Current Accounts: The Hinrich Foundation Trade Podcast
What’s at stake if the WTO fails its global e-commerce deal?
Published 20 August 2024
In this special edition of Current Accounts, the Hinrich Foundation’s podcast on global trade, the US Association of Foreign Press Correspondents interviews Deborah Elms on a group of WTO members reaching a landmark draft set of e-commerce rules, and the consequences on the global trading order if the WTO fails to adopt the agreement.
Tune in to this special episode hosted by the Association of Foreign Press Correspondents in the United States here:
In July, the Joint Statement Initiative (JSI) on Electronic Commerce achieved a historic milestone in global trade, as 82 World Trade Organization (WTO) members released a "stabilized text", potentially setting the first digital trade rules. This is a significant development, addressing the WTO's previous lack of a digital trade framework and aiming to create unified, consistent regulations for e-commerce. This agreement, remarkably, was reached without the participation of United States. However, China and the European Union are on board the proposal, which was convened by Singapore, Australia, and Japan; its supporters include a wide range of smaller nations such as Benin and Laos.
The draft deal is particularly significant for developing countries, which face significant challenges in e-commerce due to regulatory fragmentation. By addressing these challenges, the e-commerce rules aim to foster a more equitable digital trade landscape worldwide. The initiative’s inclusive approach includes commitments for cooperation and development, helping them integrate into the global digital economy. The agreement also aims to facilitate trade for smaller firms by allowing electronic paperwork and signatures, simplifying cross-border transactions.
Despite the progress, achieving consensus at the WTO remains a challenge. Although 82 WTO members have endorsed the JSI’s text, some remain dissatisfied, complicating the integration of these rules into the broader WTO framework. Any dissenting member, including the US, can block progress, leaving the signatories to navigate these disagreements and determine the path forward.
Tune in to this special episode as Deborah Elms, Head of Trade Policy at the Hinrich Foundation, dissects the WTO's potentially historic e-commerce agreement and its potential impact on the future of digital trade.
Here is an excerpt from their conversation:
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Alan Herrera: |
So then in light of this agreement and moving forward, what are the prospects for future digital trade agreements within the WTO and perhaps other international trade bodies? What can we expect? |
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Deborah Elms: |
Well, I would love to say that it’s going to be a piece of cake. Unfortunately, the evidence at the moment is not great. I mean, we have just two simple examples for me. One of the other JSIs created an informal working group for micro, small, and medium sized enterprises at the WTO. Okay, so let me just repeat that. It’s an informal working group on small companies. It doesn’t have the full membership. Now, this is just a mystery to me. How in the world could you possibly argue against helping small companies? Every single economy is dominated by small businesses. They are the backbone of every single economy, and yet we can’t get 166 members to say, "Yes, we support an informal working group on this issue." That’s a problem. A second challenge in the JSI category. So we didn’t have all of the members, we got some of the members, not all of the members. In a second working group, one of these JSIs on investment. They have tried four times now to hook that agreement into the larger WTO context. And they have failed because there are members, very vocal opposition from three members, maybe less than three, depends on which day you’re talking about. But basically, a very small number of members, which is a problem because if you can’t get that investment agreement anchored into the WTO, you will have additional challenges thinking about how you are going to get an e-commerce agreement, which is much more controversial, anchored into the WTO. And so I would like to say this is the beginning of a new dawn and it’s going to be awesome, but I’m a little nervous that the members will struggle to implement this within the WTO framework. |
Tune into the Hinrich Foundation’s podcast series for insights on international trade.
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Author
Deborah Elms
Dr. Elms is Head of Trade Policy at the Hinrich Foundation in Singapore. Prior to joining the Foundation, she was the Executive Director and Founder of the Asian Trade Centre (ATC). She was also President of the Asia Business Trade Association (ABTA) and the Board Director of the Asian Trade Centre Foundation (ATCF).
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