Notes for India as the digital trade juggernaut rolls on

Contact Counsellor

Last Updated08/02/2022

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.

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.

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.

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.

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.

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.