions, and the wider effect of the moratorium on commerce and globalization. The representatives acknowledged the need for further research and information about the questions posed. Also, there was considered the problems highlighted by the LDCs which made it hard for them to become involved in and profit from electronic commerce included: poor awareness of the online market and electronic commerce networks; challenges in developing a practical institutional and regulatory framework; lack of business management frameworks to promote the formation and development of electronic commerce based enterprises; challenge in recognizing and overcoming the problems and potentially negative impacts of electronic commerce; absence of technology and infrastructure, including restricted access to specific information and technology facilities; restricted use of electronic payment bank cards; logistical limitations while transporting goods; and security of customers. The LDC Community planned to organize a special internal seminar to discuss how effectively address these difficulties.

Members engaged in the JSI organized the first conference of the year on 6 March 2019, where they addressed the negotiation phase and were welcomed to present their textual initiatives. By the end of 2019, six sessions of discussions had been finished, and the number of participants expanded to 83. The document proposals proposed by Members and topic to negotiation focused on 15 categories of questions: facilitation of digital transactions, non-discrimination and responsibility, consumer security, accountability, electronic transmission tariffs, data flow, security of personal data/confidentiality, cybersecurity, telecommunications, electronic trade simplification and logistics, network and information access, market trust, infrastructure development and technical support between participants, institutions and international organizations.

Although the documents on the negotiating rounds have bounded information concerning the roles of individual participants regarding the agreed texts, three main issues may be described as obstacles in the construction of the 12th Ministerial Conference in 2020. The first question concerns the lack of transparency and agreement on the framework and method for resolving issues concerning electronic commerce trade. Members questioned whether the strategy would include either a) establishing new regulations special to electronic commerce and its elements and enablers connected with the program, or b) updating existing WTO regulations. Participants are dealing with a quite rapidly changing trend whose full consequences are not yet evident or fully understood. The second point concerns the technological gap among developed economies and developing economies. Some of the administrators' documents note how the negotiations were of a very technical nature, requiring a great deal of clarification of the terms and digital frameworks and policies introduced by the developed Member States to other participants, who are not experienced with the innovation and do not have an adequate government policy structure. Some WTO members are therefore challenged to participate in negotiations or to classify the form of assistance they may require ensuring that they are able to commit and enforce new regulations and responsibilities. Third, the dispute over questions relating to data. There are wide gaps between three key members -- China, the EU, and the U.S.-- as well as among developed and developing states in aspects like data flows, data place, data collection invasions, customs tariffs and Internet taxation, and network censorship. Finally, it is necessary to emphasize that the JSI electronic commerce negotiations are occurring in a framework of the WTO that has experienced a variety of problems that may impact its general working in the future.

Conclusion

The turn of the 20 and 21 centuries was marked by transformations in all spheres of human development, due to which the global transition from an industrial to a new economy based on knowledge, intellectual resources, science-intensive and informational technologies is still being carried out. Since this new economy is based on an information-communication system, an essential component of it is the digitalization of international economic relations, the main product of which is electronic commerce. Since 2014, retail sales through e-commerce have grown by 2.2$ billion; in 2019, sales amounted to 3.5$ billion, and in 2023, according to analysts, it will be 6.5$ billion (Figure 5, Appendix 4). Also, in 2019 the share of electronic sales from all retail sales was 14.1%, compared to 7.4% in 2015, which indicates its growing relevance (Figure 6, Appendix 4). The central bodies dealing with the issue of electronic commerce at the international level are the WTO and UNCTAD. The Work Program on e-commerce is discussed and approved at the WTO's biannual Ministerial Conferences, which are the highest decision-making body in the organization.

