WTO e-commerce

Making E-Commerce and Digital Trade Work for Smaller Firms

Making E-Commerce and Digital Trade Work for Smaller Firms

The list of obstacles could go on.  The point is that the promise of selling globally comes with increasing challenges.  Hence the very good news that the World Trade Organization (WTO) has launched talks in Geneva to begin to create some global rules to sort out some of these issues.  For smaller firms, global rules can at least ensure that added expense and time becomes a necessary part of doing business, rather than an irritating element of doing business with some countries. The size of the “prize” is huge.  Estimates are all over the place on the current size of the digital economy, but Asia tends to lead the way.  An extremely useful series of reports just released by the Hinrich Foundation on eight economies in the region (five out now: Vietnam, China, Indonesia, Malaysia and Australia) shows how much additional trade might be gained from eliminating barriers to digital trade. 

The Challenge of Reforming the Global Trading System

Having negotiations just over rules will require flexibility by members because it will be much harder for members to return home and clearly point to “gains” from WTO changes.  In many places, adjustments to specific provisions could even lead to short term challenges. But without any way to address legitimate demands by many members to more accurately reflect the situation in the global trade regime in 2018 and beyond, the system itself is under increasing threat. We have forgotten how important the WTO has become to the business world.  It operates like air.  It is only when it is missing that it becomes obvious how much it was needed. Without creativity and flexibility by all members, the WTO is at risk of evaporating.  The focus ought to be on updating the global rule book, rather than increasingly carving up and out smaller and smaller bits of the economy to be tailored for various member interests. 

Digital Trade and E-Commerce Policies in Northeast Asia

Overall, the review of policy at the domestic level shows that governments have not yet figured out the best approach for creating supportive and enabling frameworks for digital trade and e-commerce.  To date, much of the official response has been fragmented between ministries and agencies, with little coordination. Digital trade is unlike many other sectors—it cuts across an increasingly wide swath of the economy and regulatory policies in one area often has knock-on or unintended consequences in other areas. It is also rapidly evolving, which is making it difficult for government officials to address.  If governments are too far out in front, too prescriptive or too forward leaning, they risk cutting off new sources of innovation and growth.  They may unintentionally box in specific technologies or platforms. Yet it can be very difficult to think about regulating for outcomes, since it requires bureaucrats to have a visionary sense of the future that few individuals are likely to have.  Creating digital economy policies at the domestic level, in any case, is probably not the best or most effective way to create sensible regulations.  The digital economy does not recognize national boundaries.  It does not logically stop at a customs border. Hence, the more efficient and effective way to manage digital policies is at the regional or international level.