Role of WTO in e-Commerce
- October 17, 2023
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Role of WTO in e-Commerce
Subject :Economy
Section: External Sector
Context:
- India’s Pitch at WTO: New Delhi’s emphasis on collaborative efforts among member countries to counter the dominance of a few large MNCs in the global e-commerce industry.
- Uneven Division of Benefits: India’s communication stressed that the current benefits of e-commerce are disproportionately skewed in favor of a select group of major multinational corporations (MNCs).
- Opposition to Plurilateral Talks: Developing nations, including India and South Africa, have been resisting the plurilateral talks, citing violations of the WTO’s foundational principles.
- Promotion of Competition: India proposed the sharing of experiences among member countries to enhance competition in digital markets and recommended improved cooperation between regulatory authorities to achieve this objective.
- Local Investigations: In India, companies like Amazon and Flipkart have faced inquiries by the Competition Commission for alleged instances of anti-competitive practices.
- Collaboration Between Regulators: The paper underscored the necessity of close collaboration among regulators from different jurisdictions, particularly considering the global nature of internet and digital businesses.
- Capacity Building for Developing Countries: India urged developing countries, including LDCs, to identify their constraints in adopting policies for ensuring fair competition in the e-commerce space. It sought suggestions for capacity-building initiatives.
Geneva package
Under 12th Ministerial Conference of the WTO agreed to a series of deals relating to the temporary waivers on Covid-19 vaccines, a moratorium on e-commerce trade, food security, and setting limits on harmful fishing subsidies.
Together these agreements are referred to as the “Geneva Package”.
Ministerial Conference (MC)
The Ministerial Conference is the WTO’s top decision-making body and usually meets every two years. All members of the WTO are involved in the MC and they can make decisions on all matters covered under any multilateral trade agreements. The WTO’s 12th Ministerial Conference was held in Geneva.
Key takeaways
Curtailing harmful fishing subsidies
A multilateral agreement was passed to curb ‘harmful’ subsidies on illegal, unreported, and unregulated fishing for the next four years, to better protect global fish stocks.
Global Food Security
Members agreed to a binding decision to exempt food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes, from any export restrictions. However, countries would be allowed to restrict food supplies to ensure domestic food security needs.
Covid-19 vaccine production
Members agreed to temporarily waive intellectual property patents on Covid-19 vaccines without the consent of the patent holder for 5 years, so that they can more easily manufacture them domestically. The waiver did not cover all medical tools like diagnostics and treatments.
E-commerce transactions
All members agreed to continue the long-standing moratorium on custom duties on e-commerce transmissions until the subsequent Ministerial Conference.
India’s interest secured
India and other developing countries were able to win some concessions on fishing subsidies. They successfully lobbied to remove a section of the proposal that would threaten some subsidies which would assist small-scale artisanal fishing. The agreements hold that there would be no limitation on subsidies granted or maintained by developing or least-developed countries for fishing within their exclusive economic zones (EEZ).
Current moratoriums on electronic transmissions been extended
- Member countries agreed to extend the current moratorium on not imposing customs duties on electronic transmission (ET) until MC13.
- ETs consist of online deliveries such as music, e-books, films, software, and video games. They differ from other cross-border e-commerce since they are ordered online but not delivered physically.
- Proponents had put forth that the moratorium would help maintain certainty and predictability for businesses and consumers, particularly in the context of the pandemic.
- India and South Africa, citing data from the UN Conference on Trade and Development submitted that extending duty-free market access due to the moratorium resulted in a loss of $10 billion per annum globally — 95% of which was borne by developing countries.
World Trade Organization (WTO)
The WTO is the primary global international organization responsible for trade regulations among nations.
History
- General Agreement on Tariffs and Trade (GATT) originated from the 1944 Bretton Woods Conference.
- The Havana Charter, intended to establish the International Trade Organization (ITO), never came into force.
- GATT, signed by 23 countries in 1947, was the only multilateral instrument governing trade until the establishment of the WTO in 1995.
- The Uruguay Round from 1987 to 1994 led to the Marrakesh Agreement, establishing the WTO.
Governance
- Ministerial Conference: The WTO’s top decision-making body, convening every two years.
- General Council: Represents all member governments and acts on behalf of the Ministerial Conference.
- Dispute Settlement Body (DSU): Deals with disputes between WTO members according to the Understanding on Rules and Procedures Governing the Settlement of Disputes.
- Appellate Body: Established in 1995, it is a standing body of seven members hearing appeals from reports issued by panels in WTO member disputes.