World Trade Organisation circulates consolidated negotiated text on e-commerce rules among members and progress expected by 12th WTO Ministerial Conference

EU – ECOMMERCE

The World Trade Organisation has circulated its consolidated negotiated text on e-commerce rules among WTO members, following discussions and negotiations. Despite highlighting issues between WTO members such as the digital divide and data flows, substantial progress is expected at 12th WTO Ministerial Conference. 

Key date(s)

• 25 January 2019 – At the World Economic Forum in Davos, the EU and 48 other World Trade Organisation (“WTO”) members issued a joint statement declaring their intention to start negotiations to introduce global rules on the trade-related aspects of e-commerce (the “Joint Statement”).
• 26 April 2019 – In response to the Joint Statement, the EU submitted its negotiating proposals for a range of WTO disciplines and commitments relating to e-commerce (the “EU Proposal”), ahead of the negotiations.
• 27 May 2019 – The European Council adopts the WTO negotiation mandate to enable the European Commission to participate in plurilateral negotiations regarding e-commerce.
• 7 December 2020 – Following negotiations and discussions between WTO members (including the EU), a consolidated negotiated text capturing the progress so far and which will form the basis for future discussions (the “Consolidated Text”) was circulated among WTO members.
• June 2021 – Substantial progress is expected by the 12th WTO Ministerial Conference regarding e-commerce, based on the Consolidated Text.

Status

• Since the mid-1990s, the WTO has been engaged in various rounds of preparation, discussion, and action regarding e-commerce, following an initial agreement between a handful of WTO members to agree to expand world trade in information technology, morphing into a more considered work programme on e-commerce designed to examine and promote a much broader range of trade aspects regarding e-commerce.
• For the European Commission to participate fully in the negotiations on behalf of the EU, it was necessary to supplement its existing mandate for the Doha Development Agenda (a series of trade negotiation rounds) to also cover the EU’s position on trade-related aspects of e-commerce.
• On 27 May 2019, the European Council adopted the WTO negotiation mandate to allow the European Commission to continue to participate in plurilateral negotiations on e-commerce, on the basis of the EU Proposal.
• From May 2019, plurilateral negotiations and discussions regarding e-commerce have been ongoing and the Consolidated Text was circulated among participants on 7 December 2020.
• Substantial progress to narrow differences and reach an agreement is expected in relation to e-commerce rules, based on the Consolidated Text, in the lead up to, and during, the 12th WTO Ministerial Conference which is expected to take place in June 2021.

 What it hopes to achieve 

• Despite the rapid growth of international e-commerce (which has accelerated due to the COVID-19 pandemic), there are currently no multilateral rules regulating digital trade. The lack of multilateral rules regulating digital trade has led to there being differences in domestic digital regimes and conflicting data governance rules which has increased trade barriers, limited investment flows, and restricted the ability for businesses and consumers to enter and compete in some markets.
• The WTO negotiations recognise the need for modernisation to enhance the benefits of e-commerce for businesses, consumers, and the global economy.
• The Consolidated Text was based on WTO members’ proposals. During 2020, there were extensive discussions on proposals covering the following themes: enabling electronic commerce; openness and e-commerce; trust and e-commerce; cross-cutting issues; market access; telecommunications; as well as scope and general provisions.
• Negotiations have also considered the following particular areas: consumer protection; spam; e-signatures and electronic authentication; paperless trading; digital trade facilitation; source code; open government data; market access; customs duties on electronic transmissions; and open internet access.
• The aim is for a high-standard outcome to be achieved which builds on existing WTO agreements and frameworks and which has the participation of as many WTO members as possible.

Who does it impact? 

• The international e-commerce market including both businesses and consumers. There are now 86 WTO members involved in the negotiations, collectively accounting for over 90 per cent of global trade. Businesses and consumers in almost all geographical regions will therefore be impacted.

Key points 

1. Data flows

• • Negotiations on data flows are ongoing and will intensify from early 2021. Provisions that enable data flows are necessary for a commercially meaningful outcome.
  • However, this is an area where there is particular divergence between the WTO members, especially between China, the EU, and the US.

2. Digital divide

• • The WTO negotiations highlight the digital divide between developing and developed economies. Some WTO members have had challenges in engaging in the negotiations as discussions have been very technical in nature and involving technology that developing country members are not familiar with.

3. Lack of consensus

• • There is a lack of consensus on the scope and approach of addressing e-commerce trade-related points. There are cross-cutting issues related to e-commerce and the wide definition used under the WTO Work Programme has made it difficult to narrow down the scope of the discussions.

This blog post provides an overview of a key recent or upcoming development in digital regulation in the UK or EU as part of our horizon scanning timeline which can be found below.

Contacts

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