JEDDAH: Some 80 countries, including Saudi Arabia, on Friday reached a landmark agreement on rules governing global digital commerce, including the recognition of e-signatures and protection against online fraud.
“We negotiated the first global rules on digital trade,” EU trade chief Valdis Dombrovskis said after the agreement was reached in Geneva after five years of negotiations. he said.
The UK said the agreement calls for all participants to digitize customs documents and procedures and to recognize e-documents and e-signatures, and put in place legal safeguards against online fraud and misleading claims about products.
Once in place, the deal will “make trade faster, cheaper, fairer and more secure,” Britain said in a statement.
The text of the agreement states that the parties will seek to limit spam and protect personal data, as well as offer support to less developed countries.
91 of the 166 members of the World Trade Organization participated, including Saudi Arabia, China, Canada, Argentina and Nigeria.
Digital commerce is growing much faster than its traditional counterpart.
The OECD Group of Economically Developed Nations estimates that in 2020, e-commerce will account for a quarter of global trade, valued at just under $5 trillion.
Despite its growing importance, “there is no common set of global rules,” said Jonathan Reynolds, the British trade secretary.
Finalizing the talks is “a big step towards correcting this and ensuring that British businesses feel the benefit.”
About 90 negotiating countries representing 90 percent of WTO membership — including heavy hitters such as the United States, the European Union and China — were set to launch negotiations in 2019.
Australia, Japan and Singapore, which have been jointly leading the initiative for electronic commerce negotiations, presented a joint statement at a closed-door meeting at the WTO saying “After five years of negotiations, participants have reached a stable text.”
But actual implementation of the agreement may still take years.
Some negotiating countries, including the United States, Brazil, Indonesia and Turkey, have yet to sign, the announcement said.
“The text issued today … represents an important step forward for the WTO in an area of increasing importance to the world economy,” US Ambassador and Deputy US Trade Representative Maria Pagan said in a statement.
But the United States considers that “the current text is short and requires further work,” he said, pointing in particular to the “essential security exception.”
The co-convenors of the talks have stressed in recent months the importance of landing the agreement, which could facilitate electronic transactions, promote digital trade and foster an open and trusted digital economy.
“This will be the first set of basic digital trade rules,” Tan Hong Seng, Singapore's ambassador to the WTO, said in April.
“This will contribute to growing e-commerce by providing greater legal predictability and certainty against a backdrop of increasing regulatory fragmentation in our countries,” he said.
In a statement on Friday, UK Science Secretary Peter Kyle said the deal aims to “help people use technology safely from fraud, while making economic growth faster and safer through the digitization of business.”
Preferential treatment
The agreement also includes a component that gives priority to developing countries.
Besides paving the way for digitization of customs documents and procedures, the text seeks to make permanent the long-standing moratorium on exempting electronic transactions from customs duties.
The moratorium has been in place since 1998, and has been extended at every WTO ministerial meeting since then. It is currently set to expire in 2026.
“Once in force, the agreement will permanently ban customs duties on digital content,” the British statement said.
Its aim is to incorporate digital trade rules into the WTO legal framework, but that requires consensual support from all members, including those not party to the agreement.
This can be difficult when countries like India and South Africa cling to what they see as extensions of multilateral agreements within the WTO, rather than multilateral agreements supported by all members but impossible.
One solution, observers say, could be for signatories to move to another international body. But if they do, they will not be able to rely on the WTO's mechanisms to resolve trade disputes.
(with agencies)
