Development and building trade capacity
Trade in services
Technical assistance and capacity building in services trade have been consistently high over the last decade. Since 2015 more than 30 national and regional activities have been carried out at the request of African members and governments in the process of acceding to the WTO.
Technical assistance activities of the WTO
The WTO supports African countries’ capacity-building needs through its technical assistance (TA) programme. In 2019 the WTO continued to enhance human and institutional capacity development on multilateral trade issues in Africa through the biennial Training and Technical Assistance Plan (TA Plan). The TA Plan is the framework that identifies priorities and mechanisms for implementation of TA activities sources of funding and anticipated results. African countries are accorded priority in the implementation of many of the traderelated technical assistance activities.
Conclusion
As detailed in this report open global trade has had positive effects for African industrialization and development. Efforts must continue to help developing countries and Africa build capacity and to take fuller advantage of the benefits that trade brings. Recently faced with the impacts of the COVID-19 pandemic some of these efforts have been challenged and the developmental gains of recent years put in question.
Strengthening Africa’s Capacity to Trade
Open global trade has had positive effects for African industrialization and development. Keeping markets open and predictable as well as fostering a more generally favourable business environment will be critical to spur renewed investment in Africa and support the continent’s economic recovery from the COVID-19 pandemic. This report looks at efforts to help African countries build capacity and to take fuller advantage of the benefits that trade brings. It examines various activities and projects the WTO is implementing in the continent including in the areas of trade facilitation compliance with sanitary and phytosanitary regulations and capacity building for trade and production. The report also looks into projects aimed at mainstreaming trade into the national development strategies of African countries. International cooperation a multilaterally coordinated response to the COVID-19 crisis and a reinvigorated multilateral trading system have the potential to lessen the effects of the pandemic and bolster Africa’s economic growth.
Standards and Trade Development Facility
The Standards and Trade Development Facility (STDF) is a global partnership that facilitates safe inclusive trade and development outcomes in support of the UN’s 2030 agenda. Established by the Food and Agriculture Organization of the United Nations (FAO) the World Organisation for Animal Health (OIE) the World Bank Group (WBG) the World Health Organization (WHO) and the WTO the STDF promotes improved food safety and animal and plant health capacity in developing countries to help imports and exports to meet SPS requirements for trade based on international standards. By convening and connecting diverse stakeholders from across its projects and other work and by piloting and learning from innovative collaborative and cross-cutting approaches the STDF influences and acts as a catalyst for SPS capacity development work globally including in Africa (STDF 2019).
Mainstreaming trade for industrial development in Africa
The Enhanced Integrated Framework (EIF) works with African LDCs to mainstream trade priorities for national development and build trade-related institutional and productive capacity. In line with UN Sustainable Development Goal (SDG) 9 “Build resilient infrastructure promote inclusive and sustainable industrialization and foster innovation” the EIF not only supports targeted agro-processing projects but also the active integration of trade dimensions in existing national policy strategies. Sectors that have mainstreamed trade into their strategies include infrastructure industry agriculture tourism energy environment information and communications technology and transport. Policy development and implementation are fostered through strong coordination and engagement mechanisms.
Technology transfer for cotton by-products development in eight African LDCs
Cotton is a vital cash crop for many African LDCs as it provides income for an estimated 4 million farmers and their families where 17 per cent of those farmers are women. Sub-Saharan African countries export more than 90 per cent of the raw cotton lint they produce; these countries earned approximately US$ 15.5 billion in 2018 for over 1.5 million metric tonnes of lint.
Blockchaining international trade: a way forward for women’s economic empowerment?
Blockchain technology holds considerable promise to boost women’s participation in international trade. Blockchain’s anonymity and efficiency could enable many women who otherwise would be constrained by law custom or high costs to engage in financial and business transactions. Blockchain can be used to enable women who lack identification documents to undertake transactions that otherwise would require official identification and to prove their ownership of assets without interventions from male family members. Blockchain can help micro small and medium-sized enterprises (MSMEs) more than 30 per cent of which are owned by women to overcome costs associated with exporting and importing and interact easily with consumers other businesses engaged in the supply chain customs officers and regulatory bodies. Blockchain also can increase women farmers’ access to information on crops and market conditions thus improving their bargaining position. However if not regulated properly the expanded use of blockchain also could increase the relative return to sophisticated technology skills that men are more likely to have and increase the digital divide between men and women. The World Trade Organization (WTO) could play a key role in developing guidelines for the use of blockchain in international trade to support the efficient and inclusive adoption of blockchain technology.
Opportunities and challenges of e-commerce in Mauritius
This study explores the status challenges and opportunities of e-commerce in Mauritius. The share of the population making online purchases was 14 per cent in 2017 the secondhighest level (after Libya) in Africa largely due to increases in internet use and penetration coupled with increased credit card usage and the development of secure online payment systems. And Mauritius topped the United Nations Conference on Trade and Development (UNCTAD) B2C E-commerce Index (e-readiness) for Africa. A survey of customers revealed high levels of satisfaction with online shopping due to wider choices the ability to save time accessibility and the relative ease of searching for products online. Major concerns included uneasiness over disclosure of personal information and limited ability to contact vendors. Respondents who have not shopped online cited concerns over navigating online payment security and high costs. Online sellers expressed considerable optimism over future market growth but also were concerned over a local bias towards international websites technical limitations of internet service and the small market size. Interviews with policymakers cited the strong legal and regulatory framework supporting electronic payments but described a need for stronger regulatory cooperation with other countries on e-commerce and more work to collect statistics. Technical assistance would be useful in these efforts.
