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Audience

During the presentation, various topics were discussed, including digital trade, data collection, and statistics. One audience member questioned the value of gathering information on digitally ordered goods and services. Despite this doubt, it was highlighted that there is a growing interest in having better data on actual services trade, digital trade, and the flow of money involved in paying for a service or a good.

The joint efforts of prominent international organisations were also recognised as contributing to the establishment of the report. A team of four people who handled the complex tasks in a collegial manner worked on the report, which received positive sentiment.

The importance of capacity building to support National Statistical Agencies in monitoring progress towards the Sustainable Development Goals (SDGs) was emphasised. It was noted that a major push is being made to improve the abilities of national statistical agencies to monitor progress towards the SDGs. This alignment with collecting data about the digital economy is crucial.

Investigating two World Customs Organization categories, namely low-value dutiable and low-value non-dutiable, could provide valuable insights into business-to-consumer (B2C) trade. These categories are significant as most B2C operations fall within them.

Concerns were raised regarding the accuracy of transactional data for digitally ordered goods. The tension between CIF (Cost, Insurance, and Freight) and FOB (Free on Board) values makes it difficult to capture the exact trade values. It was observed that the backend transactions are not fully capturing the CIF values.

Queries were raised about the inclusion of digital payments in reported statistics, specifically whether digital payments are counted as ‘trade in service’ or fall into a different category. However, no specific evidence or argument was provided in relation to this query.

Additionally, some attendees sought clarification on the use of definitions for the publication. Mario Postolov, the Regional Advisor in the Trade Division of UNECE, is responsible for publishing and continuously updating a glossary on trade facilitation terms. This glossary is part of the effort to provide clarity in the publication.

Furthermore, the inclusion of postal data in future reports was discussed. Hossam Garbi, responsible for the Trade Program in the Universal Postal Union (UPU), highlighted that the majority of international shipments transit through the postal network. The UPU expressed a positive interest in cooperating for the inclusion of postal data in future reports, demonstrating their global vision on all e-commerce transactions and their efficiency.

In conclusion, the presentation covered various topics related to digital trade, data collection, and statistics. While some doubts and concerns were raised, there was also recognition of the joint efforts of international organisations and the importance of capacity building for National Statistical Agencies. The inclusion of postal data in future reports and the need for better data on digitally ordered goods and services were discussed.

Dan

The analysis explores the significance of digitally ordered trade and the methods used to measure it. Digitally ordered trade refers to the international sale or purchase of goods or services carried out over computer networks. It closely aligns with the definition of e-commerce established by the OECD in the early 2000s. One notable point emphasized in the analysis is that digitally ordered trade encompasses both goods and services and is applicable to all sectors of the economy.

To measure digitally ordered trade, the analysis recommends using business ICT surveys and merchandise trade customs reporting procedures. Business ICT surveys are valuable tools for assessing the uptake of e-commerce in businesses and can provide insights into the value of digitally ordered transactions. Notably, some countries, including China, have modified their merchandise trade customs reporting procedures to identify shipments that are digitally ordered.

In addition to these methods, the analysis highlights the importance of other sources for gaining a comprehensive understanding of digitally ordered trade. This includes household surveys, which can examine areas such as ICT usage and expenditure, providing valuable data on consumer behavior. VAT returns data and card payments data are also mentioned as additional sources that can provide insights into digitally ordered trade. Moreover, multinational enterprise surveys are highlighted as particularly useful for understanding digital trade due to the significant role of multinational enterprises in the trading system.

The analysis discusses the role of digital intermediation platforms (DIPs) in the digital trade ecosystem. DIPs are online interfaces that facilitate direct interaction between buyers and sellers, without the platform taking economic ownership of the goods or services being sold. They offer advantages such as access to a wider global market, particularly beneficial for smaller businesses. The analysis points out that transactions on DIPs have significantly increased during the pandemic. DIPs are seen as key drivers in the digital transformation of trade due to their ability to enable new business models, such as resource sharing, and to facilitate sales through online platforms.

An important insight provided in the analysis is the distinction between real-life transactions and economic transactions involving DIPs. In real life, a buyer pays the DIP, which deducts its fees and pays the remainder to the seller. However, for accurate trade statistics, it is recommended to separate these two transactions: the payment for the actual good or service and the payment for the intermediation service. To achieve this, enterprise surveys, ICT usage surveys, and potentially card payment data can be utilized to collect the necessary information.

The analysis also highlights the potential of DIPs in the digital trade landscape and their role in increasing the share of least developed countries (LDCs) in global trade. It notes that digital ordering and delivery can enable practitioners in remote areas to supply services to businesses and homes worldwide, thus benefiting LDCs. However, the analysis also mentions that the target of doubling the share of LDCs in global trade by 2020, as part of the Sustainable Development Goals (SDGs), was not met. Implementing the handbook’s framework is seen as crucial for achieving a clearer digital trade landscape.

Measurement of digital trade in LDCs is deemed essential to monitor its contribution to achieving the revised SDGs target. The analysis suggests including customs data and estimations for non-dutyable trade to obtain a comprehensive picture when measuring digital trade. It also proposes using postal data to estimate the volume of low-value, digitally ordered goods trade, as there is a correlation between the volume of postal packages crossing borders and digital trade.

In conclusion, the analysis underscores the significance of digitally ordered trade and the need for accurate measurement methods. It suggests that a more comprehensive understanding can be achieved through surveys, customs reporting procedures, and the utilization of various data sources. Additionally, the analysis highlights the role of DIPs in the digital transformation of trade, particularly in facilitating access to a wider market. Furthermore, it emphasizes the importance of separating real-life and economic transactions involving DIPs for more accurate trade statistics. Finally, it addresses the potential of digital trade for LDCs and the importance of measuring its impact to achieve the SDGs target.

Overall, the analysis provides valuable insights into the definition, measurement, and impact of digitally ordered trade, as well as the role of digital intermediation platforms and the need for comprehensive measurement methods in the digital trade landscape. It underscores the potential of digital trade in driving economic growth and its implications for achieving sustainable development goals.

Antonella

Efforts to measure digital trade have been ongoing since the late 1990s. The World Trade Organization (WTO) launched a work programme on e-commerce in 1998 to address the growing prominence of digital trade. Additionally, the Organisation for Economic Co-operation and Development (OECD) developed a definition for e-commerce in the early 2000s. These initiatives reflect the recognition of the need to understand and quantify the impact of digital trade on the global economy.

However, despite these efforts, there is still a lack of official statistics on digital trade. Unlike merchandise trade and services trade, there are no comprehensive and standardised measurements for digital trade. This poses a challenge for policymakers as they require accurate and reliable data to formulate effective policies in all economies and at all levels of development.

One of the key arguments is the need for a clear distinction between the concepts of e-commerce and digital trade. E-commerce refers to the ordering of goods and services, both domestically and internationally. On the other hand, digital trade includes not only the ordering but also the delivery of goods and services, specifically at an international level. It is important to understand this distinction to accurately measure and monitor digital trade.

Monitoring and measurement of digital trade is crucial as it allows for the identification of barriers and problems that may hinder its growth and development. By monitoring its evolution, policymakers can take appropriate actions to address any issues that arise. Additionally, measuring digital trade can help countries access new markets, increase opportunities for businesses, and contribute to overall economic growth.

The broad conceptual framework for digital trade is fairly stable and established. However, there is still ongoing work in interpreting and measuring certain aspects, especially in relation to platforms and other emerging areas. The framework is designed to be future-proof, capable of accommodating changes in the production boundaries and incorporating new macroeconomic standards that will be introduced in the coming years.

Valuation of digitally ordered goods can be challenging due to the use of different pricing methods. Conventional accounting rules are often applied, such as SIF (supplied, installed, and fully paid for) or FOB (free on board) pricing. Translating invoice values into these valuation methods can be complex and require careful consideration.

It is important to note that while financial flows associated with trade, such as payments, are typically present, they are not counted as part of digital trade. The focus is primarily on the ordering and delivery of goods and services themselves. This distinction clarifies the scope of digital trade and provides a more accurate picture of its impact on the economy.

In conclusion, while efforts to measure digital trade have been ongoing, there is still a need for official statistics similar to those available for merchandise trade and services trade. The defined framework for digital trade is firmly in place, but further work is required to collect official statistics, monitor its evolution, and address challenges related to valuation. It is crucial to continue measuring and monitoring digital trade to foster its growth and reap the benefits it offers in terms of access to new markets and economic development.

Barbara

The analysis highlights several key points regarding digitally delivered trade and the challenges of measuring it. Digitally delivered trade is defined as all international trade transactions that are delivered remotely over computer networks. It primarily involves the delivery of services, but there are certain services, such as accommodation and passenger transport services, which require physical presence and cannot be digitally delivered.

One important finding is that digitally deliverable services, which include services delivered remotely through various means such as phone, fax, video calls, emails, apps, and digital intermediation platforms, have a higher value than the services that are actually digitally delivered. In fact, it has been estimated that digital deliverable services were valued at $3.82 trillion in 2022, and they have been growing more rapidly than goods exports and other services that are not digitally delivered. This highlights the significant economic impact and potential of digitally deliverable services.

Efforts are being made to capture and measure the remote delivery of services through surveys and administrative sources. For example, the development of International Trading Services Surveys, as successfully implemented by the USA and Costa Rica, aims to capture exports of digitally delivered services. Additionally, the use of administrative sources, such as VAT data and public expenditure sources, has been advocated to estimate digital service inputs. Argentina has leveraged VAT tax legislation on non-resident providers of digital services, while Ireland has combined multiple publicly available sources to estimate household expenditure on digital services.

However, the measurement of digital trade presents complex challenges, especially for developing economies. Measuring digital trade requires multiple sources and methods, and implementing the recommendations outlined in the handbook can be challenging. To address this, a coordinated statistical building program has been introduced by four institutions to aid developing countries in improving their statistical capacity.

The analysis also emphasizes the importance of tracking digital trade and ordering, as well as the necessity of comprehensive reporting of statistics in this area. Policymakers play a crucial role in the production of statistics for trade, as they can allocate funds for statistical development and ensure that stakeholder consultations are conducted prior to implementing statistical strategies.

Furthermore, the integration of least developed countries into the global trading system is prioritized, and efforts are being made to develop data that allows monitoring opportunities for growth in these countries. A coordinated statistical program has been launched to build up the statistical capacity of least developed countries.

It is noteworthy that digital trade is not solely a business of developed economies, as some developing economies are already fully engaged in digital trade. Particularly, tourism-driven small economies have a significant number of orders made digitally. However, capacity building is required in small economies to accurately measure the scale and value of digital trade, as sometimes they may not be fully aware of the extent of their digital trading activities.

In conclusion, the analysis brings attention to the concept of digitally delivered trade and highlights both the potential and challenges associated with measuring it. The growth and economic impact of digitally deliverable services are significant, and efforts are being made to capture and measure the remote delivery of services. The measurement of digital trade presents complex challenges, particularly for developing economies, but a coordinated statistical-building program aims to address these challenges. The role of policymakers and the development of national strategies are crucial in producing trade statistics and informing policy decisions. It is important to prioritize the integration of least developed countries into the global trading system and provide capacity-building support in small economies to accurately measure and benefit from digital trade.

Moderator

The discussion highlighted several key points regarding digital trade and its measurement. Firstly, it was noted that there is a lack of official statistics on digital trade, which poses challenges for policymakers in making informed decisions. Without reliable and comprehensive statistics, policymakers have to rely on anecdotal information, hindering effective policymaking for all economies and at all levels of development.

The emergence of new business models, such as online platforms, was also discussed. These platforms are becoming important players in economies, but their role, functioning, and contributions are subjects of intense debate. The debate around these new business models highlights the need for a better understanding of their impact on the economy.

The role of the International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), and United Nations Conference on Trade and Development (UNCTAD) Durito Handbook in improving the measurement and understanding of digital trade was acknowledged. The handbook, which resulted from the cooperation between these institutions, provides clarification on definitions, compilation guidance for statisticians, and country examples. Its endorsement by countries globally after extensive consultation is a testament to its importance in improving digital trade statistics.

Furthermore, it was highlighted that digitalisation is transforming how goods and services are produced, purchased, and delivered. This digital transformation of the economy and services is reshaping the way businesses operate and creating new opportunities.

Measuring digital trade was recognised as a complex task, requiring multiple sources and methods. Statisticians need to measure not only digitally ordered goods and services but also digitally deliverable services. Customs reporting requirements and trading services surveys need to be modified to include questions specific to digital trade. These modifications are crucial to capture the full extent of digital trade.

