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.