Micro, small and medium enterprises (MSMEs) will get the short end of the stick if developing economies continue to lag behind the multitrillion-dollar industry of e-commerce, international firms argued in a recent meeting at the World Trade Organization (WTO).
In a meeting last week, over 60 senior business representatives urged the WTO to intensify talks on how members should face the challenges of online trading. They claimed “e-commerce is changing the face of trade, affecting both big and small enterprises, and rich and poor countries.”
The platform, they reported, has a value of at least $25 trillion annually. Keeping up with this fast-growing trade activity is a challenge, and business officials said they will appreciate if the WTO address the issues entailed to e-commerce in a “frank and open manner.”
Their primary concern is how to integrate MSMEs into e-commerce, and how to bridge the digital divide between developed and developing economies. Sunil Bharti Mittal, chairman of the International Chamber of Commerce, said MSMEs will lose big time if they are not provided support to utilize the online platform.
“The digital economy is changing the composition, nature and speed of global trade, leading to policy friction—today’s trade rules reflect 20th- century patterns of trade. With the size of e-commerce, touching $25-trillion, digital infrastructure is a key determinant required by MSMEs in developing countries to be a part of the global value chain,” Mittal said.
He added the WTO is now pressed to initiate negotiations on e-commerce because, without it, MSMEs will be further marginalized in a digital environment.
The multilateral trading body is urged to iron out rules on how to manage flow of data across borders; data localization requirements; cybersecurity; customs duties on e-commerce; and consumer protection. Business officials said there is a “lack of set of stable international rules on data transfers and data flows”—a privacy and national security concern—“and a major void in the current system, which needs to be addressed.”
They are, therefore, asking the WTO to put in paper a regulatory framework for e-commerce to be followed by member-countries. This is to ensure online trading of goods is moderated and consumers are protected.
Business officials said the framework is crucial in the data localization of e-commerce, particularly on payment systems, to prevent the platform from dividing into smaller localized regimes. Apart from this, it will also address nontariff barriers on customs and bureaucratic processes, including increased documentation requirements, taxes and customs delays.
On top of the discussion on e-commerce, business officials also threshed out issues on investment facilitation, MSMEs and sustainable development. These topics were named as trade priorities at the business forum at the WTO’s 11th Ministerial Conference last December.
The meeting was participated by the ICC and the B20, the business arm of the G20, and was facilitated by the WTO.