Implementing the recommendations of the handbook poses challenges, particularly for developing economies. Considering the complexities in measuring digital trade, the implementation of the handbook’s recommendations may be more difficult for these economies. To address this, a coordinated statistical building programme is introduced by the four institutions to assist developing countries in adopting the recommendations and improving their statistical capacities.

The presentation provided extensive information on digital trade statistics and its complexities, shedding light on the importance of collecting data and understanding the landscape of digital trade. It was emphasised that data on digitally deliverable services and digitally ordered trade are significant indicators of the opportunities and challenges in the digital trade arena.

The moderator emphasised the importance of understanding the future of digital trade for economic growth. With digitalisation continuously shaping the global economy, it is crucial to stay abreast of the latest trends and developments.

It was also noted that policymakers play a pivotal role in the production of statistics and have the power to allocate funds for the development of new statistics. Policymakers should consult with relevant stakeholders, including ministries, National Statistics Offices, and central banks, in the development of national strategies for statistics. Considering the specific trade interests and growth opportunities of each country, these strategies should reflect a holistic approach.

Finally, Barbara’s contributions were acknowledged as a major achievement in improving knowledge on digital trade. Her input was commended, underscoring the importance of collaborative efforts in advancing research and understanding in this field.

Overall, the discussion highlighted the need for reliable statistics on digital trade, the emergence of new business models, the role of the Durito Handbook, the digital transformation of the economy, the complexities in measuring digital trade, the challenges in implementing the handbook’s recommendations, and the importance of understanding the future of digital trade. Policymakers are encouraged to consult with relevant stakeholders and allocate funds for the development of new statistics to drive informed decision-making.

Moderator:
So, welcome to this session of the WTO Public Forum on Measuring Digital Trade. This session is co-organized by the IMF, OECD, UNCTAD, and the WTO. My name is Jocelyn Magdalen, and I am a counsellor in the WTO’s Trade and Services and Investment Division, and it is my pleasure to be here today to moderate this session that I believe will be a very interesting one, and for everyone, not only from a purely statistical point of view, but also for policy makers and other stakeholders. Indeed, there have been huge efforts by the international statistical community in the past few years to clarify what digital trade is about, because although many definitions are floating around, statisticians need a working definition to be able to know what they have to measure, and beyond this, it also enables us to better understand what such trade actually entails, and this work will help promoting actions to improve the availability of long-awaited official statistics on digital trade. The reason I’m saying official is because there are many figures floating around out there, but I don’t think we have actually proper official statistics on digital trade like we do for merchandise trade and services trade statistics, for example. The topic of digital trade has been discussed for three decades, and probably even more than this, in various fora, but policy makers still have to rely, as I mentioned, on anecdotal information in the absence of these official statistics. We are increasingly witnessing the digital transformation of the economy, whether as households or businesses. Digitalization is transforming how goods and services are produced, purchased and delivered. Although we believe that digital trade is an important component, we still know too little about its actual size and how it contributes to the development of economies. This is particularly true for the ordering of goods and services, which nowadays is by large conducted online, but even more striking for services where proximity of producers and consumers is no longer the only option. Indeed, services can increasingly be traded at distance thanks to digitalization. New business models have also emerged in recent years. For example, online platforms are becoming important players in all our economies with often intense debates regarding their role, functioning and contributions to individual economies. Having reliable and comprehensive statistics on digital trade, therefore, is key for effective policymaking for all economies and at all levels of development. This is true not only for international trade policymaking, but also for other areas, such as competition policy or taxation policies, amongst others. During this session, we will therefore be discussing the measurement of digital trade, and more particularly in the context of the newly released IMF OECD IMF UNCTAD-Durito Handbook, as you can see on this screen here. Like before introducing the speakers to this session, add that this handbook is the result of the great and continuous cooperation between the four international institutions, but it is also important to note that it benefited from inputs from a large group of contributors, in particular from national experts. In that context we therefore believe that this makes a major contribution to improve the measurement and understanding of digital trade. So now let me introduce our speakers who are sitting here on this podium. So first on my right hand side, Antonella Liberatore who is the head of trade and business statistics and working in the OECD statistics and data directorate. On her right we have Daniel Kerr who works in the e-commerce and digital economy branch of UNCTAD. And finally my dear colleague Barbara D’Andrea who is a senior statistician and acting chief of the international trade statistics section of the Dublizio economic research and statistics division. We were also supposed to have Patrick Quill from the IMF balance of payments division to join us on this podium to present the handbook but unfortunately he could not make it at the last minute due to a change in his heavy agenda. So just before we start the presentation, please note that we will be taking the questions from the audience at the end of the presentation by the three speakers. And with this, again dear colleagues, the floor is yours. Antonella.

Antonella:
Thank you, Jocelyn, for this very nice introduction. You have said maybe half of the most important things that this audience needs to take away. But anyway, I will start this presentation with a little historical background, if we can say so. So efforts to measure digital trade are not precisely new and I would say that the first important milestone happened here in the WTO with the establishment of the WTO work program on e-commerce. This was in 1998 and it was accompanied by a definition of e-commerce. The definition was not a statistical definition but there was a definition. Then we had some other initiatives more on the measurement side and some are listed here, the ones that we think are, you know, most important to mention but the list is not by any means exhaustive. So in terms of measurement, the definition of e-commerce that was developed in the OECD in the early 2000, 2001 and then the current definition from 2009 is, as we will see in a minute, important for the development of digital trade statistics. Then we had, starting in 2015, important work done at UNCTAD on the definition and measurement of ICT services and ICT-enabled services. Then we had some more work related to complementary measures or readiness measures such as those done by the World Bank or the ITU or the World Economic Forum, starting in around 2016 onwards. And then a big push in the measurement agenda was given actually by the G20, starting with the Argentinian presidency in 2018. So then with the ministerial declaration, then there was this G20 toolkit on measuring the digital economy and finally there is this OECD Going Digital project, which is a broader initiative started in 2017 but has, I mean, as I said, it’s broader than just measurement but has a measurement component and it’s still going on and now at the fourth stage. So building on all this, in 2019 we published the first edition of this handbook, so the Handbook on Measuring Digital Trade. It was a collective effort, the first one as well, as Jocelyn said, and it’s important because since that publication we have a statistical definition of digital trade and we have a conceptual framework for measurement. So already then, I mean, it was, as I said, a collective effort. At the time, there was a specific task force chaired by the OECD and the WTO, a group of experts came together, lots of consultations went, I mean, were done at the time. So we can say that the framework has been established already four years ago with this first edition. Now, what we are going to present today is the second edition, another, as Jocelyn said, collective effort. There are even contributors in this room to the work. It doesn’t change the basic conceptual framework, but it enriches a lot the compilation guidance, which is what’s needed to actually produce the statistics. So it includes a lot of clarification, a lot of new experiences, and a lot of inputs from countries, as Jocelyn said. So this is what we are going to present today. We’re going to give you, you know, some ideas about what’s in this handbook, although you have to remember that the main audience for this handbook are compilers, statisticians, so probably not you directly in the room. And I will continue with some more basic concepts, and then I will give the floor to my colleagues Dan and Barbara for some more specifics on digital trade. So let’s see if it doesn’t go. So having covered a little bit the historical background, this slide is about terminology. Because there is a lot of, I mean, there could be some confusion about the terminology, what’s digital trade, what’s e-commerce, how they relate to each other. So this is what this diagram tries to explain. So as I said, the WTO definition is where everything started. So you can see that this encompasses most of the other concepts. The WTO definition covers production, distribution, marketing, sale or delivery of goods and services by electronic means. You know this is not a statistical definition, so the statistical definitions, the two statistical definitions that are important to remember are the first, the e-commerce definition, and the second is the digital trade definition. I am not going to read those definitions aloud. They are going to be explained by my colleagues in a minute, but what we really want you to take away from today is that e-commerce is about ordering and has a domestic component and an international component. Digital trade is about ordering and delivering and has only, I mean, it’s trade, so it only has an international component. So the shape that you see in the middle, that’s basically the common point between e-commerce and digital trade. So digitally ordered trade is equivalent to international e-commerce. And then the last point that this diagram makes is, of course, the overlap between digital order and digital delivery. So some services are both digitally ordered and digitally delivered, and we will, my colleagues are going to go a little bit more in detail on that. So to conclude this introduction, we’re going to talk about the statistical framework a little bit. The upper part of this diagram is the actual, it’s what in scope actually for digital trade. So all the transactions that are in scope for digital trade are included in trade statistics because they are within the production boundary. So the nature of the transaction is what defines, is the defining characteristics of digital trade. So digital trade is all trade which is digitally ordered and or digitally delivered. And you will have these three possibilities there. Then, of course, the product dimension. So digital trade. includes goods and services, although it’s important to mention and to remind everybody that services can be digitally delivered, but goods cannot. And then finally, we have the actors. The actors dimension simply says that everybody, all economic actors can engage in digital trade, including consumers, individual households. So the dotted line, as I said, is what we call a statistician’s production boundary. You don’t have to know this technical term. The most important thing to understand is that digital trade is not something additional or different than trade. It’s part of trade, and it’s part of the macroeconomic statistics. So this framework is totally consistent with the frameworks that we use to measure the economy in general. So when we talk about measuring digital trade, what we actually mean is carving out this dimension, this nature of transaction dimension, so within existing statistics of trade in goods and services. So what’s in the bottom part, so below this dotted line, is the non-monetary digital flows. So those are data flows that do not entail a monetary transaction. So they are not in scope for digital trade. We measure the goods and services that are traded. We do not measure the data that allows this trade in goods and services. With this, I think I will pass on to my colleague, Dan.

Dan:
Thank you very much, and it’s a pleasure to be here to talk to you all today, starting with digitally ordered trade, if I point the thing in the right direction. So you may have read this on the previous slide that Antonella just showed, but it’s worth going through in a bit more detail. So digitally ordered trade is defined as the international sale or purchase of a good or service conducted over computer networks by methods specifically designed for the purposes of receiving or placing orders. And I just want to draw your attention to two key… bits of phrasing within there. The first is computer networks. We’re talking about transactions, orders being placed across computer networks, usually the internet, most often the internet. And the second thing is that those orders should be placed by methods specifically designed for the purpose of receiving or placing orders. So what that means is, for example, if you go onto a website or an app that has an online shop, that online shop is clearly specifically designed to receive orders. But if you message your local bakery through WhatsApp and say, hi, I’d like to buy some bread, that’s, WhatsApp itself is not designed specifically for receiving and placing of orders. Now this wording does not come from us. This sort of framing of digital ordering, it comes from the definition of e-commerce that was developed by the OECD back in the earlier 2000s. So what we have here is two important points, that digital ordering is the same as e-commerce, when you see that term used here, e-commerce ordering. And digitally ordered trade, therefore, is the same as international e-commerce, as Antonella has just shown in the previous slide. Now when it comes to what can be traded by e-commerce, both goods and services can be ordered online. And that includes, indeed, some digitally delivered services that Barbara will talk about in a moment. So if you clocked it in the earlier slide, there is an overlap between the digitally ordered trade and the digitally delivered trade concepts. All economic sectors can engage in digital trade, as we’ve already heard. They can engage in digitally ordered trade as well, and as both buyers and sellers. So we’re all familiar with how businesses sell things to us as householders, but they sell things to governments too, they sell things to non-profits too, and all those sectors use digital ordering. But also you have government-owned bus companies that sell bus tickets online, and you have non-profit hospitals that sell services to governments through online systems specifically designed for the placing of orders, and that counts when it crosses borders. as digitally ordered trade. So when it comes to measuring digitally ordered trade, there are two key starting points that I’m going to look at today. The first is digitally ordered transactions involving businesses, and the second is digitally ordered trade in goods. So to look at the first one, well, when it comes to making things and selling them, businesses are the main players, right? So therefore, we should expect that in most economies, businesses are also going to be the main players when it comes to e-commerce sales. And also, for what it’s worth, the evidence shows that for buying things via e-commerce too. Most purchases made via e-commerce are by businesses buying inputs from other businesses. We won’t go into that in detail today. What that means is that we can, this link between digitally ordered trade and e-commerce means that we can build upon business ICT surveys used to measure e-commerce uptake in businesses to be able to measure the value of digitally ordered transactions. And those sources can be used to cover both sales, which when we’re talking about trade is exports, and purchases or imports. And we could also collect very similar data using core business surveys. We don’t have to use business ICT surveys in economies that don’t have them. But the kind of questions you need to use and what you need to gather is essentially the same. And what this means is that both domestic and international e-commerce can be measured together consistently through a single source. So we can get a single measure and consistent measure, as you can see in the charts on the screen behind me. So what these show is that in the country shown, the majority of e-commerce transactions by value are domestic, the green blocks. But there’s, in both Canada and in Malaysia, a significant portion that is international e-commerce, digitally ordered trade transactions. And as we see in Malaysia, that portion is growing. Now I’d just like to highlight that some countries go beyond this and they collect more detailed information such as the partner country or region, as you can see in the Canadian sort of donut chart up there, or also detail on the products being traded. So things like, is it a good, is it a digitally delivered service, or is this another type of service that allows us to compile the statistics that we need? Now to move on to digitally ordered trade in goods, let’s start by saying that in many countries, far from all countries, but in many countries, most cross-border trade is in goods rather than services. So if we believe that that carries over to digitally ordered trade, that if we can try and measure digitally ordered trade in goods, then we can get a big piece of the puzzle. So several countries, which are given as examples in the handbook, have actually modified their merchandise trade customs reporting procedures to identify shipments that are digitally ordered, take the values off those shipment information, and then add them up to look at the scale of digitally ordered merchandise trade coming in and going out. And you can see the example here of China. I want to express our deep gratitude to China Customs that really were an amazing partner in helping us to put this together, and shows that by making relatively minor modifications to their customs reporting, they’ve been able to measure both digitally ordered imports and exports for goods. And we can see they’re growing very well, at least on the export side. But those are two key sources and two really good starting points that the handbook advocates for, but it’s generally that only gives us transactions involving businesses or transactions involving goods. And while these are two of the largest elements of digitally ordered trade, they’re not the only elements, and we should note that they also overlap. Services can also be digitally ordered. Non-businesses, as I said before, also engage in digitally ordered trade. So the handbook presents various other sources that you can use to get a more complete picture looking in detail at the coverage of the relevant concepts that we want to measure and the different flows, imports and exports. And that includes household surveys. So that could be surveys of ICC usage in household, of expenditure in household, of tourism. We can see up here, we have the example from Italy. They used their household tourism statistics to look at travel packages and accommodation being bought online versus offline. You can look at VAT returns data and try and get some information out of VAT returns. Car payments data, so where we’re using payment cards to buy things online, that can be used as a source of information. And also you can have multinational enterprise surveys that, because M&Es are such a big feature in the trading system, can give us another big part of the puzzle. So on digitally ordered trade, I think, yes, that’s it. Barbara.

