Q3/2019 - World Trade Organisation (WTO)
On 26 to 28 September 2019, the next negotiation round of the "Joint Initiative for eCommerce" was held in Geneva. The digital trade is governed by a WTO moratorium of the year 1998, which waives taxes for cross-border data trading. This moratorium will expire at the end of 2019.
- The WTO has been discussing a new agreement adjusted to today’s changed framework conditions for years. After no progress had been achieved at the WTO Ministerial Conference of December 2018 in Buenos Aires, 78 WTO members agreed on a joint initiative at the World Economic Forum Davos in January 2019 to negotiate a contract via a so-called "Fast Track".
- However, the dynamic drive expected from this did not materialise. Already at the G20 Summit in Osaka in June 2019, India declared that it was not going to participate in these negotiations. India is afraid to suffer a loss in sovereignty and decision-making power concerning its national digital economy. Indonesia and South Africa, too, do not participate in the Osaka Fast Track.
- The initiative is also criticised by non-governmental organisations. They denounce the lack of transparency in the negotiations and warn against a treaty negotiated behind closed doors that could violate the interests of consumers and developing countries and provide unilateral support to large Internet platforms.
No progress was reported for the first two negotiation rounds. The EU had submitted a nine-page position paper already in June 2019. A confidential position paper from the United States became public in August 2019. On the eve of the September round, China proposed to include a sort of neutrality clause in a future agreement. Such clause should state that IT products and digital services were not allowed to be discriminated against, regardless of their country of origin. It would prevent governments from excluding certain providers due to security concerns, e.g. for the establishment of 5G networks. Thus, the starting positions of the various parties involved are very far apart. In addition to this, some experts are suggesting to link the negotiations on an e-commerce agreement with the long-awaited reform of the WTO. This would not make things easier. Many governments are therefore sceptical that the plan to have a first agreement on digital commerce ready for signature by the next WTO Ministerial Conference in June 2020 can be implemented.