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Initiative
AT A GLANCE
Adopted:
1998
Status:
The examination of e-commerce issues continues in the respective bodies of the WTO. See the WTO's website (link below) for specific reports.

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INITIATIVE:

WTO's Work Programme on E-Commerce
Description

As mandated in the WTO's Declaration on Global Electronic Commerce (1998), the General Council was to establish a work programme "to examine all trade-related issues relating to global electronic commerce."

In the work programme it set out, the General Council gave itself a "central role in the whole process," with the responsibility of keeping the work programme under continuous review. In addition, the General Council was to take up trade-related issues that were cross-cutting. Matters relating to the imposition of customs duties on electronic transmission were to be examined in the General Council. Meanwhile, work relating to specific WTO agreements was assigned to the relevant bodies, which were then to report to the General Council. (See below.)

For the purposes of the work programme, the General Council defined the term "electronic commerce" to mean "the production, distribution, marketing, sale or delivery of goods and services by electronic means." The work programme was also to include consideration of "issues relating to the development of the infrastructure for electronic commerce..."

Council for Trade in Services

The General Council called on the Council for Trade in Services to examine and report on how the legal framework of the General Agreement on Trade in Services (GATS) applies to e-commerce. The issues to be examined were to include:

  • scope (including modes of supply);
  • the most-favored nation (MFN) non-discrimination principle;
  • transparency;
  • growing participation of developing countries;
  • domestic regulation, standards, and recognition;
  • competition;
  • countries' discretion to protect privacy and public morals and prevent fraud;
  • market-access commitments regarding the electronic supply of services (including commitments on telecommunications and distribution);
  • national treatment;
  • access to essential facilities (i.e. use of public telecommunications transport networks and services);
  • customs duties; and
  • classification issues.

Council for Trade in Goods

The General Council called on the Council for Trade in Goods to examine and report on how the provisions of the General Agreement on Tariffs and Trade (GATT) and the multilateral trade agreements covered under Annex 1A of the WTO Agreement relate to e-commerce. Among other things, the issues to be examined were to include: "market access for and access to products related to electronic commerce; ...issues arising from the application of the Agreement on Import Licensing Procedures; customs duties and other duties and charges...; standards in relation to electronic commerce; rules of origin issues; classification issues."

Council for TRIPs

The General Council called on the Council for TRIPS "to examine and report on the intellectual property issues arising in connection with electronic commerce." The issues to be examined were to include: "protection and enforcement of copyright and related rights; protection and enforcement of trademarks; new technologies and access to technology."

Committee for Trade and Development

The General Council called on the Committee on Trade and Development "to examine and report on the development implications of electronic commerce, taking into account the economic, financial and development needs of developing countries." The issues to be examined were to include:

  • "effects of electronic commerce on the trade and economic prospects of developing countries, notably of their small- and medium-sized enterprises (SMEs), and means of maximizing possible benefits accruing to them;
  • challenges to and ways of enhancing the participation of developing countries in electronic commerce, in particular as exporters of electronically delivered products;
  • role of improved access to infrastructure and transfer of technology, and of movement of natural persons;
  • use of information technology in the integration of developing countries in the multilateral trading system;
  • implications for developing countries of the possible impact of electronic commerce on the traditional means of distribution of physical goods;
  • financial implications of electronic commerce for developing countries."

Why is this initiative significant?

What is most notable about the WTO's work on e-commerce is that it is largely a decision to refrain from acting: It involves a political commitment to continue the "practice of not imposing customs duties on electronic transmissions," and it calls for an "examination" of all trade-related issues pertaining to international e-commerce. Meanwhile, the Internet has opened the floodgates for products that can be traded electronically.

However, as products increasingly flow across borders electronically, patterns of trade change, threatening old interests and giving rise to new ones. WTO members are naturally jockying for position as they study how previously agreed trade rules apply to this form of commerce.

Ongoing discussions focus on the following issues, among others (as reported on the WTO website): "classification of the content of certain electronic transmissions; development-related issues; fiscal implications of e-commerce; relationship (and possible substitution effects) between e-commerce and traditional forms of commerce; imposition of customs duties on electronic transmissions; competition; jurisdiction and applicable law/other legal issues."

The principle that trade commitments are "technologically neutral" arguably locks in past trade liberalization, while the WTO's dispute settlement mechanism reinforces the arrangement.



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