Barbara:
Thank you, Dan. Thank you very much. So let us move now to a digitally delivered trade. And I would like to say that substantial work has gone into this chapter. In fact, we were confronted with multiple definitions that, statistical definitions that were developed by different institutions over the years that were all aiming to capture the international supply of services at the distance through digital technology. ICT enabled services. potentially ICT enabled services or potentially digital deliverable services, digitally delivered trade in the first version of this handbook, they were very similar in some respects, yet they were different. So this was confusing, not only for statistical compilers, but also for users. So the first thing in this domain was to converge into a single definition for digitally delivered trade. And we were able to define it as all international trade transaction that are delivered remotely over computer networks. Let’s say that the handbook takes the convention that only services can be digitally delivered, and this is fully consistent to an existing trade statistics that you can find on our websites or from national sources. So only services can be digitally delivered. Delivery can take many forms. It can also include phone or fax or video calls, emails, and of course, as apps and digital intermediation platforms, as we have seen already for digitally ordered trade. So digitally delivered trade in the handbook is basically equivalent to mode one cross-border supply, as identified in the WTO agreement, a general agreement on trade and services, mode one, but for digitally deliverable services. Now, while I think this, Antonella has already touched upon a little bit the new part and also Dan, there is a conceptual overlap, meaning that many, and in fact, most digitally delivered services very often are also digitally ordered. although not necessarily. I can sign up in presence to a language course then will be taking place online and be provided by a foreign language school, for example. So I mentioned digital deliverable services. So what are digital deliverable services? So the first step is to identify digital deliverable services in the balance of payment of a country because the balance of payment is the main source of all the data that you find on services trade. So that is the first step. But then the second step is to carve out services that were actually digitally delivered. So, I don’t think so, okay. Oh, sorry, yeah, this is the one. So what are digitally deliverable services? Let’s say that while all services and of course goods can be digitally ordered, potentially all digitally ordered, not all services can be digitally delivered. This is due to their own nature. Some services must be provided in presence. Think about accommodation services or passenger transport services. So as we said is the first step is to identify this digitally deliverable services. Some services, however, are born digital. Think about cloud computing services, you can think of LAN software downloads, online gaming, streaming on media, digital communication services. and so on. I’m sure you can add on many more examples. But in other cases, there are services which were previously provided mainly in person, but are now commonly accessed and provided through online interfaces at international level. So like insurance and pension services or many financial services. There are also other categories of services where over the years, we’ve seen a replacement of in-person interaction to online interactions. And this is taking place particularly during the pandemic, which saw a boost in services trade digitalization. And I’m sure also here you can find many examples, but this, it comprises an ecosystem of business, professional services ranging from legal services to architectural to management consultant services and also others like health services. Think about telehealth. I just gave an example about e-learning. So that’s another one. So there, of course, and for these kind of services, while we see an increase in digitally delivered, they might still be provided in person. So there is a mix. Hence the difficulties to carve out from the amount, from the official statistics, the portion of services that were actually digitally delivered from those that were provided internationally through in-person interactions. So that’s the difficulties. Let me say that the handbook, and you will see which is accessible online, contains both an aggregated list of digitally deliverable services and a country’s balance of payments. So you will find. in your country’s statistics, for example, on our website. So that’s a list. And also, sorry, and first the condensed, and then another one which is very disaggregated in one of the Annex and Annex C. So you see all the entire breakdown. What we can say is that digital deliverable services are naturally larger, you know, the total value of digital deliverable services is higher than the value of services that were traded, at least higher or equal to the value of services that are actually digitally delivered. And I think this can be seen in the chart on the left, which is the black line over there. So these are, you know, is the amount of the global export of digitally deliverable services as estimated. You know, by the WTO earlier this year in April. And then you will see that the red line, dotted line is smaller, so I mean the amounts are smaller. And this represents the estimated value of digitally deliverable services. How we’ve done this? Through a recommended approach in the handbook, that is through applying expert judgment shares, taking into account the experience and the results of the country’s surveys. And yes, and otherwise following an approach that is recommended in the manual statistics international trading services. So if you want to know more, of course you can get back, but we don’t want to give you all these details. So, just the last thing. So we probably you’ve heard, I mean, coming here to the WTO, there’s a lot of talk about this digitally delivered services. So we have estimated them as a value of $3.82 trillion in 2022. and have been growing. You can see in the chart much more rapidly than goods exports and other services which are not digitally delivered. So regarding the composition, and again this is according to our estimates, the bulk of digitally delivered services is represented by business services, mainly provided to business to business. This is a lot, there’s also intrafirm trade, and they represent some 40% of the total, and they’re followed by computer services, which are rising over the years very rapidly, and then financial services, and then you see all the other categories, they are a little bit smaller. So now we move on, so this is the first approach, sorry, okay, so this is the one. But of course, these are expert judgment shares, this is the first step. What is recommended is that countries develop international trading services surveys, and then they use, for those who are already using them, for compilation of their trading services statistics, and add some questions to capture this remote delivery of services, some specific questions that can help out. And these are just a couple of examples. For the US, they started already many years ago, and let’s say that they’ve gradually improved the surveys, because you learn from experience, we all learn from experience. And so they’ve managed to gradually improve the surveys when there were some shortcomings, and this applies also, of course, to other countries. Just for your information, the U.S. is actually currently preparing another benchmark survey and they are targeting specifically digitally delivered services. They’re expanding and they’re using the definition in the handbook. So that’s and they’ve expanded also the number of sectors which will be covered from 13 to 18. But this is just an example. So they were digitally deliverable. So this was already since many years ago, the first attempt. I think a very successful example is that one of Costa Rica, which has now arrived to the sixth edition. And this is because Costa Rica was one of the first countries to take advantage of UNCTAD’s pilot surveys on ICT-enabled services. So they’ve been capturing their exports of digitally delivered services because basically the definition is the same. And you can see in the chart on the right that these services, they represented, especially during the pandemic, more than 50% of their total services exports and 20% of their total goods and services exports. But more importantly, they accounted for 7.2% of their GDP. So this is the important contribution that this sector can make to a country’s economy. And this is for 2021. And in the handbook, of course, you find many other examples of other countries. So if you’re interested, and also the service they have used. But why? Sorry for Argentina. I don’t know why, but I don’t know what has happened there. So while some countries have focused on the business side and on the export side, others have explored other data sources to capture the inputs. And this is the case using administrative sources like VAT and this is the case of Argentina. They capitalized basically on some legislation that imposed VAT tax also on non-resident providers of digital services. And then of course this information doesn’t come out ready, but combining with information collected from those who are in charge of revenue collection, they were able to come up basically with an estimate. If you want to know more, I will tell you more. I think what is important is that they have been able to measure what was the input. So what is paid by household. And this is important because the expenditure by household is probably a weak part on our trade statistics and you see the composition and most of the expenditure in their own experience which is very recent because this is data for the third quarter of 2022. For trade statistics it’s very recent especially and it’s basic audiovisual. Or a similar example is by the expenditure by household also in Ireland which also combined with other publicly available sources and so on. And again like in the case of Argentina, most of the expenditure by household is on music and streaming, video streaming and all of that. That’s where the inputs are. Online gaming, they had also online gambling and so on. So these amounts are in a million euros and their main partner in that case were other European countries. And I’ll stop here. So I’ve spoken already too much.

Dan:
Thank you. So Jocelyn mentioned earlier that unfortunately our friend Patrick couldn’t be here. Now Patrick has a lovely, relaxing Irish accent. I’ll save you my impression. You’ll just have to put up with my dull accent instead. So as we heard earlier, there was a mention of digital intermediation platforms, which are an important part of the ecosystem when it comes to both online ordering, sorry, digital ordering and digital delivery in the trade area. So what do we mean when we talk about these? They’re defined as online interfaces that facilitate, for a fee, the direct interaction between multiple buyers and multiple sellers without the platform taking economic ownership of the goods or rendering the services that are being sold. So there’s a couple of things I’ll draw your attention to there. The first is we’re talking here about online platforms where we have multiple buyers and multiple sellers, not a single seller selling their wares to everyone. Secondly, the platform itself is not ultimately responsible for rendering the actual good or the service being intermediated. Give you an example. Two weeks ago, I ordered a beautiful vacuum cleaner off eBay. The seller was responsible for sending that to me. They did send me a vacuum cleaner, but it was the wrong one. Ultimately, they were the one responsible for not giving me the correct underlying good that I bought. But eBay, as part of their intermediation service, liaised and made it all right. And why do eBay do that? Why did the platform do that? Well, they do it to make money and they make money by charging fees to the buyer, the seller or both. So I think all of us in this room could probably name at least 10 different online platforms, online DIPs. They’re really key drivers in the digital transformation and we see that their impact or their role is growing. So, the role for DIPs is to, on the one hand, to facilitate access to the global marketplace, and this is especially important for smaller businesses as a way for them to begin accessing customers on the other side of the world. They can also give buyers not only access to a much wider product variety, but also a great ability to easily compare prices and sort of minimize their spending accordingly. And they actually are also enabling what we might call new activities or business models, such as where you’ve got households transacting directly with each other instead of almost acting like businesses, or like resource sharing of vehicles or things like that between households. And on the right, we can see from the chart that sales through these online platforms, these DIPs, has really been booming. It shot up greatly during the pandemic from 2019 to 2021, and almost, I think it’s $4 trillion of transactions going through these selected platforms now. So DIPs’ role is to intermediate transactions, but there’s kind of a difference between what happens sort of in real life versus what happens in economic reality. So often what happens, this isn’t always the case, but often what happens is that a buyer purchases from a seller, sort of this is always what happens, a buyer purchases from a seller via a DIP. Often what happens is that the buyer pays the DIP the money for the transaction. The DIP subtracts the fees that they charge, and then it pays the remainder to the seller. But that flow doesn’t really reflect the economic reality. What’s really happening in economic reality, which we want to capture in our trade statistics, is that there’s a payment from the buyer to the seller for the good or service that’s actually being transacted. And then there’s a payment or payments from the seller and or the buyer to the DIP for the intermediation service that they’ve provided. So it might be one transaction in terms of a swipe on your bank card, but there’s actually two things that you’re buying when you do that. And of course, the buyer, the seller, and the DIP can be resident in different economies. And when that happens, we end up not just with multiple transactions, we end up with trade transactions. Now in terms of measurement experience, there’s actually very limited country measurement experience in disaggregating things this way to measure them according to the framework. But what the handbook, the handbook does share what experience we’ve been able to gather. And it recommends collecting information from DIPs that are resident in your economy using enterprise surveys. It also recommends collecting information on transactions made by DIPs using ICT usage surveys or other surveys, perhaps of households and businesses. And it also looks at possibly using other sources such as card payment data to focus on major dips. So often in card payment data, you get an item that tells you who the payment was to. We’ve all heard of Netflix. You can maybe pull them out and aggregate some statistics from that. So with that, I finish on DIPs and if I can just change the slide. There we go.

