The World Trade Organization (WTO) is expected to continue its negotiations regarding global trade regulation reforms. The international community has shared concerns about outdated global e-commerce laws in this new fast-moving digital economy. The WTO reforms must address a new universal regulatory framework for digital trade and new business models. As a multilateral body with 164 members, the WTO has substantial responsibility in shaping the future of global e-commerce.
After the G20 Leaders’ proposal on the WTO reform in Buenos Aires, the topic became an issue of priority at the G20 Osaka summit. The G20 Osaka summit has concluded some key points regarding the development of WTO e-commerce regulations. First, the summit highlighted the importance of the transparency of WTO’s members’ trade-related policies and stressed strengthening the function of WTO committees in operating their mandate. Second, it recognizes the importance of establishing a constructive work program on e-commerce. Third, the summit encouraged the WTO to continue its commitment to achieving progress in producing comprehensive regulatory reform. Fourth, the summit emphasized that it is essential to tackle these challenges by improving standards of free and fair trade. The summit also discussed that future regulation should be inclusive for women, young people, and micro, small, and medium-sized enterprises. Ultimately, G20 leaders emphasized the commitment to continue efforts to harness and enhance trade potential, and the digital economy.
While digitalization in international trade can accelerate productivity, innovation, job market expansion, and the development of small and medium-sized enterprises, there are some challenges in establishing a universal regulatory framework. The diversity in the economic systems of the WTO’s members might mean that it is too early for e-commerce to be regulated in a multilateral trading system. Therefore, proposals often encounter obstacles in negotiations.
Furthermore, there is still a question of whether or not the WTO is the right forum to establish global e-commerce rules. Even though the majority of WTO members have agreed that the WTO should officially include e-commerce guidelines, countries such as India, South Africa, and Indonesia still oppose the idea of putting e-commerce related rules within the purview of the WTO. It is deemed that regulations, should they proceed, might be against the basic principles of consensus-based decision making. In addition, the opposition is also concerned that WTO reform will create legal and technical issues through restrictions on cross-border data flow from specific sources, such as data generated by users like e-retail platforms owners, or through social media platforms. Furthermore, the business entity that collects or processes sensitive data from customers in one particular country and stores it abroad shall be required to adhere to certain conditions. For example, all data stored overseas should not be made available to other business entities outside the country, even with the customer’s consent. Complex issues like this require a more nuanced approach in order to prevent disputes.
The future of global e-commerce will largely rely on the WTO. Although it seems as though the implementation of e-commerce regulations under the WTO will take time, there is hope that member governments can develop their own strategies tailored to their own economic environment in preparation for the potential risks of the digital economy. There is also another significant concern that the e-commerce rule will not give equitable benefits to all countries. The more developed countries with established regulation and e-commerce markets will potentially obtain more benefits from uniform WTO regulations to accommodate their businesses. Meanwhile, many developing countries still have limited access to the internet, and subsequently e-commerce, thus these countries will likely acquire fewer benefits from the implementation of these regulations. Therefore, one of the WTO’s biggest challenges is to establish inclusive and fair practices that benefit all member countries.
Despite the quickly rising popularity of e-commerce, clear, universal, and comprehensive regulations have yet to be established. Although current multilateral trade rules are applied to some aspects of e-commerce issues, they need to be updated. Developing countries must deliberate on the possible risks and implications of the WTO-proposed e-commerce rules such as risk in data privacy, security, and intellectual property. Ultimately, economic liberalization could put current companies and jobs at risk if governments do not support strong national policies. Thus drafting new e-commerce policies should be focused on managing factors that might destabilize the economy.
