Notes for India as the digital trade juggernaut rolls on

Contact Counsellor

Notes for India as the digital trade juggernaut rolls on

  • Despite the cancellation of the Twelfth Ministerial Conference (MC12) of the World Trade Organization (WTO) late last year (scheduled date, November 30, 2021-December 3, 2021) due to COVID-19, digital trade negotiations continue their ambitious march forward.
  • On December 14, Australia, Japan, and Singapore, co-convenors of the plurilateral Joint Statement Initiative (JSI) on e-commerce, welcomed the ‘substantial progress’ made at the talks over the past three years and stated that they expected a convergence on more issues by the end of 2022.

The WTO Joint Statement Initiative (JSI) on e-commerce

  • As the key policy player in modern global trade, the WTO has established a system of agreements which provides the legal architecture for the liberalization of international trade.
  • At the WTO, discussions on e-commerce are taking place in two parallel tracks: the WTO Work Program on Electronic Commerce (WPEC), launched in 1998 with a non-negotiating and exploratory nature, and the Joint Statement Initiative (JSI) on E-commerce, which aims to produce a binding agreement among its members.
  • The JSI on e-commerce encompasses both traditional trade topics (e.g. trade facilitation) and several digital policy issues, such as cross-border data flows and data localisation, online consumer protection and privacy and network neutrality.

Which countries are part of the JSI on the e-commerce?

  • Currently, the total number of WTO members formally participating in the e-commerce JSI negotiations is 86.
  • They account for slightly more than half of all WTO members and 90% of global trade.
  • With regards to the participation of developing countries, some regions remain notably underrepresented.
  • None of the developing Pacific Island countries are part of the JSI on e-commerce.

What is being discussed in JSI on e-commerce?

  • Over recent years, an increasing number of digital policy issues have been included under trade negotiations on e-commerce at the WTO, and also in the context of Regional Trade Agreements (RTAs).
  • This reality is reflected in the negotiating agenda of the JSI on e-commerce, which includes not only classic traditional issues, such as trade facilitation and market access, but also a wide range of digital policy issues, such as data flows, localisation, data protection, cybersecurity and spam.
  • The themes advanced in members’ proposals have been aggregated in six sections in JSI’s negotiating document:
  • A. enabling electronic commerce;
  • B. openness and e-commerce;
  • C. trust and e-commerce;
  • D. cross-cutting issues;
  • E. telecommunications; and
  • F. market access.

Concerns of developing countries like India

  • Over half of WTO members (largely from the developing world) continue to opt out of these negotiations.
  • They fear being arm-twisted into accepting global rules that could etiolate domestic policymaking and economic growth.
  • India and South Africa have led the resistance and been the JSI’s most vocal critics.
  • India has thus far resisted pressures from the developed world to jump onto the JSI bandwagon, largely through coherent legal argumentation against the JSI and a long-term developmental vision.
  • India and South Africa have rightly pointed out that the JSI contravenes the WTO’s consensus-based framework, where every member has a voice and vote regardless of economic standing.
  • Unlike the General Council Work Programme, which India and South Africa have attempted to revitalise in the past year, the JSI does not include all WTO members.

Way forward

  • Despite its failings, the WTO plays a critical role in global governance and is vital to India’s strategic interests. Negotiating without surrendering domestic policy-making holds the key to India’s digital future.
  • For the process to be legally valid, the initiative must either build consensus or negotiate a plurilateral agreement outside the aegis of the WTO.
  • Taking a cue from the Digital Economy Partnership Agreement (DEPA) between Singapore, Chile, and New Zealand, India can push for a framework where countries can pick and choose modules with which they wish to comply.