Barbara:
Yeah. Thank you very much, Dan, because obviously I have a little problem. Maybe because I’m too far away, too far away. So yeah. Let’s just take some key technical ways. I think that the second edition of the handbook really represents a major step forward over the improvement of digital trade statistics and towards the measurement of digital trade. As you will see, it is very rich in terms of – first of all, I said already, it clarifies definitions, but it’s also very rich in terms of explanations. compilation guidance for the many statisticians around that are first-timers into this domain. And lots of country examples, you know, about experiences so far, and other digitally ordered, digitally delivered, the platforms, digital intermediation platform, and so on. An important key, an important point here to stress is this, it has been, the handbook has been endorsed by countries through extensive consultation, through global consultations in different statistical forums, and we all wish to thank them all for their contribution to the development of, and the production, you know, of this handbook throughout the many months of work, of joint work. Another key takeaway is that clearly this presentation has shown you that measuring digital trade is complex. There are multiple sources that are needed, there are multiple methods to be able to capture all its dimension and to build it in a coherent manner. We need, you know, the priority is to measure digitally ordered transactions by business. We need to measure digitally ordered trading goods through adjustments in the customs reporting requirements. In order to measure digitally delivered trade, we have to ensure to have a full product availability for digitally deliverable services. And we need to include questions on digitally delivered in international trading services surveys, as we said is the recommended source. So it is clear that due to these complexities, the handbook, I mean, Implementing all these recommendations is very challenging, especially for developing economies, and that’s why Hamburg introduces a coordinated statistical building program by the four institutions to the benefit of developing countries to ensure that they are not left behind in their ability to measure, to monitor, and to respond to the challenges of digital trade.

Moderator:
Thank you very much, Antonella, Dan, and Barbara, for this very rich and interesting information. I think a lot of information has been provided in the presentation, a lot about statistics, explaining also the complexities of understanding what digital trade is about, so hoping that this is also useful beyond the pure statistical world. I think it’s also interesting to see how this has developed in this context and how this can then also be used and useful beyond just the pure statistics work. Given that we still have time left in front of us, which is great, so thank you for the great timing, I would like to open the floor for your questions or comments on all this work, and please, before raising your question, may I ask you to provide, give us your name and your affiliation. So the floor is open.

Audience:
I see a question. I’m Matt Nicely with Akin Gump. I have a question that I feel almost like an idiot to ask it, but I’ll ask it anyway. Um, when you think about the digitally ordered versus digitally delivered, I can imagine obviously we’re all very interested in having better data on actual services trade, digital trade, the flow of money, paying for a service or a good. What’s the interest, what’s the value from your perspective on gathering information on what is digitally ordered?

Moderator:
Thank you. Are there any other, maybe we could take two or three questions first. Any other questions? I see one in the back on the left-hand side first. Please.

Audience:
Yeah, I’m Tomaso Giardini from the Digital Policy Alert. I wanted to ask what you would consider the main limitations of this methodology and looking forward what you’re hoping to improve for the next version.

Moderator:
That’s a very good question. Thank you. Please.

Audience:
Mario Canales from the World Economic Forum for Mr. Daniel Kerr, if you had to choose three already available statistics or data points that offer a glimpse of the current state of digital trade in the world, what would they be?

Moderator:
Thank you. So who wants to start?

Antonella:
Barbara, which one do you want to take? Thank you for the question. I hope that I understand the question correctly. So you’re asking, what is the value, I mean, what’s the why, basically? We are measuring digitally ordered trade in general, right, goods and services, right? Okay. It’s a good one, actually. I mean, it’s important to remember why we do things. Otherwise, you know, we feel that, you know, we’re doing work for nothing. So it’s a good one. I mean, so the way things are traded, so the way products are traded matters, okay? So these digital technologies, they allow, in particular, so we are talking about digital ordering. So the ability to place orders or receive orders in a digital manner. So increase, I mean, gives you access to new markets, right? It gives you the, if you’re a business, it gives you the possibility to reach global markets in a second, let’s say. If you’re a consumer, it gives you options to buy from different places. So we are interested, of course, in this way of trading. And we are interested because there may be barriers to this digital ordering. So this is where we want to, you know, monitor, you know, this evolution because if there are barriers and if there is something that hinders, then, you know, we may have a problem. So that would be my short answer. Thank you.

Barbara:
Yeah, maybe I can add. I mean, I think that we all know that there are negotiations ongoing here in the WTO. So there are, so this tells you already why it is important. So we are having to track without going into too much detail. It is important to provide policy makers and trade negotiators. with the data to make an informed decision about the policy. And I think this is the most important. We don’t want to produce statistics for the sake of producing numbers. I think, Antonella, you mentioned that there is a reason why we are doing this, and this is a very important reason. I want also to add on the statistical capacity building on activities in this field, because we don’t want the developing economies being left out from the growth opportunities of digital trade. So that’s why we’re doing so. But then I wanted to respond, I think, to the second one, from the Digital Policy Alert, about improvements. So what else can be done? Okay, I was a little bit discouraged when you prepared for the next one, because we’re actually quite relieved of having produced this one that was published, because it was quite a bit of work by the four institutions. So I’m not looking forward to that right away, I tell you. But we have identified some areas that probably would need a little bit of understanding, like in the digitally ordered part. We know that, for example, you can sometimes use WhatsApp, for example, to order something. So this is, according to the handbook, is not strictly speaking a method to be specifically designed to placing and receiving orders. So would that be covered? Not really right now. But of course, if we think that there are some automatic, artificial intelligence which the technology would change, then yes, there will also be. But there are many other areas of future developments and because there are ongoing revisions in the macroeconomic statistical framework, both in the national account statistics and balance of payment statistics and the handbook, you can read it, so it’s ongoing at the moment. It’s new, it will be released in 2025, so they’re working on this. And of course the next edition of the handbook will have to take into account any changes in this macroeconomic statistical framework to ensure the coherence, because we need to ensure coherence of statistics on digital trade with statistics on trade that is not digital. So that’s why I would say that. Thanks.

Antonella:
Before, sorry, before going to Dan, I wanted to add something on this question about the future work and Barbara, I mean, I totally agree with everything Barbara said, but I wanted also to give a more positive note in the sense that we have tried to build this in a way that’s a little bit kind of future proof. So as Barbara said, so the new macroeconomic standards, so they are coming, so in the next couple of years, you remember at the beginning I thought about this production boundary. So the production boundary is going to change a little bit. So the framework that we have allows for that implicitly. So it’s already basically covered, but of course there are some more areas of, I mean, of research, but it’s more, I would say a little bit more on the empirical side on how to interpret some definitions, how to measure some things that, for which we don’t have a lot of experience, like Dan said, the platform. So let’s say that the broad conceptual framework, to be honest, I believe it’s pretty stable and established, but the work is not completely over.

Dan:
Yes, I was going to make a similar point to Antonella, which is that really when it comes to this handbook, what I’m greatly looking forward to is hopefully seeing that the core concepts stand the test of time. But what will happen is that countries and other partnerships will work to implement the framework and to work out bits that aren’t completely clear and need further development. And that will take us to new experiences that can be shared across countries to help broaden the implementation of the framework. And one way that we plan to do that, and I’m greatly looking forward to, is through our statistical capacity building coordinators across the four organisations to help countries in doing that. And ultimately, my dream, hopefully by the time I retire, is that we might one day have a database, enough countries have done this, to have a database with statistics in it and really get a much better grip of what the world looks like when it comes to digital trade. Which leads me on to the question that was posed to me. So I was asked, I feel like I’m doing a test or something, but three statistics or data points that give a glimpse of, or an understanding of what the digital trade landscape looks like now. So the first thing I would like to highlight is the, actually at UNCTAD this week we’ve just published the updated statistics on trade in digitally deliverable services. They show us that in 2022, the digitally deliverable services comprised 55% of total services exports globally. That’s declined a bit from the peak in the pandemic, which was 63%. But when you look into the data, what’s happened is that actually the amount of digitally deliverable services trade has kept growing. It’s just that trade in other services has come back from the pandemic disruption. Now that’s one of our two subsidiary concepts, digitally delivered services being. proxied through digitally deliverable services trade. When it comes to digitally ordered trade, we have much less information, unfortunately. That is an area where there’s more to do. But in a recent report that we published at UNCTAD on measuring the value of e-commerce, we looked at what countries had on the amount of money businesses were making through e-commerce sales. And as part of that, we looked at the information they had on international e-commerce. And for the few countries that we found through that, we found that digitally ordered exports were worth, for those small number of countries, between 5% and 18% of total goods and services exports. Now, Barbara and I have spent a lot of time discussing this, and it’s very back of the envelope to put those things together. We’ve discussed the conceptual overlap that you really need to gather primary information on. But when we try to put them together in the best way that we can, we come up with an estimate that digital trade for those countries, digital trade exports for those countries, account for somewhere between 10% to 45% of goods and services exports. So if we extrapolate from that to the global level, the global average is probably in there somewhere, but it’s a big range. And this is why we need to implement this framework, to get a proper view on the role of digital trade as a portion of total trade.

Moderator:
Okay, thank you. I think Torbjörn wanted to ask a question, and two questions at the back.

Audience:
Torbjörn. Thank you so much. So my name is Torbjörn Fredriksson. I’m leading the team in Ankta that has been contributing to this fabulous report, I must say. And I dare to say that, because when we talk about these kind of joint efforts of big international organizations like we’re seeing on the podium here, and IMF who is not there right now. It’s a tremendous effort. And sometimes we just think that this is the abstract IOs that are coming together in the grand scheme. Actually, this work has been very much done by four people. And these are the three there, plus Patrick. And I think you deserve credit because you have worked day and night to come to groups with very difficult and challenging work. And you have done so in an extremely collegial manner, which is really exemplary, I would say, to how we should work together among the international organizations. I just wanted to commend the work that you guys have done. And I would suggest a big applause for you guys. You’re too kind. Thank you for taking over my role as a moderator. Okay. The gentleman at the back first. Yeah, thank you. Simon Lacey from the World Economic Forum. It’s very nice to hear. It’s not often you get praise from your boss. So you guys really just enjoy the moment. I just wanted to say, I think Barbara’s response to the question from the Digital Policy Alert reminded me of something that Daniel Craig once said. Remember, Daniel Craig was this James Bond actor. And after he made Spectre in 2015, which was like his fourth James Bond film, somebody asked him, would you like to make another James Bond movie? And he said, I’d rather slip my wrists. But then he sort of went on to make the last one in 2021. It wasn’t Die Another Day. What was it? I forget. Anyway, but just a serious question. So I was talking to some statisticians at UNESCO at the end of last year about some of the linkages between trade and the SDGs. And they told me that there was a big effort right now going on to build capacity in national statistical agencies to help them. to help them better monitor progress towards achieving the SDGs. And so my question is given that there are also linkages between digital technologies and achieving the SDGs, is there some sort of alignment of these capacity building efforts to better empower national statistical agencies to capture statistics on the digital economy and measure how close we are to achieving the SDGs, things like access to clean water and the many other indicators that we have? Thank you. Thank you very much. My name is Preetam Banerjee. I’m from the Center for WTO Studies. First of all, congratulations on an excellent piece of work. Thank you. On the digitally ordered goods, one of the things that we used to look at earlier was two WCO or World Customs Organization categories. These are the low value dutiable and the low value non-dutiable because most of the B2C moves around these two categories as well. So my quick question was that would that also be an interesting source to look at for this category of trade? Secondly, given the source of data you’re looking at, the transactional data, essentially digitally ordered goods are the same and they’re moving in the same trade channel, the only the transaction type is different. So this tension between CIF and FOB values will always remain. So you will not even capture the CIF if you’re looking at the backend transaction. So the discordance between the actual trade data and what you would capture, is that a fact that you have considered or looked at? Thank you.

Moderator:
A third question.

