Published 13 August 2024
Some of the celebrations jumped the gun on the news that 82 WTO members had released a "stabilised text" on e-commerce at the end of last month. "Stabilised" does not mean final, not even close. As historic as it was for participants to get to the verge of agreeing the WTO’s first-ever set of rules on digital trade, its 82 signatories must now weigh what options they have to move forward against dissenting participants, including the US. And that’s where the trouble starts.
Despite the celebrations, the draft agreement on e-commerce circulated in the World Trade Organization on July 26, 2024, is still far from being a done deal because it still faces several hurdles, some likely to be tougher than the first step of securing agreement among the 91 participating countries. The 91 are 55% of WTO members, not the whole membership, making the talks “plurilateral”. Nine participants felt unable to support the text — Brazil, Colombia, El Salvador, Guatemala, Indonesia, Paraguay, Taiwan, Türkiye, and the United States — leaving 82 on board.
Like Olympic long-distance runners, the e-commerce talks are following in the slipstream of another plurilateral deal that took shape a year ahead of this one: investment facilitation for development. How the investment facilitation plurilateral got stuck tells us a lot about what the e-commerce deal faces. Aside from the subject matter, the two are similar. They would both set up new disciplines in new areas of WTO work (investment rules and e-commerce). They would not open markets, but would streamline governments’ procedures. Neither fall easily into the traditional categories of goods or services.
Download Getting to yes: What’s behind the e-commerce standoff at the WTO? by Peter Ungphakorn:
A key question is whether the two proposed plurilateral agreements avoid affecting non-participants’ existing rights and obligations in the WTO. The situation with the e-commerce text is ambiguous. Several provisions do involve participants favoring each other over non-participants. Preferential treatment does not violate WTO obligations under certain strict circumstances, but it remains unclear which preferential provisions of the e-commerce text might violate the General Agreement on Tariffs and Trade (GATT, for goods) or the General Agreement on Trade in Services (GATS), and which might not. This is so uncertain that participants are said to have discussed it but ducked the challenge of writing anything more specific in the text.
Where the "most-favoured-nation (MFN) treatment" principle is violated in GATT and GATS, a WTO-wide consensus would be needed to authorize it by adding the agreement to the rulebook, which brings us to the next challenge: getting all WTO members to agree. In the present climate that would be almost impossible to achieve. The 82 signatories of the stabilized text could end up taking their agreement outside the WTO, but this would significantly weaken the deal’s impact on actual e-commerce.
Does the WTO now have its first-ever set of rules on digital trade? Will it become a de facto global standard even if doesn't survive in the WTO? What options do proponents of the plurilateral solution for rule-making impasse at the global body have? The answers, in an assessment by one of Geneva's leading analysts of international trade rules and institutions Peter Ungphakorn, point to a morass of doubt, contradictions, and formidable obstacles on every path forward for the WTO's e-commerce deal.
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Author
Peter Ungphakorn
Peter Ungphakorn worked in the Information and External Relations Division of the WTO Secretariat from 1996 to 2015, part of the team briefing journalists, writing material for the WTO website and preparing public information on the WTO.
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