Moving to the research question, the main problem is that the WTO still does not have specific multilateral rules that would regulate electronic transactions. The extent to which countries can regulate international trade via the Internet, what taxes should be levied on such trade, and how a state can discriminate against sellers in favor of domestic producers of similar products depends on which WTO rules a member state chooses. The existence of fundamental contradictions, such as the unresolved issue of classification of digital products, slows down and destabilizes the work of the WTO as an international institution. The organization now faces a difficult but vital task: to decide which path of development they will follow. It is evident that in this direction, it is necessary at least to reform the existing documents regulating trade in digital products or to create a fundamentally new agreement.

Nevertheless, even though the WTO can not directly affect the development of electronic infrastructure, it provides a platform for discussing problems and provides advisory assistance to interested countries on a recommendation basis. The conferences resolved a considerable number of issues that countries have faced in the development of e-commerce: creating an enabling environment for electronic commerce, including simplifying digital trade procedures and logistics, simplifying electronic transactions and customs duties on electronic transfers; the openness of electronic commerce, including market access, information flows and non-discrimination; confidence in electronic commerce, including issues of business confidence, consumer confidence, and intellectual property; cross-cutting issues, including transparency, infrastructure gaps and digital inequality, and cooperation. Also, many seminars from the most developed countries were held during the discussions, so that developing and least developed countries could look at the experience of other countries and develop a successful strategy. Enabling developing and least developed countries to benefit from electronic commerce remains a significant development challenge in the digital transformation era. However, despite this, it can definitely be said that there is a success. According to Figure 7 (Appendix 5), developing countries are included in the list of countries with the most significant growth in e-commerce, for instance, Mexico, India, the Philippines, Malaysia, Argentina, and Russia. Unfortunately, the preparatory discussions for one of the most important upcoming Ministerial Conferences were postponed due to the COVID-19 pandemic, but despite this, there are high expectations. The new rules, which are going to be adopted in the WTO, should create new opportunities and respond to the challenges that arise in the field of electronic commerce in both developed and developing countries. According to the agenda, the multilateral legal environment should protect both consumers and business representatives, make online trading more convenient and secure. The new rules, for example, should increase consumer confidence in online resources and help in the fight against spam, guarantee the validity of contracts and electronic signatures, eliminate customs taxes for electronic transactions, and eliminate the forced disclosure of data or access codes to such data.

In addition, one of the largest representatives of electronic commerce and online platforms will participate in negotiations and seminars. In recent years, China has registered an accelerated development of electronic commerce, which has played a considerable role in promoting trade and economic growth and promoting inclusive and sustainable development. As one of the most important large-scale and fast-growing e-commerce markets, China pays increased attention to international cooperation, positively develops relevant rules within the framework of bilateral and regional free trade agreements, has repeatedly submitted proposals, and has tried to reach a multilateral consensus. China supports the rules on electronic commerce established by the WTO. This will contribute to the WTO's role in negotiations, promote the necessary to WTO reforms to meet the needs of enterprises, and restore confidence in multilateral mechanisms and economic globalization on all sides.

Finally, after analyzing the work of the WTO in the field of electronic commerce over the past 20 years and plans for future work with a broad membership from all countries, including developed, developing and least developed nations, the established hypothesis can be proved. The WTO does promote globalization and liberalization of electronic commerce by helping countries to develop and resolve emerging issues. In the future conference, the WTO should concentrate more on settlement issues and the creation of a legal framework. Perhaps the right solution is to establish different conditions for different countries from an economic point of view. These measures can provide sustainable development and favorable conditions for developing and least-developed countries to be engaged in the trade.

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Appendix 1

Figure 1. Retrieved from https://www.statista.com

Figure 2. Retrieved from https://www.statista.com

Appendix 2

Figure 3 Retrieved from https://www.statista.com

Appendix 3

Figure 4 Retrieved from OECD (2013), "The App Economy", OECD Digital Economy Papers, No. 230, OECD Publishing, Paris,https://doi.org/10.1787/5k3ttftlv95k-en

Appendix 4

Figure 5 Retrieved from https://www.statista.com

Figure 6 Retrieved from https://www.statista.com

Appendix 5

Figure 7 Retrieved from https://www.emarketer.com

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