The United Nations Conference on Trade and Development (UNCTAD) has released a research paper reporting on progress in negotiations on digital rules under the Joint Statement Initiative (JSI) on e-commerce. This trade encompasses the production, distribution, marketing, sale or delivery of goods and services by electronic means. An agreement would likely be broad in scope and cover “almost all actions” by governments in the digital economy.
A significant number of World Trade Organization (WTO) members are negotiating digital rules under the Joint Statement Initiative (JSI) on e-commerce. While the WTO continues to develop its work under the Work Programme on Electronic Commerce, the document clarifies that the countries recognize that any initiative to negotiate rules for online commerce is outside the WTO agreement: their mandates and the negotiations under this Joint Declaration Initiative remain “outside the scope of the WTO.”The results of these negotiations on digital rules will have no legal effect at the WTO because the rules are not a mandate for negotiations there.
Thus, the document entitled "Joint Statement Initiative on E-Commerce (JSI): Economic and Fiscal Implications for the South«It highlights the digital rules being negotiated by JSI members that aim at free flow of cross-border data, mandatory legal frameworks for electronic transactions, restrictions on data localization, no customs duties on electronic transmissions, no disclosure of source code, mandatory membership of the Information Technology Agreement (ITA) and expansion of ITA and mandatory commitments on national treatment and market access. In addition, the paper analyzes the economic and fiscal implications of these digital rules for developing countries that are members of JSI.
UNCTAD warns that many of these digital rules have high compliance costs and could negatively affect the trade competitiveness of developing countries in the digital economy. On digital rules relating to facilitating electronic transactions, for example, it is stated that acceptance of the proposed rules would “severely restrict the regulatory space of governments in the digital economy” and strengthen the role played by foreign actors, such as investors and exporters. Negotiated rules on electronic authentication and electronic signatures would raise the cost of compliance and put domestic firms in developing countries at a disadvantage compared to foreign firms, which already use digital technologies. On electronic transmissions, the paper states that the broader the definition, the greater the potential loss of tariff revenue for developing countries: it is estimated that these countries would lose around US$ 10 billion per year as a result. The paper also notes that WTO least-developed countries (LDCs) could generate five times more tariff revenue than developed countries if the moratorium on customs duties on electronic transmissions is removed.
Furthermore, the UNCTAD Business-to-Consumer E-Commerce Index 2020, where Switzerland rises to the top of the rankings, finds that LDCs occupy 18 of the 20 lowest positions, suggesting the need to address the weaknesses of lagging countries to ensure inclusive development.
In conclusion, The paper argues that developing countries “need at least the same policy and regulatory space to build their digital infrastructure and digital economies that developed countries had at the start of their digital advancement.”UNCTAD stresses the importance of maintaining the regulatory and policy space to own and regulate data.
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