by Fanni Fürjes
At the 11th Ministerial Conference in December 2017, a group of 71 World Trade Organization (WTO) members agreed to initiate exploratory work towards future WTO negotiations on trade-related aspects of e-commerce. After almost seven years of negotiations on 26 July 2024, the co-conveners of the joint statement, Australia, Japan and Singapore, confirmed in a statement on behalf of the participants that they finalised a consolidated text of the Joint Statement Initiative on Electronic Commerce (JSI, initiative or agreement), but in the same time they declared that a number of significant issues were not addressed.[1] This agreement is a testament to the commitment of WTO members to harness the potential of digital trade, benefiting consumers, businesses, and especially micro, small, and medium-sized enterprises (MSMEs).[2] Here, we delve into the essence of this initiative and its implications for global trade.
The JSI underscores the WTO's pivotal role in promoting open, transparent, non-discriminatory, and predictable regulatory environments, essential for facilitating electronic commerce. By recognizing the dynamic nature of cross-border e-commerce and digital technology, the initiative sets the stage for ongoing and future negotiations to address emerging issues and enhance the agreement further.[3]
The JSI aims to revolutionize global trade by creating a cohesive framework that addresses the multifaceted nature of digital commerce. The key implications include:
- By eliminating customs duties on electronic transmissions and promoting paperless trading, the agreement lowers barriers, facilitating smoother cross-border transactions.
- Robust provisions on consumer protection, data privacy, and cybersecurity build trust in digital transactions, encouraging more consumers to engage in e-commerce.
- The agreement's focus on technical assistance, capacity building, and inclusive frameworks supports MSMEs in leveraging digital platforms to expand their market reach.
- Encouraging the adoption of international standards and interoperable systems ensures a more predictable and streamlined regulatory environment across member countries.
The initiative establishes the validity and legal effect of electronic signatures and authentication methods, promoting mutual recognition and interoperability, and it states that parties cannot deny the legal effect and the use of electronic signatures as evidences.[4] This will pave the way for smoother cross-border trade.[5] Furthermore, with certain exceptions, parties may not deny the legal effect, validity or enforceability of an electronic contract solely on the ground that the contract was made by electronic means that ensures the legal enforceability of electronic contracts and supports the use of electronic invoicing to enhance transaction efficiency. It requires the electronic release and publication of documentations in customs procedures and advocates for eliminating paper forms in trade documentation and enhancing system interoperability through single window frameworks.[6] By facilitating the establishment of an electronic single trade window, the initiative will simplify import, export and transit procedures for businesses. This will make trade faster, simpler and cheaper, while improving compliance, safeguarding and security across the supply chain.[7]
The agreement promotes the development of secure, efficient, and interoperable electronic payment systems, fostering innovation and competition, and it provides a basis for developing regulations for this crucial sector and promotes transparency and the adoption of international regulatory standards.[8]
It prohibits the imposition of customs duties on electronic transmissions, reflecting the significance of the Work Programme on Electronic Commerce, but this will be reviewed in the fifth year after the entry into force of the agreement, and periodically thereafter, to assess the impact of this article. The provisions aims to encourage digital access to government data, increasing transparency and promote economic and social development.[9] Article 13 encourages adherence to principles that ensure that the end users’ access to the Internet is free from discriminatory and unfair commercial practices.[10]
An important point is that consumers involved in e-commerce should be afforded at least the same level of consumer protection as consumers involved in other forms of commerce, and because of that, efforts should be made to adopt additional rules. [11]
The JSI stipulates measures to protect consumers from misleading, fraudulent, and deceptive commercial activities in electronic commerce that requires measures to limit unsolicited commercial messages, thereby enhancing the users trust, the commercial electronic messaging service suppliers should help recipients prevent the continued receipt of unsolicited electronic messages.[12]
To protect personal data, JSI emphasizes the need for robust personal data protection frameworks to build consumer confidence and it also recognizes the importance of addressing cybersecurity threats through national capability building and international collaboration.
As cybersecurity threats can also undermine confidence in electronic commerce, the parties to the intiative should endeavour to build the capabilities of their respective national entities responsible for cybersecurity incident response, and collaborate to identify and mitigate malicious intrusions or dissemination of malicious code that affect electronic networks, to address cybersecurity incidents in a timely manner, and to share information for awareness and best practices.[13]
The initiative calls for the timely publication of all measures affecting the functioning of the agreement in the interests of transparency and cooperation, encourages global cooperation to facilitate access to e-commerce, especially for under-represented groups and SMEs, and stresses the importance of technical assistance and capacity building for developing and least developed countries, supporting their participation in digital trade.[14] From working together to increase inclusion in digital trade, to sharing experience on laws and regulations, the agreement will facilitate collaboration on digital trade to truly unlock the transformative potential of digital trade for the benefit of people, businesses, workers and consumers around the world.[15]
An important provision of the JSI that it will establish a committee to monitor and facilitate the agreement's implementation, ensuring continuous improvement. The Committee will be open to all Parties and will have an own Chairperson and Vice-Chairperson, and will meet as needed or envisioned by the agreement, but no less than once annually.[16]
As a conclusion we can state that the JSI is a landmark achievement in the WTO's efforts to modernize and enhance global trade frameworks. By addressing the diverse aspects of electronic commerce and promoting inclusive, transparent, and predictable regulatory environments, the JSI sets a robust foundation for the future of digital trade. As member countries proceed with their domestic processes to integrate this agreement into the WTO legal framework, the global community stands on the brink of a new era, where digital commerce can thrive, benefiting economies and societies worldwide.
[1] WTO: Joint Statement Initiative on E-commerce, 2024.
https://www.wto.org/english/tratop_e/ecom_e/joint_statement_e.htm
[2] European Commission: Commission welcomes text of global E-Commerce Agreement negotiated at the WTO, 2024. https://ec.europa.eu/commission/presscorner/detail/en/ip_24_4022
[3] Digital Watch: The WTO Joint Initiative on e-commerce, 2024. https://dig.watch/processes/wto-ecommerce
[4] JSI Article 5.
[5] GOV.UK – WTO Joint Initiative on E-Commerce guidance, 2024.
[6] JSI Article 6-9.
[7] GOV.UK – WTO Joint Initiative on E-Commerce guidance, 2024.
[8] JSI Article 10.; GOV.UK – WTO Joint Initiative on E-Commerce guidance, 2024. https://www.gov.uk/government/publications/world-trade-organization-joint-initiative-on-e-commerce-guidance/wto-joint-initiative-on-e-commerce-guidance
[9] JSI 11-12.
[10] International Institute for Sustainable Development Report: WTO Joint Initiative on E-Commerce State of Play, 2024. https://www.iisd.org/system/files/2024-07/wto-joint-initiative-e-commerce-state-of-play.pdf
[11] JSI Article 14.
[12] JSI Article 15.
[13] JSI Article 17.
[14] JSI Article 18-19.
[15] GOV.UK – WTO Joint Initiative on E-Commerce guidance, 2024.
[16] JSI Article 28.