Audience:
My name is Jing Huang. I’m an academic from University of Sydney Law School. So my question is has this statistic also include the digital payment? The issue I ask is whether the digital payment, like you use digital currency, is it a trade in service or something else? Thank you.

Moderator:
Thank you for the three questions. So who would like to start? Oh, okay. Sorry, I didn’t notice. So another question, who first? Please.

Audience:
Thank you very much. I’m Mario Postolov, the Regional Advisor in the Trade Division of UNECE. And we have published and we continue updating a glossary on trade facilitation terms and for us this includes electronic business. Your definitions that you made in the beginning, very simple question, do you see them as authoritarian so that everybody uses them or as working definitions for your publication? Thank you. I’m Hossam Garbi, so responsible of Trade Program in Universal Postal Union. So first I would like to congratulate all the teams for the fabulous report. And as you know, the majority of international shipment are transiting through the postal network. In your report, are the postal data included in the second edition? And if not, so UPU is always ready to join your effort and to cooperate with you maybe for the next report because you know… With the postal data, we have global vision on all the e-commerce transaction and the efficiency of the e-commerce transaction itself through the customs side and also the payment side and would like to have this fusion of data between all the team. Thank you.

Moderator:
Okay. So, who would like to go first? Yes.

Barbara:
Well, first of all, I want to thank you all for your interest because these are very, very good questions, sometimes difficult questions. So, the one on SDGs, yes. Okay. I think that from our organizations, you know, certainly from UNTA, WTO, the integration of least developed countries into the global trading system is one of our priorities and this is also in one of the SDGs, so I think it’s 17-something, 17-1-1. So, we also would like to help them to develop the data, to be able to monitor, to see opportunities for growth. So, that’s for us as one of them, you know, and then there are many others, SDGs, you know, correlated SDG, but from a trade perspective, I think that this is the first one and more in general also for developing economies. So, that’s why we started this. this coordinated statistical program, which in fact it will take place, Dan, I think you mentioned it, in the next few months, you know, we already have a number of activities because our countries are requesting this type of information to build up their capacity in producing this number. Yes, I’ll leave it to the others because there are many questions we can share.

Dan:
Okay, thank you, yes, I just want to add to what Barbara said, though, because it’s not just that there’s a goal, but there is a target in the SDGs that was by 2020 to double the share of LDCs, the least developed countries in global trade. Now that didn’t happen, in fact actually their share has declined, but what can we do about that? Well, digital trade, digital ordering, digital delivery hold huge potential promise for all countries to be able to access new markets, new customers, for skilled practitioners in remote parts of the world to be able to supply services directly into businesses and homes on the other side of the world. So there’s a lot of potential there, but it certainly doesn’t seem to be being realized yet, and unless we make sure that we are measuring digital trade in LDCs just like we are hoping to in other countries, we will never see and be able to monitor whether it’s contributing to us not achieving that target because it’s too late, but achieving the revised target that will undoubtedly come. There was a question on digitally ordered goods about this question of you have your goods trade measured through customs, customs data, like what actually goes through the customs formal systems, and then you have items that are low value so they sort of don’t require the same level of customs reporting or maybe even no customs reporting. So it’s true, if we just take what goes through customs, the data disaggregated by the WCOHS codes like you mentioned, and add them up, that will only give us a partial picture. We can go into that here, but the handbook does include a whole section that talks about the interplay of those two parts and the need to also do estimations for the bit that is non-dutyable, I think you called it. And that brings me on to the link to the postal data. So it’s true, there’s a great correlation between the volume of postal packages transiting borders and digital trade, but on its own the volume doesn’t give us the measure we’re looking for, we’re looking for the value. So it’s not in there as a unique data source, but it is referenced quite heavily in reference to that measurement of the merchandise trade across borders that is below the thresholds, and there’s a source that can be used to try and estimate the volume of that to give us a more complete picture of digitally ordered goods trade.

Antonella:
Okay, so I think I have some leftovers. One was a very good one about the valuation, okay, so related to goods. Of course goods, digitally ordered goods, and how do we value them, is it CIFOB, do we have issues with that? So as a principle, all of the accounting rules, so all of the rules that are used, that are established and should be used to measure merchandise trade, they are digital. applicable, or they must be applied to measuring digital trade. So this includes this convention that we have of measuring, of valuing a product’s goods at a SIF or a FOB price. So this convention is actually a model that we have built, you know, to have this uniform form, point of evaluation, which creates, I mean, it’s kind of, I think it was born to simplify, but it’s actually, I mean, it creates a lot of issues. And it’s not always very easy, you know, to kind of compute these values, when in practice, you know, these goods do not travel from the border to one economy, to the border of the other economy by, you know, following the model to the letter. So my answer to the question is, in theory, yes, everything should be valued at SIF or FOB. When you go into low value trade, you may have issues, you know, postal trade, is it, you have invoices, let’s say, it’s how do you transform invoice values into SIF and FOB valuation. Some compilers have looked a little bit into that. We have examples from China on the handbook. So let’s say that the answer is, in theory, yes, in practice, it’s complicated, but yes, compilers are trying to do this. Then we had a question on digital payments. So payments, so they are the, let’s say, the financial flows are these counterparts of the flows, the trade flows. So trading goods and services is normally accompanied by a financial flow, so a payment. The payment is not in scope for trade, is not in scope for digital trade. So having said that, if there are some fees involved, you know, if there is some service that’s provided in conjunction with this payment and this service is internationally traded, yes, that’s captured. So it can be a fee on a credit card payment, for instance. So that would be covered in financial services, that would be digitally delivered, but we do not cover payments per se. And then there was the last question about our definitions. The definitions are there to stay. It’s not something that we have made up. So I mentioned in the beginning, it’s been a process, it’s been years, it’s been consulted across the world, basically. So now this is the framework that we have for digital trade. As Barbara said, our macroeconomic framework, so the national accounts, the balance of payments, they are all undergoing revisions. The next manuals, they will acknowledge that digital trade is defined like this.

Barbara:
Thank you. I just want to, just to say something else, just a comment. Very often digital trade is considered to be a business or is seen as a business of developed economies. This is not the case. I mean, some developing economies, they’re already fully engaged into digital trade, like digital older services, we discussed this then, and they don’t even know. Think about small, small economies, you know, they’re small. Maybe they’re tourism driven, and maybe they’re export, they have a large number of tourism orders being made digitally through the websites of hotels, you know, some platforms. They might offer, I don’t know, scuba diving services, tour guides that are pre-booked before the tourist arrives, and this can represent an important value. And they’re already into that. But they don’t know. And so we want also that to be known. And that’s why we need to build capacity so that they will be able to share, to capture that amount. I mean, how much they’re actually already trading online and digitally, but they’re not aware. And this can be very big for countries, for small economies, when not a very diversified economy. And actually can be the inverse for some other big economies, which have much more diversified economic structure. So that’s just a reflection. Thanks.

Moderator:
Thank you to the three of you. I just would like, before closing the session, I just would like to use my privilege of being a moderator to also ask one question, if I may, which is basically a forward-looking one. Because now that we have this sound framework to measure the digital trade, what next? I mean, I know you’ve been providing some ideas, but I would like to know probably what should be the priorities, and what could be the role of policymakers in the development of these statistics? So I don’t know who would like to take this question.

Barbara:
I hope you offer me a drink afterwards, Jocelyn, after this. OK. So what is the role of policymakers in all of this? So let me say that policymakers are in the driver’s seat whenever it comes to the production of statistics, I would say, in any domain. And this is including trade, whether digital or not. So, but then they have to, of course, because they can allocate, they have the power to allocate funds for the development of new statistics. But of course, before they do that, there should be a prior consultation, in fact they should consult with all the relevant stakeholders, the ministries, Ministry of Trade, of course in this case, National Statistics Office, central banks, authorities, and so on, to the development, for development of national strategies for the development of statistics. And this strategy, in my opinion, should take into account, should reflect what are the trade interests, of course, which is specific to the country, and the growth opportunities. So in this case, what is the target? Do you see growth opportunities in digital order trade, or let’s say international e-commerce, as you say, of goods? Is it more into the digital delivery of services across borders? Can be both, but then first, once this is set as a strategic goal, then we go down to the production of statistics, and so that this is the role of statisticians to come up with the data which is crucial to inform policy makers. Hope you’re happy.

Moderator:
Very happy. I’m always happy when you say something, Barbara. So thank you very much. I think this brings us to an end to this session. I would like again to say thank you for this big achievement with this. I think this is really, truly a… a major achievement for improving knowledge on what is the digital trade. Thanking my colleagues here on the podium, but also another important contributor to the report, Ying Yang, who’s here sitting in the room with us. And I would also like to thank all participants for making this session very lively. With this, enjoy your evening. Thank you. Thank you. Thank you.

Ulrik Knudsen

Digitalization and its potential to drive inclusive outcomes are highlighted by various speakers. They argue that digital trade brings numerous benefits, such as increased trade and opportunities for countries at all levels of development and across all sectors. For instance, a 1% increase in digital connectivity can lead to a 1.5% increase in trade. Ulrik Knudsen strongly believes in the importance of digitalization for achieving inclusive outcomes.

However, there are concerns about the rising restrictions on digital trade and the absence of global regulations. Despite evidence of positive reforms, digital trade restrictions are on the rise. This underscores the need for more international cooperation. The internet is global, but regulations are not. To address this, increased interest can be seen in building regulatory bridges and common approaches on digital trade issues.

In stimulating digital trade, various areas are identified as priorities, including open markets, education, digital connectivity, and data governance. Ulrik Knudsen calls for more policy formulation and investment to reap the benefits of digital trade. While positive reforms have taken place, there is still work to be done.

On the issue of applying customs duties on electronic transmissions, Ulrik Knudsen supports the renewal of the moratorium. The collective work conducted at the OECD supports the case for renewing the moratorium, as it has a positive impact on decent work and economic growth.

One of the biggest challenges in digital transformation is the uneven distribution of its benefits. Speakers argue against giving digital transformation and globalization a bad name based on this uneven distribution. They highlight that both globalization and digital transformation have benefits that are not evenly distributed. The world economy depends on the “globalization engine” and digital transformation to increase productivity.

To address the uneven distribution of benefits, speakers suggest that getting the discussion on digital trade and development right is crucial. This can help resolve issues of uneven benefits distribution and drive positive change. Addressing the nexus between trade and digital is essential. The decisions taken now will impact the perception and acceptance of digital transformation and globalization.

In conclusion, the speakers emphasize the importance of digitalization and digital trade in driving inclusive outcomes. They highlight the benefits and opportunities it brings, but also express concerns about the rising restrictions and lack of global regulations. More international cooperation and policy formulation are needed. The uneven distribution of benefits in digital transformation and globalization is seen as a challenge, but speakers argue against giving them a bad name. Getting the discussion on digital trade and development right is crucial for addressing issues of uneven benefits distribution and ensuring positive change.

Shamika Sirimanne

Digital trade has the potential to greatly benefit developing countries, as it currently represents 55% of global services exports and has shown significant growth since 2010. This indicates a promising opportunity for these countries to participate in and benefit from the global digital economy. However, there is a significant inequality in digital trade, with developed countries accounting for 76% of global exports of digitally deliverable services, while developing countries, including major economies like China, contribute only 24%. This highlights a clear disparity in participation and benefits between different regions.

One of the reasons behind this inequality is the lack of necessary infrastructure and skills in many developing countries. Less than half of the least developed countries have access to fast 4G networks, which are crucial for efficient digital communication and trade. Additionally, digital skills are lacking, hindering the ability of individuals and businesses to fully participate in and leverage digital trade opportunities. Furthermore, many countries still lack reliable e-payment systems, which are essential for secure and efficient digital transactions. It is important to address these infrastructure and skills gaps to create a level playing field for developing countries in the digital trade arena.

Another aspect that impedes the participation of developing countries in digital trade is the presence of outdated laws and regulations. These laws are not enforced and thus fail to create an enabling environment for digital trade. Additionally, women entrepreneurs face difficulties in breaking into the digital economy due to various barriers. These include limited access to resources and networks, as well as discriminatory societal norms. It is crucial to address these barriers and create an inclusive digital economy that provides equal opportunities for women.

Evidence-based decision making is vital in shaping effective policies and strategies for digital trade. Shamika Sirimanne highlights the need for countries to be aware of their position in the spectrum of digital trade to make informed and effective decisions. By basing decisions on evidence, countries can better understand their strengths and weaknesses in digital trade and tailor their policies accordingly.

