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.

Having agreements that may not apply to all members also makes using the final agreements trickier for companies. The main reason for negotiating trade rules in the first place is to create common practices for businesses to help reduce risk and uncertainty in the trade environment. However, as the WTO has gotten bigger and as some members have grown bolder in their obsession with using the consensus principle as a means for blocking all actions, the institution has clearly gotten bogged down. One way to move forward is to allow smaller groupings to proceed with issues that matter to them. This process is now, apparently, going to begin again at the WTO. First on the agenda is the start of a possible work program on electronic commerce, supported by about 70 members.