The new rules on digital trade in Latin America: regional trade agreements
While recent technological advances have supported an increase in digital trade this growth has occurred with a lack of clear and defined rules. This deficiency has become an issue for Latin American countries. With the multilateral trade regime impasse more complex regional and bilateral agreements have emerged. The formulation of digital trade regulation raises many questions. In this chapter we deal with the new rules on digital trade in regional trade agreements (RTAs) recently negotiated by Latin American economies. In this work special emphasis is given to comparing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the United States-Mexico-Canada Agreement (USMCA) the most advanced RTAs regarding these issues.
Are digital advances and inclusive growth compatible goals? Implications for trade policy in developing countries
Recent years have seen policymakers give increasing attention to two significant widespread phenomena: rising inequality (the result of uneven access to productive employment) and the quickening pace of the Fourth Industrial Revolution (4IR) or “digital era”. This chapter explores the concept of inequality and why it is important to promote more inclusive growth especially in developing countries. It also offers insights into how digital advances can serve to accelerate inclusive growth provided countries have well-informed policies regulations and institutions to drive the necessary changes. It is evident from a crosssection of the literature and the initial results from a study on the effects of digital advances on inclusive growth in Africa that digitalization and inclusive growth are ideologically compatible. The areas requiring special attention by policymakers in developing countries include: (i) the problem of data inadequacy; (ii) uneven and costly digital connectivity; and (iii) education systems that are not preparing entrepreneurs for in-demand jobs or for the workplace of the future. Two of the prerequisites for leveraging digital technologies in order to drive more inclusive growth are an effective regulatory framework and a commercial environment that is both trade- and investment-friendly.
Taxation of international e-trade: Russian particularities
Tax rates on e-commerce in Russia should remain moderate given the small size of its digital trade operations (so the rise in tax revenues from higher rates would be small) and substantial growth prospects (so future tax revenues from a developed sector could be quite large). The Russian Federation’s (Russia’s) taxation of e-commerce activities presents two important challenges. First consumer goods purchased directly from foreign online sellers enjoy significant tax advantages compared to imports purchased in Russian retail outlets undermining the profitability of Russian importers and reducing tax revenues. Second the value-added tax (VAT) levied on foreign exporters of electronic services creates uncertainty because the legal definition of electronic services is unclear and impedes the operations of multinational companies in Russia because VAT is taxed on intra-firm imports of services. Russian authorities are establishing effective automated systems for collecting taxes and customs duties on cross-border e-commerce calculating VAT compensation to exporters and accounting for receipts from online stores. These systems will help to prevent abuse of the tax system as well as reduce the cost of compliance by firms.
Convergence on e-commerce: the case of Argentina, Brazil and MERCOSUR
E-commerce is growing rapidly in Argentina and Brazil and in both countries the share of the population participating in e-commerce transactions exceeds the Latin American average. Both countries have established a legal framework for data protection regulation of the internet consumer protection taxation of e-commerce and contracts and e-signatures. Argentina and Brazil also have submitted proposals for negotiations over the treatment of e-commerce transactions in WTO Agreements and included e-commerce provisions in free trade agreements (FTAs). However different approaches to internal regulation of e-commerce and differences in positions in international negotiations indicate diverging regulatory approaches that will increase legal uncertainty and thus constrain investments and market expansion in the sector. An exception is the regulation of data protection where both countries are following principles laid out in the European Union’s General Data Protection Regulation (GDPR). Further negotiations between the two countries over regulatory convergence for e-commerce could best be undertaken through the Southern Common Market (MERCOSUR).
Engaging in the digital economy: issues and agenda in the quest to adopt Indonesia’s e-commerce roadmap
The study explores structural and practical issues following the adoption of Indonesia’s e-commerce roadmap (2017–2019) and its implications for the future of the country’s digital economy. Two major categories of issues are examined in order to identify problems and challenges confronted by related stakeholders. The first category i.e. the structural one relates to the larger governance context of the country’s digital economy to which e-commerce activities are attached. The governance context includes the legal and regulatory context the institutionalizing mechanism and the implementing phases which involve socio- and politico-economic interplays among its key players. The second category represents practical dimensions which involve questions on the mitigation of and adaptation to concepts models and practices in the digital economy. Indonesia’s position on the moratorium on e-commerce and the local initiatives on digital economy are presented to illustrate mitigation efforts by related stakeholders in areas where disagreements and negotiations on certain structural and practical policy issues have arisen i.e. on Indonesia’s position on the World Trade Organization (WTO) moratorium on e-commerce and local initiatives (such as the ones in Yogyakarta) to develop a digital economy.
Note on the WTO Chairs Programme
The WTO Chairs Programme (WCP) was launched in 2010 as a capacity-building project. It aims to enhance knowledge and understanding of the trading system among academics and policymakers in developing countries through curriculum development research and outreach activities by universities and research institutions. Information on the WCP is available at www.wto.org/wcp.
Foreword
We are pleased to deliver preliminary remarks to this compilation of research work on digital trade prepared by the WTO Chairholders Advisory Board members and the WTO Chairs Programme (WCP) team of the WTO Secretariat.
China’s e-commerce development and policy relevance
The dollar value of e-commerce transactions in China has increased enormously over the past 20 years supported by improved infrastructure the rapid growth of mobile telephony and increased financing. The market also is characterized by increasing diversity for example the growth of e-medical services the expansion of cross-border e-commerce and the development of online-offline transactions. China’s national government has played an important role in the development of e-commerce through policies elaborated in five-year plans while regional governments also have participated in planning and adjusting the e-commerce policy framework in light of local conditions.