Governments play a crucial role in creating an enabling environment for digital trade. Specifically, they need to focus on investing in infrastructure development, such as fast and reliable internet connectivity, that supports digital trade. Additionally, the development of domestic payment solutions is essential to facilitate secure and efficient digital transactions. These initiatives will help bridge the gap between developed and developing countries in terms of digital trade capabilities.

To support the participation of least developed and developing countries in digital trade, it is important for development partners to increase their support. Currently, the digital sector represents a very small portion of aid commitments. By increasing investment and providing targeted assistance, development partners can contribute to the growth and inclusivity of digital trade in these countries.

Furthermore, the challenges and magnitude of the issues surrounding digital trade require integrated support from various organizations. Addressing cross-border data governance is crucial, as data is an integral part of digital trade. Countries need to be aware of the larger implications of data governance and its impact on digital trade, as it goes beyond the realms of trade and has implications on privacy, human rights, and global cooperation.

Lastly, it is important to address gender equality in the digital trade sector. While women face double the difficulties in the digital world compared to men, they also have immense opportunities in e-commerce. Mentorship programs and initiatives that support women entrepreneurs in the digital economy can help unlock their potential and contribute to a more inclusive and diverse digital trade landscape.

In conclusion, digital trade holds great promise for developing countries, but there are significant challenges and disparities that need to be addressed. By investing in infrastructure, developing digital skills, updating laws and regulations, and providing targeted support to developing countries, the potential of digital trade can be fully realized. It is crucial for countries and development partners to collaborate and take collective action to ensure that digital trade benefits all economies and contributes to sustainable and inclusive economic growth.

Ralph Ossa

Digital technologies play a significant role in providing opportunities for global markets. They contribute to increased productivity, promote innovation, and enhance resilience to shocks. By leveraging digital tools and platforms, businesses can streamline their operations, improve efficiency, and reach a wider customer base. This ultimately leads to economic growth and the creation of decent work opportunities (SDG 8: Decent Work and Economic Growth). Additionally, digital technologies enable businesses to adapt and thrive, even in challenging circumstances, making them more resilient to shocks such as economic downturns or natural disasters.

However, it is important to note that low-income countries require support to fully benefit from digital technologies. Despite the potential for growth, the contribution of digitally delivered services exports in Africa is less than 1%, highlighting the need for targeted interventions and capacity-building initiatives to bridge the digital divide and unlock the full potential of digital trade (SDG 10: Reduced Inequalities). Similarly, least developed countries only contribute 0.2% to globally exported digitally delivered services. Therefore, efforts must be made to address the structural and technological barriers that hinder these countries from fully participating in digital markets.

The implication of the moratorium on government revenues, which refers to the suspension of taxes on digital trade, is found to be minimal. While concerns are raised about the potential loss of tax revenue, existing estimates suggest that the impact is limited. Alternatives exist for taxing digital trade in a less distortionary manner, and many countries are extending their Value Added Taxes (VATs) or Goods and Services Taxes (GSTs) to include the digital economy. Therefore, discussions around the tax implications of digital trade should focus on finding equitable solutions that balance the needs of governments and the growth potential of digital markets (SDG 17: Partnerships for the Goals).

Policymaking for the digital economy requires a whole-of-government approach and global cooperation. The complexities and cross-cutting nature of digital trade issues demand collaboration across ministries and jurisdictions. By fostering a cooperative environment, countries can effectively address policy challenges, establish common frameworks, and ensure inclusive benefits from digital trade (SDG 17: Partnerships for the Goals).

Regulatory frameworks are crucial for facilitating smooth and fair digital trade transactions. It is essential to ensure that there is easy entry and exit of firms in the digital market, promoting healthy competition and preventing anti-competitive behavior. Concerns about market power and anti-competitive behavior have emerged as digital trade expands. Therefore, it is important to establish and enforce regulatory measures that maintain a level playing field for all participants, while also fostering innovation and growth in the digital economy.

The World Trade Report emphasizes the need to embrace international trade, specifically digital trade, to promote security, inclusiveness, and sustainability. During the COVID-19 pandemic, digital trade acted as a lifeline for many, enabling them to continue working, producing, consuming, and trading. By embracing digital trade, countries can enhance security, as it reduces reliance on traditional supply chains and enables diversification. Furthermore, digital trade presents opportunities for inclusiveness by allowing businesses from diverse backgrounds and regions, such as Africa, to engage in e-commerce. Africa, with its young population and suitable time zones for many services, has immense potential in harnessing digital trade for economic growth and reducing inequalities.

Embracing digital trade also has significant environmental benefits, as it reduces transport emissions and enables more efficient organization of production, consumption, and trade. By leveraging digital technologies, businesses can reduce the cost of trading, providing particular benefits for women-run businesses in regions like Africa. Consequently, digital trade aligns with the goals of responsible consumption and production (SDG 12: Responsible Consumption and Production) and climate action (SDG 13: Climate Action).

Ralph Ossa, a prominent expert in the field, emphasizes the need for a cooperative approach to addressing the challenges of digital trade. While trade liberalization alone is not sufficient, collective efforts, skill upgrading, and improved infrastructures are crucial for fully reaping the benefits of digital trade. Ossa applauds the initiative that aims to reduce trade costs, promote skills upgrading, and increase digitally delivered services. He acknowledges measurement issues and uncertainties regarding the tax implications of the moratorium but advocates for further discussions and follow-up on the issue in a cooperative manner (SDG 17: Partnerships for the Goals).

In conclusion, digital technologies provide immense opportunities for global markets, as they enhance productivity, promote innovation, and improve resilience to shocks. However, support is needed for low-income countries to bridge the digital divide. The implications of the moratorium on government revenues are minimal, and alternative taxation mechanisms exist. Policymaking for the digital economy requires a whole-of-government approach and global cooperation. Regulatory frameworks are essential for smooth digital trade transactions. Embracing international digital trade can promote security, inclusiveness, and sustainability. Africa, with its young population and suitable time zones, has significant potential for digital trade. Embracing digital trade also offers environmental benefits, reducing transport emissions and enabling more efficient production and consumption. A cooperative approach is needed, alongside skill upgrading and infrastructure development. Ralph Ossa advocates for collective work, infrastructure development, and skills enhancement, while also calling for further discussions and follow-up on the issue.

Audience

The analysis provides a comprehensive overview of various topics related to digital trade and taxation, with a particular focus on their impact on developing countries and gender equality. It covers a range of arguments, evidence, and perspectives to shed light on the complexities and implications of these issues.

One of the main arguments highlighted in the analysis is the negative effect of current digital trade rules on governmental regulation. The analysis suggests that these rules may hinder the ability of governments to effectively regulate technologies due to restrictions such as the banning of source code revelation, which can inhibit the regulation of artificial intelligence. This argument points to the need for a careful balance between facilitating digital trade and ensuring effective governance.

In addition, the analysis raises concerns about the disproportionate negative impact of non-discriminatory taxation on women in the context of digital trade. It highlights that VAT (Value Added Tax) has disproportionately negative effects on women due to their consumption patterns and lower income. This argument emphasizes the importance of considering gender-specific impacts when formulating digital trade taxation policies to promote greater equality.

The role of the World Trade Organization (WTO) in advancing the conversation on business and human rights is another important point discussed. Although no specific evidence or arguments are provided regarding this topic, the mention of the WTO suggests that it plays a significant role in shaping the discourse around the intersection of business activities, trade, and human rights.

The analysis also touches upon the transformative potential of emerging technologies such as 3D printing and automated manufacturing in reshaping digital trade. It highlights that these changing technologies enable more manufacturing and services to be done remotely, demonstrating the evolving nature of digital trade and its relationship to technological advancements.

Furthermore, the analysis emphasizes the importance of cross-border data governance and its relevance to global issues such as climate change. It suggests that cross-border data governance is not just a trade issue but also a development issue, as exemplified by the crucial role data sharing played during the COVID-19 pandemic for vaccine development. This argument highlights the need for effective mechanisms for data sharing to tackle global challenges and facilitate cooperation.

Overall, the analysis argues for the need to implement more advantageous policies for developing countries in the context of digital trade and taxation. It recognizes the enormous opportunities for women in the digital world, such as conducting business from home while fulfilling caring duties. However, it also acknowledges the double difficulties faced by women due to the challenges posed by the digital world. These arguments underscore the need for inclusive and gender-responsive approaches to digital trade and taxation.

In conclusion, the analysis provides a nuanced understanding of the various aspects related to digital trade and taxation, ranging from their impact on governmental regulation and gender equality to the role of the WTO and the transformative potential of emerging technologies. It highlights the need for careful consideration and the formulation of policies that address the specific needs and challenges faced by developing countries and women in the digital realm. The analysis underscores the importance of data governance and cooperation to tackle global issues and ensure a fair and equitable digital trade landscape.

Mona Haddad

The World Bank plays a crucial role in supporting developing countries in boosting digital trade. It achieves this through its strong presence at the country level, providing financing and financing instruments, and offering policy advice. The World Bank adopts a comprehensive approach towards digital trade, which includes focusing on improving digital connectivity in these countries.

Improving digital connectivity is essential for enabling digital trade. Many low- and low-middle-income countries are currently lagging behind in terms of digital connectivity. For instance, in Africa, out of 35 countries, only 39 have connection speeds lower than 10 megabits per second. To address this issue, the World Bank has launched the Digital Economy for Africa (DE4A) program, aiming to improve digital connectivity and infrastructure on the continent.

Additionally, it is not enough for developing countries to have access to digital connectivity; they need to adopt and make productive use of digital technology. While 84% of people in sub-Saharan Africa have access to 3G and 4G mobile connectivity, only 22% actually make productive use of the Internet. Similar situations persist in many other developing countries. Therefore, adopting and using digital technology for productive purposes is crucial for enhancing digital trade.

In order for digital trade to thrive, creating an enabling environment is necessary. This includes ensuring affordability, digital literacy, and supportive regulations and institutions. Affordability, especially for businesses, is a major concern. The World Bank is involved in various projects aimed at facilitating digital trade by addressing these concerns. For example, there is a major project in Eastern Africa focused on regional digital connectivity and another project in the Philippines aimed at fostering digital technology.

The World Bank’s efforts in promoting digital trade have shown positive results. Digital trade is rising as a share of exports in lower-income countries, indicating its growing importance in their economies. Furthermore, there is a notable trend in some African countries, where they are leapfrogging from agriculture to services instead of going through traditional manufacturing. This leapfrogging is attributed to various obstacles such as transport, logistics, and infrastructure problems. The World Bank’s support and investment in digital trade can enhance this transition.

However, there are challenges that must be addressed for digital trade to thrive. The regulatory environment needs to be adapted to the unique characteristics of digital businesses. Analogue regulations and policies are no longer fit for this new type of business model. Digital businesses require regulations that recognise e-invoices, e-contracts, e-signatures, e-payments, and e-transactions. Additionally, regulations that deal with possible market dominance by new digital business entrants need to be put in place. Financing considerations also need to be rethought due to the lower collateral and higher risk associated with digital businesses.

While trade offers opportunities for development in developing countries, it is important to acknowledge that the world today has concerns apart from trade liberalisation. Issues such as climate change, human rights, and national security also need to be prioritised and addressed.

In conclusion, the World Bank’s support and investments can significantly contribute to boosting digital trade in developing countries. By focusing on improving digital connectivity, fostering the adoption and productive use of digital technology, and creating an enabling environment, the World Bank can help these countries realise the benefits of digital trade. However, it is crucial to adapt the regulatory environment and address challenges faced by digital businesses. Additionally, it is important to recognise and address other important global concerns alongside trade liberalisation.

Usha Canabady

The future of trade is moving towards a digital landscape, driven by services, green practices, and inclusivity. Global exports of digitally delivered services have tripled since 2005, reaching a value of $3.82 trillion in 2022. This growth is fueled by the digital transformation, which promotes economic growth and employment, while also bringing marginalized communities into the global marketplace.

However, to fully benefit from digital trade, it is important to improve infrastructure, develop skills, and establish supportive policy frameworks. Enhancing digital infrastructure regulations could reduce trade costs in Africa by 20% for goods and 30% for business and professional services.

It is crucial to maintain the WTO’s moratorium against customs duties on electronic transmissions to support the growth of digital trade. The exemption of customs duties on electronic transmissions has facilitated its rapid expansion and innovation.

A forthcoming joint report will provide insights into the current state of digital trade and how policymakers can further strengthen its impact on growth and development.

In summary, the future of trade is digital, with services, green practices, and inclusivity driving its growth. The expansion of digitally delivered services has created economic growth and employment opportunities. However, investment in infrastructure, skills development, and supportive policy frameworks are necessary for fully harnessing the potential of digital trade. Maintaining the moratorium against customs duties on electronic transmissions is essential. The upcoming joint report will offer valuable insights for policymakers.

