E - Commerce
The World Trade Organisation (WTO) Work Programme on Electronic Commerce
The WTO began considering the implications of electronic commerce in 1998 with the launch of the Electronic Commerce. This followed a decision by the Second Ministerial Conference in Geneva in May 1998 "to examine all trade-related issues relating to global electronic commerce" and "the economic, financial and development needs of developing countries". The Fourth Session of the Ministerial Conference in Doha in 2001, noting the progress made by the Work Programme and the importance of creating an environment favourable to the future development of e-commerce, agreed to its continuation.
In consequence the General Council agreed, following Doha, to maintain the earlier institutional arrangements for handling the Work Programme, namely that the Councils for Trade in Services, Trade in Goods and TRIPS, and the Committee on Trade and Development would examine and report on aspects of electronic commerce relevant to their respective areas of competence with the General Council consenting to keep this process under constant review and to consider any cross-cutting trade related issue.
The key cross-cutting issue has been the disagreement over the classification, for WTO purposes, of certain products, that is digitised products with a physical equivalent - should they be classified as a service as the EU believes and hence under the GATS, or as a good as the US asserts and so under the GATT? Other cross-cutting issues include jurisdiction and applicable law, fiscal and revenue implications, provision of technical assistance to developing countries and issues relating to the development of e-commerce in general.
A complementary decision at the 1998 Ministerial and subsequently renewed in parallel with the work programme has been the Customs Duty moratorium on electronic transmissions.
There are two other relevant WTO work areas. The first is the host of relevant negotiations on liberalising trade in services, which are germane to several aspects of e-commerce, in terms of services which allow e-commerce to function better and those which will benefit most from its application. Negotiations on this opened in Geneva on 25 February 2000.
The second is the question of developing the Information Technology Agreement (ITA) under which signatories (currently 60 accounting for over 90% of world trade in IT products) accord duty free treatment to an agreed range of IT products. The UK is anxious for progress to be made on this too, in terms of widening the range of goods and tackling non-tariff barriers.
Why is electronic commerce important?
Electronic commerce offers the prospect of rapid growth, especially through the expansion of Internet services and digital television. Growth in cross-border transaction volume is expected to be just under 10% annually over the decade from 1997, to a total of 4.6 billion transactions worldwide in 2007.
Electronic commerce is revolutionising trade in many services, as well as providing many new opportunities for trade in conventional goods. Electronic commerce is also an important tool for Trade Facilitation, as well as providing substantial opportunities for public procurement to be more transparent and efficient.
Electronic commerce is a valuable means for all companies trading internationally but it offers particular benefits to Small and Medium-sized Enterprises (SMEs) and developing countries by facilitating direct access to the global market.
The UK position
The UK has contributed substantially to the EU position on the WTO Work Programme on Electronic Commerce.
The UK is also working closely with the EU on further liberalisation of Trade in Services It is important that service sectors necessary for e-commerce to flourish, and services which can benefit most from the application of e-commerce, are given priority during the negotiations. The UK believes that e-commerce must be integrated into the multilateral trading system as soon as possible. E-Commerce must fit within the wider framework of multilateral trade policy which has been developed over the last fifty years to secure open markets - while, for example, ensuring proper protection for Intellectual Property Rights (IPRs) – and that those rules must also be developed as necessary to ensure that the benefits e-commerce has to offer, such as global prosperity, can be fully realized.
The UK believes that electronic commerce should continue to be free of customs duties. The UK will continue to engage in the debate as to whether all electronic commerce, including on-line delivered products, should be classified as services for WTO purposes. Meanwhile it should be noted that goods delivered physically even if ordered and paid for electronically, still remain subject to normal Customs controls and payment of duties and taxes, as goods, governed by the Information Technology Agreement.
The first phase of the World Summit on the Information Society took place in Geneva 12 - 14 December 2003, in which the representatives outlined their common desire to build a people-centered, development-oriented Information Society and created an action plan to achieve this objective.
On 19/20 June 2000, the European Council in Santa Maria da Feira, Portugal, agreed to implement the objective set out by the Lisbon Council of 23/24 March 2000 to draw up a comprehensive E-Europe Action Plan (e-Europe 2002 – An information society for all"). Details on further developments on the European Union's e- commerce action plans are available from the European Commission’s Europe's Information Society web page.
Apart from the WTO, the Organization for Economic Cooperation and Development (OECD) has produced detailed recommendations on a number of issues related to e-commerce such as taxation and enhancing access.
Contact:
Andrew Dey
Tel: 020 7215 5590
Fax: 020 7215 4512
Email: andrew.dey@berr.gsi.gov.uk