During the recent World Economic Forum Annual Meeting in Davos, Switzerland, a coalition of 76 WTO Members issued a second Joint Statement on Electronic Commerce on January 25, 2018, outlining their intent to commence trade negotiations on e-commerce. The participating members are expected to meet in March of this year to discuss organizational issues, including a possible timetable for future meetings.

While negotiations will proceed on a plurilateral basis, the signatories of this initiative have encouraged as many WTO members as possible to participate in the discussions. Discussions will also be open to non-participating countries that would like to join the negotiations at later time.

Participating WTO Members and Opposition to the Initiative

Major supporters of the initiative include the United States, the European Union, China and Japan. The initiative is also supported by a wide variety of other WTO Members, including Australia, Brunei, Hong Kong, Kazakhstan, Korea, Mongolia, New Zealand, Singapore, Chinese Taipei, Thailand, Georgia, Iceland, Liechtenstein, Moldova, Montenegro, Norway, Russia, Switzerland, Macedonia and the Ukraine. In total, the countries supporting the initiative account for 90% of global trade.

A number of lesser-developed countries, including India, oppose commencement of these negotiations. In their view, developmental issues covered by the WTO Doha Round should take precedence over a new set of negotiations on e-commerce matters. These members are concerned that they do not have the infrastructure needed to fully take advantage of the liberalization of digital trade.

Negotiated Outcome – What to Expect?

Supporters of the initiative expressed their intention to build upon existing WTO frameworks and agreements to achieve an agreement. Importantly, at this point, it is not expected that the discussions will result in an entirely new WTO agreement. Instead, the discussions are expected to expand existing WTO commitments that the participating members have undertaken. Moreover, because negotiations will proceed on a voluntary basis, the negotiated outcome may not be subject to the need tom achieve consensus among the participating members. Thus, should India and other non-participating countries oppose the negotiations and their outcome, the participating members will still be able to carry out their commitments on e-commerce.

The United States’ Position

Following the issuance of the Joint Statement on Electronic Commerce, the U.S. Trade Representative Robert Lighthizer issued the following statement:

The United States is pleased that the initial exploratory work on digital trade issues at the WTO in 2018 was productive. The digital economy is a powerful force for global economic growth. The United States is committed to seeking a high-standard agreement that creates strong, market-based rules in this area and reduces the barriers around the world that threaten to undermine the growth of the digital economy, including restrictions on cross-border data flows and data localization requirements. The United States strongly believes that to be successful these talks must lead to an ambitious, high-standard agreement that is enforceable and has the same obligations for all participants.

It is expected that the United States will have a determinant role in the shaping and outcome of the negotiations.