Michele Ruta

The analysis delves into several topics related to tax policy, digital goods, and digital currencies. One key aspect discussed is the need for tax policies to adapt to the evolving landscape of online commerce. In the past, when physical goods were involved, tariffs could be imposed by customs officials. However, with the shift towards digital goods, a new system is needed to regulate and tax these transactions.

The argument presented in favour of broad-based non-discriminatory taxes, such as value-added taxes (VATs), over tariffs for digital goods, is supported by several reasons. Firstly, tariffs can distort consumption decisions, while VATs are considered to be non-distortionary in nature. Secondly, there is more experience and learning in collecting VATs for digital goods compared to tariffs. Lastly, VATs tend to provide higher revenue collection abilities compared to tariffs.

Another related argument is the use of a moratorium as a commitment device to encourage countries to focus on implementing efficient tax reforms. The idea is that by granting a temporary suspension on specific tax policies, countries can evaluate and steer their reforms towards more efficient and effective systems.

Capacity development and technical assistance are highlighted as crucial elements for assisting developing countries in adopting efficient taxation models. The analysis emphasizes the need to invest in development and technical assistance to support developing countries in their efforts to reform towards more efficient taxation systems.

The significance of digital currencies in international trade is also discussed. Digital currencies are portrayed as the backbone of international trade, capable of improving cross-border payments and filling gaps in trade finance. However, it is noted that their widespread implementation necessitates substantial investment in infrastructure and the establishment of new regulations requiring regulatory cooperation.

While digital currencies offer numerous potential benefits, it is cautioned that their adoption might exacerbate the digital divide in areas lacking adequate internet access and infrastructure. Countries and communities with limited access could be negatively affected by the emphasis on digital currencies, widening the existing inequality.

The analysis suggests that further research is required to fully comprehend the potential benefits and challenges associated with digital currencies. Currently, the understanding of their implications remains incomplete.

In opposition to discriminatory taxes, Michele Ruta argues for efficiency in tax policies, emphasizing that discriminatory taxes are not in the best interest of everyone, including developing countries. The focus should be on implementing efficient tax practices that benefit all.

The negative impact of tariffs on inclusion, particularly for women, is also discussed. A report by the World Bank and the World Trade Organization (WTO) suggests that tariffs do not promote women’s inclusion. Michele Ruta further supports this by stating that while different types of taxes may have varying effects on inclusion, tariffs are not the solution.

To conclude, the analysis highlights the need for tax policies to adapt to the digital age and emphasizes the advantages of broad-based non-discriminatory taxes over tariffs for digital goods. It recommends the use of a moratorium as a commitment device to steer countries towards efficient tax reforms. The importance of capacity development and technical assistance for developing countries to reform their taxation models is also stressed. Furthermore, the significance of digital currencies in international trade is discussed, advocating for investment in infrastructure and regulatory cooperation. However, it is cautioned that the adoption of digital currencies should not further widen the digital divide. Research is still required to fully understand the implications of digital currencies. Finally, arguments against discriminatory taxes and the negative impact of tariffs on inclusion are also presented.

Moderator

The future of trade is set to be digital, inclusive, green, and services-oriented, according to various perspectives discussed. One key point is that global exports of services delivered via computer networks have more than tripled since 2005, indicating the increasing prominence of digital trade. In fact, trade in digitally delivered services was worth $3.82 trillion in 2022, which is equivalent to 12% of all trade in goods and services. This growth in digital trade is seen as positive as it creates new opportunities for international market connection and export-led growth.

However, it is noted that low-income countries face challenges in harnessing digitalisation for inclusive trade and growth. Least Developed Countries (LDCs) contribute only 0.2% to globally exported digitally delivered services, and this number has even decreased since 2010. The barriers to digital trade in developing countries include inadequate infrastructure, lack of high-speed internet, unaffordability, lack of necessary skills, unreliable e-payment systems for cross-border transactions, and outdated or unenforced laws on data protection, privacy, and consumer protection.

Bridging the digital divide and creating a conducive regulatory environment require international cooperation. It is highlighted that 66% of the world population is estimated to be able to connect to the internet, leaving 2.7 billion people offline, many of them in low or lower-middle-income countries. There is a need for international cooperation to manage the global nature of the internet and ensure that the benefits from digital trade are inclusive. The importance of a whole-of-government approach to policymaking for the digital economy is also emphasised.

The World Bank is recognized as being well positioned to support developing countries in boosting digital trade. With its strong country-level presence and engagement, financing instruments, and policy advice, the World Bank can provide comprehensive support to developing countries in overcoming the challenges they face in digital trade.

Furthermore, it is noted that digital trade can contribute to sustainability efforts. Digital technologies cause fewer transport emissions than traditional trade, and they have the potential to improve the efficiency of production, consumption, and trade. This highlights the potential for digital trade to align with sustainable development goals.

Overall, while digital trade presents opportunities for inclusive, sustainable, and services-oriented growth, there are challenges and barriers that need to be addressed. International cooperation, infrastructure development, digital literacy, and a conducive regulatory environment are crucial in ensuring the benefits of digital trade are realized by all. Continued engagement, discussion, and support from organizations are necessary to further advance digital trade and assist developing countries in benefiting from digitalisation.

Usha Canabady:
Good morning, everyone. It’s good to see you here. Ambassador Kanabade, Indomitable Ambassador, colleagues from the other international institutions, excellencies, ladies and gentlemen, I’m really delighted to welcome you to the WTO Public Forum and to this session on our forthcoming publication that we’ve been working on with the World Bank, the OECD, the IMF, and UNCTAD that goes to the heart of the present and future of digital trade. May I pause to say that I’m very proud of the type of collaborations we’ve been having with other international agencies and institutions. This is the way we are meant to work. And I think it’s resulting in very good products. It’s not just in terms of analytical work, but also in terms of actual programs that we are working with them on projects. So thank you all to our colleagues for this. Now, most of you have probably heard me say that the future of trade is digital, it is services, it’s green, and it’s inclusive. Analysis by statisticians show that when it comes to digitally delivered services, the future is already here. Since 2005, global exports of services delivered via computer networks have more than tripled, growing far faster than trading goods and other services. Trade in digitally delivered services, think of things like streaming, entertainment, remote learning, software services, and cloud computing, was worth $3.82 trillion in 2022, equivalent to 12% of all trade in goods and services. This is up from 8% a decade ago. Not only is the digital transformation driving growth and employment, it has also emerged as a powerful new instrument for bringing people and places from the margins to the mainstream of the global marketplace, what we are calling at the WTO re-globalization. And this is a word I want you all to take away with you. It’s the new word. By reducing trade costs, especially for services, digitalization opens up a range of new opportunities for connecting to international markets and thus for making trade and growth more socially inclusive, more diversified, more resilient. And there is evidence that digitalization is particularly useful in enabling small firms and women to trade, amplifying the benefits of inclusion. By reaping the benefits of digital trade, but reaping the benefits of digital trade does not happen automatically. It requires adequate infrastructure and skills and an overall enabling policy framework. And it also demands social policies to help dislocated workers take advantage of new opportunities. Trade and regulatory frameworks matter. WTO research finds that coupling digital infrastructure improvement with better regulations could reduce trade costs in Africa by up to 20% for goods and 30% for business and professional services. Trade cost reductions on this scale would mean considerably more opportunities for African business of all sizes to join regional and global markets. That’s why it’s very positive that a group of nearly 90 of our members have made substantial headway in negotiations here at the WTO to set out some basic shared rules for digital trade. These negotiations complement initiatives on services domestic regulation. and investment facilitation, as well as discussions under the e-commerce work programme ably led by our Chair today, Ambassador Usha Dakwa Kanabadi of Mauritius. It is also why the WTO Secretariat is partnering with the World Bank to help interested African countries close gaps in connectivity and regulatory infrastructure. All five international organisations represented here have roles to play in empowering our members to harness the full potential of digital trade for growth and job creation. As part of our efforts in this regard, we will, in November, release a joint report that leverages our respective expertise to shed light on where things stand with digital trade and what policymakers can do to make it an even stronger force for growth and development. It will yield new insights on how digital trade can contribute to development and how members can work together to reap the full benefits of such trade and build a more resilient and inclusive global trading system. The report will be timely, coming out soon before our 13th Ministerial Conference in Abu Dhabi next February, where Ministers face important decisions for digital trade, notably the future of WTO’s long-standing moratorium against customs duties on electronic transmissions. Even before the MC12 decision to extend the moratorium and reinvigorate the work programme on electronic commerce, many members were asking for more facts, evidence and analysis about the moratorium’s impact on digital trade. Members’ views about the moratorium differ, but making informed consensus decisions requires a shared set of facts on the table. And this is precisely why we thought a joint report to set these facts out by objective international agencies. would be helpful, a report that is evidence-based, independent, and balanced. The WTO’s Chief Economist, Ralph Orser, will offer a preview of the contents in a minute, but let me first highlight one aspect of it. The report documents on the basis of the evidence available how the moratorium is working in practice. The rapid growth in digital trade I referred to earlier has happened under a regime of no customs duties on electronic transmissions. The forthcoming report will help us better understand the legitimate concerns some members have expressed about the moratorium, identifying issues such as a lack of clarity regarding its definition and scope, as well as losses of policy space and tariff revenue as formerly physical products become digital. Importantly, the report will help members understand the opportunity cost of the moratorium so that members can assess the various trade-offs. Let me conclude by congratulating the teams from the IMF, OECD, UNCTAD, the World Bank, and the WTO who have been working hard on the report and on this event. Let me also thank Ambassador Kanabadi for relentlessly working on this issue and gaining the confidence of members. Please stay tuned. The report will come out in November and will hopefully help members to take decisive action at MC13. Thank you.

Moderator:
DG, thank you very much for being with us this morning. What was the key word that you said was important for us? Re-globalization. Please remember that one. And I just want to add one more word to this, DG, from the perspective of facilitator. DG-globalization. DG-globalization. Which both refers to you and also to digital. So you can lead the globalization for us as well. Well, thank you again for this very interesting introductory remarks. We all stay tuned for the report in November, but we’re going to start this morning with Mr. Ralph Ossa, who is the WTO’s Chief Economist and also Director of Research and Statistics Division as well. Maybe Ralph, can you share with us the main findings of this report? You can use a lectern or here, whatever is easier. Thank you.

