E-com needs new balanced interests

E-com needs new balanced interests

By Djauhari Oratmangung and Wiwit Wisatyo

JAKARTA (JP): At the threshold of the 21st century, developed
and developing nations alike are challenging themselves to action
structural reform or modernization in society based on the key
paradigms globalization, liberalization and informatization.

Along this line, transactions conducted through the Internet
and the World Wide Web as main components of the business and
social infrastructures will be magnified and highly evolved in
the next millennium.

It is widely recognized that the application of Electronic
Commerce (E-com) mainly driven by technological revolution is a
prime mover for growth in the world economy, which will further
invigorate trade efficiency and competitiveness and its
beneficial effects upon the improvement of global trading
practices.

This phenomenon is one of the pervasive pulses of
globalization and liberalization in the economic sense that
relatively no country in this world can avoid its impact.
Although they have provided considerable advantage results for
some countries that have managed to avail themselves of its
expanded opportunities, many developing nations are still facing
complex challenges, risks and uncertainties even still have very
little say in the policy formulation of these ongoing processes.
It is therefore that all nations should form and implement the
cooperative relationship, among other things, based on the spirit
of genuine interdependence; just, effective and transparent
global trading management with a vision to equitable sharing of
responsibilities, mutual respect and advantages.

Judging from this state of affairs, the basic question is to
examine briefly that the E-com policy be formulated based on
global vision and that a new sense of E-com as the new agenda for
trade policy is urgently needed. This joint effort, based on
balanced interests, should be designed and formulated to
accommodate the balanced interests of all nations. There is a
need for multilateral and regional action to create enabling
environment in which E-com can flourish.

Electronic commerce (E-com) shall easily be defined as the
process of using electronic methods and procedures to conduct all
forms of business activities to gain organizational objectives.
E-com operates different technologies and embraces a wide range
of financial forms such as electronic banking, electronic
trading, electronic data interchange (EDI), electronic mail (e-
mail), facsimile, electronic cataloging, video conferencing and
all forms of messaging between enterprises.

With the advent of E-com, transactions in the form of digital
information will flow freely over global networks across national
boundaries. There is a growing idea of the establishment of an
international order based on integrated rules covering the
placement and acceptance of orders, conclusion of contracts and
settlement of accounts and so on.

Furthermore, the rapid development of information technology
and communication have constituted E-com as one of the burning
issue of numerous international meetings, such as the G-7
Ministerial Conference on Information Society held in Brussels in
February 1995 and the Ministerial Conference on Global
Information Networks held in Bonn on July 1997. Still, in 1997
the OECD organized an international conference on Dismantling
Barriers to Global Electronic Commerce in Turku, Finland, and
will be followed by meeting on the Borderless World: Realizing
the Potential of Global E-com, to be held in Ottawa in October of
this year.

It is interesting to observe that the major trading nations,
led by the United States, have energetically contemplated the
idea of having multilateral or regional understanding,
particularly in the fora of APEC and World Trade Organization
(WTO) on the significant role of the application of E-com in the
field of international transactions. Even in the preparation of
the Second Ministerial Conference of the WTO to be held in Geneva
on May 18-May 20, "the majors" have initially indicated some
crucial and sensitive elements of the aforementioned idea of E-
com by pursuing the successful encouragement of global E-com and
its plan of action, as well as striving for agreement within the
WTO to establish a tariff-free environment of global E-com and
its applications.

Having said that, there is an active divergent view in the
developed nations on how to make the future promised by E-com a
reality. For illustration, in July 1997 the U.S. released the
Framework for Global Electronic Commerce (E-com) which sets out
its vision of the emerging electronic marketplace; outlines the
principles that will guide its approach to E-com; and indicate an
agenda for international discussion and agreements to facilitate
the growth of E-com and also it hopes to be able to work with
international trading partners to develop a free and open global
electronic marketplace.

So far, the five principles of the Framework are as follows:
a) the private sector should lead development; b) government
should avoid undue restrictions on E-com; c) where government
involvement is needed, it should aim to support and enforce a
predictable minimalist, consistent and simple legal environment
for commerce; d) existing laws and regulations that may hinder E
-com should be reviewed and revised to reflect the needs of the
new electronic age; e) the legal framework supporting commercial
transactions should be facilitated on global basis consistent and
predictable, regardless of the jurisdiction in which a particular
buyer and seller reside. To follow up this Framework, the U.S.
administration adopted Internet Tax Act, which regulated on the
restriction of federal and state government to impose new tax
scheme on internet commerce until the year of 2004.

On Dec. 5, 1997, released a joint European-U.S. Statement on
Electronic Commerce which seeks a global understanding of certain
main principles that when goods are ordered electronically and
delivered physically, there will be no additional import duties
applied in relations to the use of electronic means; in all other
cases relating to E-com, the absence of duties on imports should
remain. It means that taxes on E-com should be clear, consistent,
neutral and non-discriminatory. Furthermore, to explore the
possibility the creation of a global market based system of
registration, allocation and governance of internet domain names
which fully reflect the geographically and functionally diverse
nature of the internet.

The discussion of legal and social issues for E-com policy
may, among other things, comprise the applications statutory
provisions which ruling paper or paper-based concepts, such as a
signed original document, recognizing the legality of transaction
formed using electronic technology; assessing the admissibility
and evidential value of electronic communications,
authenticating, verifying the integrity and providing for the
non-repudiation of electronic communications. At the global
level, pursuant to the Resolution No: 51/162 the United Nations
Commission on International Trade Law (UNCITRAL) adopted the
Model Law on Electronic Commerce which comprised of the unbinding
guidance for the nations to facilitate the use and application of
information technology, particularly E-com including the legal
status of computer print-out as legal evidence, the format of
contract/agreement as well as dispute settlement mechanism.

As we are still have around 20 months before the world enters
the gate of the New World of the 21st century. The change in the
global political and economic landscape have brought a new
paradigm for an opened-up vista and perspective for mutually
beneficial cooperation among nations, especially in the field of
E-com and its applications. Therefore, we must be shapers or
players of event, not observers. We must awaken to the decisive
moment to make a nation and a world better than any we have ever
known. If we do not act, the moment will easily pass -- and we
will significantly lose the best possibilities of forging our
better future.

It is obvious that anticipative steps to be taken by Indonesia
are, among others, to socialize the optimum benefits derived of
the application of the electronic commerce which lead to improve
the overall competitiveness of public and private sectors as well
as enhancement of national efficiency of international
transactions. It is an urgent need that the country should
harness its multidisciplinary expertise to focus on trade and
investment promotion concerned with the identification of trade
opportunities, the marketing of strategic partners, trade flow of
specific products and market conditions including nontariff
measures.

Having said that, in light of the forewarning measures of the
inclusion of this issue as non economic conditionality to the
international trade regulations, developing countries should
collectively perform their common diplomatic efforts to
equilibrium the interest of developed and developing nations by
forming a synergistic formation lead by competent chief
negotiator supported by qualified multidisciplinary experts to
pursue the balanced multilateral framework based on equity and
win-win solutions.

Djauhari Oratmangun is an international trade analyst, and
Wiwit Wirsatyo is an international business observer.