E-commerce: Road ahead may be challenging, expert says

 

China will continue to play a constructive role in the ongoing negotiations on e-commerce at the World Trade Organization to help foster high-standard, balanced and inclusive digital trade rules that will enable developing members to harness relevant opportunities and reap the benefits, officials and experts said.

 

The global digital trade rules on certain articles that have already been drafted herald a promising outcome, but experts said the participating parties will have tougher nuts to crack, such as permanent exemption of tariffs on electronic transmissions and cross-border data flows, and will need more time for discussions.

 

On Dec 20, Singapore, Japan and Australia, co-conveners of the WTO Joint Statement Initiative on E-Commerce, announced the conclusion of negotiations on global digital trade rules covering 13 articles in the three broad areas of digital trade facilitation, open digital environment and business and consumer trust.

 

In the course of the negotiations, China emerged as a key participant and major proponent, presenting nine proposals covering over 20 specific issues, most of which have been incorporated into the consensus, said an official with the department of WTO affairs at the Ministry of Commerce on Monday.

 

A total of 90 WTO member economies, including 47 developing economies and five of the least developed ones, have been involved in the negotiations, which kicked off in January 2019. The economies contribute to 90 percent of total global trade.

 

In particular, China has been vocal in calling for solutions that address the concerns of developing members, advocating for negotiated outcomes that benefit the interests of developing countries, the official added.

 

Going forward, the participating parties will continue discussions on key topics such as duty-free electronic transmissions, electronic payments, telecommunication services and the provision of information and communication technology products that use cryptography, the official said, noting that participants will strive to conclude negotiations in a timely manner in 2024.

 

"Digital trade is a new engine of global trade growth in the 21st century. The WTO Joint Statement Initiative on E-Commerce is the core platform for global digital trade rule-making," said Minister of Commerce Wang Wentao in a written statement on Dec 20.

 

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said the rapid rise of digital technologies has fueled the flourishing global digital economy and created new opportunities for international trade. However, the absence of dedicated rules poses challenges in effectively addressing the complexities and unique dynamics of this rapidly evolving sector.

 

The negotiations will help establish a robust and inclusive framework that accommodates the diverse needs and interests of all participants and assists member economies, particularly developing nations, in integrating into the international trading system, Bai said.

 

The positive outcomes of the trade negotiations also align with China's vision of further integration into the global economy and promoting international trade, Bai added.

 

According to WTO data, China's digitally deliverable trade in services amounted to 2.5 trillion yuan ($349.9 billion) in 2022, marking a growth of 78.6 percent compared with five years ago. Meanwhile, its scale of cross-border e-commerce imports and exports reached 2.1 trillion yuan, reflecting a growth of 30.2 percent from two years ago.

 

The recent attainment of some consensus marks a positive signal, but the road ahead may still be challenging, said Tu Xinquan, head of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

 

The remaining issues, such as removing tariffs on electronic transmissions, cross-border data flows, source code protection and data localization, not only carry significant economic implications but can be sensitive in political and social domains, requiring extensive consensus-building, Tu added.

 

Despite the complexities, WTO members, by maintaining open talks and finding common ground, can work together toward establishing a rules-based system that fosters global economic growth, innovation and inclusive development, Tu said.