Information technology and e-commerce
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Acknowledgements
This third book prepared under the auspices of the WTO Chairs Programme (WCP) Adapting to the digital trade era: challenges and opportunities contains contributions from the WTO Chairholders of Phases I and II Advisory Board (AB) members WCP team and WTO staff members who peer reviewed individual chapters and offered their perspectives on the Chairs’ analyses and findings. It contains a total of 16 chapters and 13 commentaries providing various insights on digital trade. Several chapters were presented as working papers during the Aid for Trade side event held at the WTO from 3 to 5 July 2019 and during an academic WCP session held at the Public Forum on 9 October 2019. These events provided opportunities to AB members academics delegates policymakers and representatives from civil society to comment on the papers and discuss the policy options emanating from the analyses.
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.
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.
Data regulation in trade agreements: different models and options ahead
“Data is the new oil”. Just like oil which powered the economy in the last century data are what moves the world today. This is especially true for international trade. The crucial role played by data can be observed at every step of the process from the conception of a new product and the sourcing of raw materials and parts to the manufacturing process and the transportation of products across borders until they finally reach the hands of consumers from every corner of the world.
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.
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.
The impact of digital technologies on developing countries’ trade
Using the World Trade Organization (WTO) Global Trade Model (GTM) a recursive dynamic computable general equilibrium model we examine the potential future impact of technological innovations in the form of robotization and use of artificial intelligence (AI) servicification of the production process and falling trade costs due to the rise of online markets and platforms on the trade of developing countries. The simulations show that technological change will boost trade growth as a result of both falling trade costs and the more intensive use of information and communications technology (ICT) services. On average between now and 2030 global trade growth would be 2 percentage points per annum higher as a result of digital technologies. Further developing countries’ trade growth would be 2.5 percentage points per annum higher and the increase in their share of global trade will be more pronounced the faster they are able to catch up technologically. Another finding from the simulations is that services exports will become a bigger part of global trade making up more than a quarter of total trade by 2030 and technological changes tend to increase the share of services imports in manufacturing gross output. Finally these technological developments do not appear to portend a reshoring or localization of production suggesting that future technological change can go in hand in hand with continuing globalization.
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.
La era del comercio digital - Oportunidades y desafíos para los países en desarrollo: el caso de Kenya
El comercio electrónico ha experimentado un rápido crecimiento en Kenya apoyado por las leyes que regulan los servicios de tecnología de la información y las comunicaciones (TIC) las transacciones de comercio electrónico la protección de datos y el acceso a la información. El Gobierno ha creado ventanillas únicas para la prestación de servicios públicos a los ciudadanos y para la logística comercial. El país está bien posicionado para ampliar su comercio digital con la creación de la Zona de Libre Comercio Continental Africana AfCFTA) habida cuenta de las políticas esbozadas en el Plan para la Economía Digital del Gobierno. El crecimiento del comercio digital ofrecerá nuevas oportunidades para la prestación de servicios en línea promoverá la diversificación de las exportaciones impulsará la eficiencia y el crecimiento en el sector manufacturero mejorará la competencia en el sector financiero aumentará el acceso a información relacionada con los mercados e incrementará el acceso de las microempresas y las pequeñas y medianas empresas (mipymes) a los mercados. Sin embargo el potencial del comercio digital está limitado por la falta de acceso a servicios financieros los bajos ingresos una escasa cobertura de la banda ancha y de la fibra una mala infraestructura de transporte y déficits de competencias. El marco jurídico y reglamentario de Kenya es insuficiente para ofrecer protección contra la ciberdelincuencia garantizar la privacidad apoyar la interoperabilidad de las plataformas móviles para la transferencia de dinero y los bancos promover la confianza de los consumidores en las transacciones en línea proteger la propiedad intelectual y proteger los sitios digitales de las responsabilidades derivadas de lo que publican los consumidores.
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.
Holistic use of technologies for Smart Customs of the future
2021 has highlighted the critical role that Customs play in enabling global trade. To make the global supply chains of the future more efficient Smart Customs have to minimize Customs clearance time and costs while intelligently managing inbound and outbound goods and vehicles. Disruptive technologies such as IoT devices are enabling autonomous equipment to drive effective monitoring of cargo and tracking of journeys.
Foreword by the WTO Director General
We live in a time of rapid technological change that has the possibility of profoundly altering the conduct of international trade. For many people keeping up to date with the latest technology and fully understanding its implications can be daunting. This report will help illuminate the so-called “disruptive technologies” that are most relevant to border management as well as assist governments to better understand the challenges and benefits of their use by Customs.
Executive summary
The promise of TradeTech – the set of technologies that enables global trade to become more efficient inclusive and sustainable – is multifaceted from trade facilitation to efficiency gains and reduced costs to greater transparency and resilience of supply chains. Of particular interest for this publication is the potential of artificial intelligence (AI) blockchain and distributed ledger technology (DLT) and the internet of things (IoT) to shape the global trade ecosystem.
Global legal recognition of electronic transactions and documents
On average a cross-border transaction requires the exchange of 36 documents and 240 copies (Fletcher 2019). A shipment of roses from Kenya to Rotterdam can generate a pile of paper 25 cm high and the cost of handling it can be higher than the cost of moving the containers (Allison 2016).
Global digital identity
Identity and trust lie at the core of each trade interaction. As global value chains become increasingly digital organizations need to ensure that they can trust the digital identity of legal and physical persons1 or products they deal with and can efficiently link that digital identity with a real organization specific product or device (see Box 17).
Global trade rules access and computational law
Businesses operate in an environment of increasing legal complexity. At a global level trade compliance is particularly time consuming and costly as enterprises need to be aware of and comply with rules under different international agreements as well as meet their contractual obligations.