E-commerce at global negotiation<\/p>\n
By Wiwit Wirsatyo<\/p>\n
JAKARTA (JP): Major trading nations, led by the United States,
\nhave systematically exercised a sort of neomercantilist strategy
\nby introducing electronic-commerce (E-commerce) into global
\ntrading arrangements to enhance their own wealth, power and
\nmarket access at the expense of others.<\/p>\n
For example, they offered to devise a regulatory framework for
\nE-commerce during the second ministerial conference of the World
\nTrade Organization (WTO) in Geneva in May 1998.<\/p>\n
Delegates at the conference issued a declaration on the
\nestablishment of a working plan for E-commerce and emphasized the
\nneed for further discussions of the issue in other international
\nforums, including the Organization for Economic Cooperation and
\nDevelopment (OECD), the Asia-Pacific Economic Cooperation forum
\nand the Free Trade Area of the Americas (FTAA) forum.<\/p>\n
In general, E-commerce is defined as transactions or business
\nactivities, particularly the sale and supply of goods and
\nservices, using electronic and digital information mediums, such
\nas the Internet and the World Wide Web. E-commerce operates
\nacross different technologies and embraces a wide range of forms,
\nincluding electronic banking, trading, data interchange, mail (E-
\nmail), cataloging, facsimile, video conferencing and all forms of
\nmessages between enterprises.<\/p>\n
Worldwide E-commerce transactions are projected to reach some
\nUS$300 billion by the millennium; all to the advantage of major
\ntrading nations. As a point of illustration, about 70 percent of
\nInternet websites are located in the United States; another 8
\npercent are located in Canada, 14 percent in Europe, 4 percent in
\nthe Asia-Pacific region and 2.3 percent in Latin America and
\nAfrica.<\/p>\n
To date, the nuances of E-commerce often are perceived as a
\nkey to bridging the gap between developing and developed
\ncountries. Other issues discussed at the WTO often have pitted
\ndeveloping countries against developed countries in protracted
\nand often stormy negotiations.<\/p>\n
Developing countries are worried because they are not as
\ntechnologically advanced as developed nations, so their
\nbargaining power will be diminished. They also are worried E-
\ncommerce will make them consumers rather than producers by
\nencouraging them to import more than they export. In the long
\nrun, this would create considerable pressure on their balance of
\npayments.<\/p>\n
Some developing nations also fear E-commerce will lead to the
\nerosion of their local and national languages and cultures. They
\nmay be tempted to impose local content requirements on Internet
\nservices. This is an almost impossible measure to implement, but
\nhas political appeal in countries wishing to protect their local
\nlanguages and cultures. Strong nationalistic feelings
\nconsequently may have the effect of prolonging negotiations.<\/p>\n
Several international organizations, including the OECD and
\nthe FTAA, have said developing countries need to promote the use
\nof E-commerce. They plan to assist these countries by providing
\ntraining and educational programs.<\/p>\n
From a negotiating perspective, the WTO's work on E-commerce
\nheralds a multifaceted approach to global trade negotiations.
\nEven though it is difficult and premature to forecast the outcome
\nof the WTO negotiations, some common themes are clear with regard
\nto the establishment of universally acceptable standards and
\ncommercial codes for E-commerce. This approach seems to be
\nfavored by governments and the private sector, and the WTO is
\nlikely to give considerable weight to a proposal which provides
\nthe flexibility to adapt to rapid changes in the development of
\nE-commerce.<\/p>\n
Negotiations are expected to involve not only the application
\nof the General Agreement on Tariffs and Trade and the General
\nAgreement on Trade in Services on the supply of goods and
\nservices by electronic means, but also the application of other
\nmultilateral agreements, especially those relating to
\nintellectual property, telecommunications and government
\nprocurement.<\/p>\n
This may lead to the WTO becoming the preeminent body in the
\ninternational regulatory regime of E-commerce.<\/p>\n
In this context, several crucial topics need to be discussed
\nat various forums, particularly at the WTO's forthcoming third
\nministerial conference in Seattle in November 1999. The topics
\nwhich need to be addressed include the following:<\/p>\n
* Market access: Merchandise purchased electronically but
\ndelivered physically may be subject to existing WTO rules on
\ntrade in goods. Nevertheless, this may not be the case for
\nproducts which are delivered as digitalized information, such as
\nsoftware programs downloaded over the Internet.<\/p>\n
* Customs rules: One significant conclusion from the WTO's second
\nministerial conference was the agreement by WTO members not to
\nimpose customs duties on electronic transmissions. Major trading
\nnations had sought a permanent ban on E-commerce duties.<\/p>\n
* Taxation: Tax regulations should provide transparency,
\npredictability and certainty. Yet certain issues remain unsolved,
\nincluding whether the taxation of goods and services provided
\nelectronically should be treated the same as for products
\npurchased off-line. There also is a need to establish tax
\navoidance and evasion policies because of the anonymity of the
\nInternet. However, these policies must take into consideration
\ntraditional territorial concepts of taxation, including residence
\nand sources of income.<\/p>\n
* Electronic payment: A key issue is whether government
\nregulation is needed to ensure the viability of electronic
\nsystems of payment in order to protect consumers and facilitate
\nlaw enforcement. Or, conversely, should the private sector take
\nthe lead and be allowed to self-regulate. For example, the
\nElectronic Commerce Promotion Council of Japan has been active in
\nanalyzing the potential threats to and security requirements of
\nsmart-card money systems.<\/p>\n
* Intellectual property: One of the primary concerns in the
\nintellectual property area is associated with the downloading of
\ninformation from the Internet. The lack of enforcement of
\nintellectual property rights around the world has been a
\nparticular concern of the United States, which has exercised the
\nextraterritorial clause of Section 301 of the Trade Act of 1974,
\nWTO consultations and dispute resolution procedures to ensure
\ncompliance with the WTO's Agreement on Trade-Related Aspects of
\nIntellectual Property Rights.<\/p>\n
Enforcement issues are exacerbated by the unregulated use of
\nthe Internet. Furthermore, the two World Intellectual Property
\nOrganization treaties on the protection of copyright issues in
\nthe digital age, adopted in December 1996, are implemented only
\nby some countries. Moreover, the two treaties do not address
\nissues of online service provider liability, leaving these to be
\naddressed by domestic legislation.<\/p>\n
* Tariff treatment: On July 1, 1997, the WTO's Information
\nTechnology Agreement came into force, involving 43 countries and
\nrepresenting over 90 percent of the world trade in information
\ntechnology (IT) products. The organization agreed to reduce
\ntariffs on IT products to zero by 2000.<\/p>\n
IT products, such as semiconductors and printed circuit
\nboards, are covered by the tariff reduction, but items such as
\ncomputer-based scientific and analytical equipment and global
\npositioning systems are not covered. In addition, there is no
\nprovision for various types of inputs and manufacturing equipment
\nfor information technology products, such as those designed for
\nthe production of printed circuit boards.<\/p>\n
In this connection, developing countries should play a
\nconstructive role by adopting specific strategic approaches to
\nequipoise the uneven interests of international society.<\/p>\n
In addition, developing countries have to close ranks in two
\nimportant ways. First, they should have a solid political
\ndetermination to work together in pursuit of their interests.
\nSecond, they should identify the points of their current
\nstrengths and utilize them to get concessions in negotiations.<\/p>\n
For developing countries to participate effectively in
\nnegotiations it is not enough that they fulfill the requirements
\nfor legislation. They should be able to formulate integrated
\npositions and carry out sustained educational programs to ensure
\ntheir officials and businesspeople are equipped with sufficient
\nknowledge and skills to apply the new rules, to tap new trading
\nopportunities and to defend national trading interests.<\/p>\n
In the same vein, because we believe E-commerce can serve as a
\ntrade facilitator leading to economic growth, major trading
\nnations should earnestly extend their facilities and technical
\nassistance to developing nations to promote an understanding
\namong business networks and to enhance the capacity and
\ndevelopment of human resources.<\/p>\n
In light of the aforementioned realities, a set of
\nanticipative steps need to be taken by Indonesia to further
\nsocialize the optimum benefits and mitigate the disadvantages of
\nE-commerce. Eventually, the national competitiveness of both
\npublic and private sectors will be further modernized. These
\nendeavors require a synergistic approach led by a competent chief
\nnegotiator and supported by a qualified multidisciplinary team.
\nTheir task should be to pursue a balanced multilateral framework
\nand improve the environment for E-commerce development based on
\nthe principles of mutually beneficial, genuine partnership and
\nequitably shared responsibility.<\/p>\n
The writer is an international economics law observer. He
\nholds a master of law degree from the University of London.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/e-commerce-at-global-negotiation-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}