Ralph Ossa:
Thank you very much, Ambassador. Thank you very much, Director General. I still have to get used to these kind of speeches, so first of all, there’s a hammer here that I never know what to do with. And also, in my previous life, I was a professor, so I could speak for myself, I could speak freely. Now, I’m at the WTO. I have learned how to speak also for the WTO on behalf of the WTO, but now we have five international organizations, so for me, this is a new opportunity to also speak on behalf of five international organizations, and some of you who know me know that I sometimes improvise and speak freely and do these things, and I won’t do that today, so I stick to the script and present the findings of the report. First of all, let me thank you all, in particular our colleagues from the IMF, the OECD, UNCTAD, the World Bank, and of course also my team here at the WTO for putting together this, I think, really important report. And it’s an important report because it’s on a really important topic that clearly affects us all, and if you just think about it, you’ll see very clearly that digital transformation is of course having profound effects. For example, digital technologies clearly provide new opportunities to engage in global markets. and promote inclusive growth. But at the same time, you know, harnessing digitalization for inclusive trade and growth also raises important challenges, of course, particularly for low-income countries. But what’s clear is that international cooperation is needed to help bridge the digital divide and put in place an enabling regulatory and policy environment. And you know, the DG mentioned this in our opening remarks, but that’s why we came together here as international organizations to inform discussions on these issues, these very important issues, and provide an evidence-based kind of foundation to them. Let me start by talking about some of the opportunities that digital technologies provide. First of all, digital technologies can act as an important engine of growth, increasing productivity by reducing production costs, fostering economies of scale, and also offering more efficient financing. Also, they can promote innovation by exchanging ideas in some way. You know, we are doing this now, or at least with the ones who are watching this online. Interestingly, digital technologies can also underpin the growth of all trade, and not just digital trade, by reducing trade costs also in areas that are not perhaps directly affected by digitalization. And it can also promote new services, export-led growth, and more inclusive growth. As we have seen during the COVID pandemic, it can also promote more resilience to shocks. You know, we saw this during COVID, how important this type of digital communication interaction became. But of course, at the same time, it’s also disrupting existing processes. and business models, thereby not only creating opportunities, but also creating risks. So let me provide some context here for you. First of all, what is digital trade? Digital trade refers to all international trade digitally ordered and or digitally delivered, a pretty intuitive definition that is widely agreed upon. And while it’s possible or easy to define digital trade, measuring it is of course much more challenging, so the data on the size of digital trade is incomplete. But what we know or what we estimate is that digitally delivered services exports are estimated to be 12% of all goods and services exports of the world. And perhaps more strikingly or more importantly, that they have grown very quickly over the past years, since 2005, outpacing the growth rate of goods trade, and also services trades are growing at a rate of 8.1%. Now, you know, when you think about the component of digital trade that is about digitally ordered trade and not delivered trade, so there we know much less. So as you can imagine, some countries are more ready than others to take advantage of the opportunities of digital trade. Services exports have been growing in most developing economies, but some developing economies and also some developing economies in Africa, such as Ghana, such as Morocco, such as South Africa, have been strong performers and still are in digitally delivered services. At the same time, Africa’s contribution to globally exported digitally delivered services is still very small, at the moment less than 1%, while least developed countries contribute only 0.2%. So as a result, clearly support is needed to ensure a more inclusive digital trade. And you know, what you need to do that, so what you need to, you know, promote digital trade is a whole ecosystem, and in some sense that’s, you know, one of the main points of this report that we are working on. So you really need a kind of a multi-pronged approach to stimulate digital trade. And the first thing you need, quite intuitively, is reliable and affordable digital infrastructure, but also the skills that you need to leverage this infrastructure. So just to give you some facts, at the moment around 66% of the world population are estimated to be able to connect to the Internet, which is twice as many people as 10 years ago, but at the same time, you know, still leaves 2.7 billion people offline, and as you can imagine, most of them live in low or lower middle income countries. High tariffs on the imports of information and communication technologies, restrictions on imports of enabling services, so for example, if you think about telecommunication services, could also limit the affordability and also slow the adoption of digital technologies. And there’s already international cooperation ongoing that’s helping to improve digital connectivity skills, capabilities, and so on. Also from the international organizations represented here, we have the Aid for Trade program coordinated by the WTO, E-Trade coordinated by UNCTAD. and also the digital advisory and trade. Digital advisory and trade, I forget what the last A stands for. Anyways, it’s about promoting also this kind of work. But good infrastructure is of course not enough. We also need to put the right regulatory environment in place. You need to have the right policies in place. And clearly digital trade requires a set of policies and regulations that allow for smooth cross-border transactions that would enhance trust in digital markets and also promote affordable access and enable cross-border deliveries. When thinking about these regulatory policies, it’s important to ensure easy entry and exit of firms and also an open trade regime so that this is all functioning well, leveraging competitiveness. And what’s really interesting is that we talk about some estimates or we are preparing some estimates in the report that point to interesting or important complementarities, in particular that the trade cost reducing effect of improved connectivity is more than double in middle and low-income countries with an enabling regulatory environment in place, which points to the fact that you really need both to successfully pull this off. So I’ve already alluded to it. There’s already important progress in that direction that has been made, important international cooperation that is taking place. One thing to know is that the governance of digital trade-related issues so far has primarily taken place in bilateral and regional trade agreements, and you see kind of a similar pattern emerging from what I was talking about before. You know, 33% of all regional trade agreements have explicit provisions related to digital trade, but few low-income countries have signed regional trade agreements with such provisions, so a similar theme emerges to what I was discussing before. We have the WTO Work Program on e-commerce since 1998, which has allowed consideration of how WTO rules apply to e-commerce, and DG mentioned that our members are also negotiating new rules on digital trade-related aspects under the Joint Statement Initiative. Now one issue that is, of course, important in the WTO context and that is attracting a lot of attention in the lead-up to MC-13 is the issue of the moratorium. The DG already alluded to it in her introductory remarks, and she already pointed out that WTO members’ views about the renewal of this moratorium and customs duties on electronic transmissions differ, and a key consideration in that discussion is the impact of the moratorium on government revenues. This is also a topic that this report tackles, as the DG was saying, just providing, you know, the facts, providing some evidence-based… for our members to be able to make their decision. You know, maybe, you know, one thing to say before I share some of the estimates with you is that there are some uncertainties, or maybe, let me say more broadly, that the impact of the moratorium on government revenues depends on several factors, and therefore, you know, there’s also some challenges in terms of kind of estimating this impact. For example, there’s uncertainties about the scope of the moratorium, also about the definition of electronic transmissions, which, of course, then, you know, mean, you know, that there’s also some uncertainty about the tax base that we have. So it is difficult to fully grasp the impact of the moratorium, but existing estimates point to the moratorium as having kind of a limited effect on government revenues. So the estimates that we have is that the potential revenue that could be collected using tariffs on electronic transmissions vary between 0.01% and 0.33% of overall government revenues on average with a handful of outliers. And one thing to know is that these estimates don’t even take into account that the administrative costs that are associated with raising this revenue. So the evidence, so far at least, with all its caveats seem to suggest that the revenue implications are not substantial. Also, what is important is that, you know, there’s alternative ways of taxing digital trade in a less distortionary manner, in particular, nondiscriminatory taxation. We think about a VAT or a GST, as it’s sometimes called. And so the terminology differs a little bit across countries. And there’s many countries, of course, that have these VATs or GSTs in place. And many of them either already have or are in the process of kind of extending it also to the digital economy. Also, new regulatory issues have emerged with digital trade that require global solutions and therefore also global cooperation. We have measures that affect data flows that are risking, you know, that are increasing the risk that regulatory, increasing the risk of regulatory fragmentation off regulatory fragmentation without necessarily providing the necessary interoperability. We have network effects and economies of scale and scope that give rise to concerns about market power and anti-competitive behavior. I mean, that’s a broader concern, I think, with the digital revolution that’s not limited to digital trade. And then also we have a divergent consumer protection regulations and also enforcement that can hinder consumer trust in the digital economy. So in conclusion, let me just say that policymaking for the digital economy requires a whole-of-government approach as issues cut across ministries. I think this is a point that the report makes very clear. Also, global cooperation is essential so that the benefits from digital trade are not only realized, but also realized in a way that makes them inclusive. And this report, at least from our perspective, is a contribution to that cooperation. So, thank you very much.

Moderator:
Thank you very much. I think you have summed up a number of issues that we will be seeing in the report in November and we look forward to that. But now my role is to turn to the other organisations who contributed to this report and to hear from them what their perspective is. I first turn to the World Bank. Mona Haddad is the Global Director for Trade, Investment and Competitiveness of the World Bank. Mona, World Bank is one of the big actors in development financing for countries who want to accelerate their digital trade. Can you share with us some of the things you have been doing and what you think we could be doing more? Thank you.

Mona Haddad:
Thank you very much Madam Ambassador and thank you Ngozi for spearheading all these efforts and bringing us all together to make sure that each organisation is really putting forward its comparative advantage towards this important goal of not only maintaining the multilateral trading system and strengthening it, but more specifically to this forum, to this topic is to really boost digital trade. So, the World Bank Group is really well positioned to support developing countries in boosting digital trade because of our strong presence at the country level and strong country engagement. Second, because of our financing and financing instrument. And third, because of our policy advice through analytics and country experience. And our approach to digital trade is really to be comprehensive because to succeed digital trade has many different components which I will talk about and we need to put them all together to make it happen. So, first is digital connectivity. without having the physical infrastructure of digital connectivity. It’s very hard to talk about digital trade. And we see that in many countries, low- and low-middle-income countries, they are lagging behind in the digital connectivity. In Africa, out of 35 countries, only 39 have connection speeds lower than 10 megabytes per second, which is considered the minimum necessary for consumers to fully participate in digital activity. So, back to basics, we need to have that in place. And for that, the World Bank launched in 2020 an initiative called the Digital Economy for Africa, DE4A program, which provides technical assistance as well as lending to ensure that digital connectivity is available, including in lagging regions. But we know that connectivity alone is not enough. It’s a necessary but not sufficient condition. So, adopting and using digital technology for productive purposes is really what is important to get economic gain. So, we are also focusing on that. For example, we have a study that shows that 84% of people in sub-Saharan Africa have access to 3G and 4G mobile connectivity, but only 22% actually make productive use of the Internet. And we see similar numbers actually elsewhere in developing countries. So, that was just an example. So, for us, working on providing the right enabling environment for digital trade and digital business to happen, is very important, and this includes affordability. So sometimes there is access, but it’s very expensive. So affordability is important, especially for business. Digital literacy is important, not only for consumers and producers, but also for governments. And three, the enabling environment in terms of regulations and institutions to better manage new areas such as e-commerce, digital payments, cross-border data. Just to give you a couple of examples, we have a big project in Eastern Africa on regional digital connectivity, and it focuses on first, expanding the digital infrastructure, including the last mile, and second, improving the conditions for digital trade by enabling the cross-border electronic payments, facilitating regional data flows, and fostering convergent approaches on digital platform regulations, e-signatures, and so on. In the Philippines, we also have a new project on fostering digital technology. The Philippines, of course, is doing already quite well in services export and export of digital services, but it can do a lot better. And the key problem there is cost and affordability. The cost, there is good access to the internet, but the cost is very high. So our numbers or studies show that only 10% of the Philippines’ medium and small enterprises actually are using digitalization productively in their business. And the project that we have focuses on providing the regulatory environment. to increase the uptake of e-commerce by consumers and producers, having competition in digital services, and increasing value addition, as well as skills development. Let me stop here. Thank you.

Moderator:
Thank you very much, Mona. I think that was useful in setting the role of the World Bank in the issue of digital trade. I next turn to the OECD and Deputy Secretary General Ulrich Nielsen. Now, the OECD has been working for a long time on the digital agenda and how it connects to digital trade. Would you want to share with us what perspectives you bring in this report and what you think the OECD could also, like the World Bank, be doing more? Thank you.

Ulrik Knudsen:
Sure. Thank you, Moderator. But let me start by really thanking Ralph for not having improvised on behalf of the OECD. I will then also be humble and try to stick to my script, except for one thing, maybe. I would also like to embrace and recognize the concept of re-globalization. I mean, if nothing else comes out of this conference, if we can move the mindset from one of de-globalization to one of re-globalization, I think we’ve come a long way. Let me give a little bit more thought to de-globalization and take it back to Member States, but maybe we could also consider that for the November report. Thank you so much, Director General Ngozi and the WTO Secretariat, for having led and coordinated our joint efforts in this endeavor. I think speaking with one voice on digital trade and development has never been more important, and it’s a very, very strong sign that we have these five international organizations here on stage doing exactly that speaking with one voice. So thank you for your leadership. Turning to some of the OECD contributions to this, I’d like to highlight three points that I think are really crucial to these discussions. The first one is the importance of digitalization of inclusive outcomes, and I mean that in several ways, whether it’s smaller firms, whether it’s women-owned enterprises or even people like us. Digitalization can bring us closer together, both socially and economically. Digitalization does enable really substantial new benefits from trade. Our work suggests that a 1% increase in digital connectivity can lead to 1.5% increases in trade. I think that’s quite formidable. It also shows that benefits arise for countries at all levels of development and across all sectors of the economy, including, in fact, agriculture. My second point is that making the most of these opportunities is not straightforward. It’s well reflected in the report. A range of policies and investments, more often than not spanning many different ministries, are actually needed to ensure benefits for all. Of course, we need open markets. That goes without saying. We need to enable access to goods and services. But we also need more education. We need more digital connectivity. And we need also renewed efforts to tackle issues around data governance. Now I’m speaking probably only on behalf of the OECD when I say that when it comes to the moratorium on applying customs duties on electronic transmissions, we also need to consider who pays the costs of tariffs and what are the alternative sources of tax revenue. But let me be frank and say that at the OECD, our work suggests that there is a pretty strong case for renewing the moratorium at MC13. My third and last point is that while the Internet is truly global, our regulations are not global, so we need more international cooperation. The OECD Digital Services Trade Restrictiveness Index shows that, despite evidence of positive reforms, not least on the African continent, restrictions on digital trade are actually on the rise. At the same time, however, our digital trade inventory shows renewed interest in building regulatory bridges and common approaches on digital trade issues. This is happening here at the WTO, but also in digital trade provisions, in trade agreements and in emerging digital economy agreements. So let me perhaps end by saying that I think discussions like the one we are having here today can help move the digital trade agenda in a more inclusive way, again, in many dimensions. And I think the IOs working together, we collectively hope that our analysis will help policymakers build a better world where digital trade can really work for all. Perhaps a digital trade agenda could even bring us closer to re-globalization.

Moderator:
Thank you very much. Thank you also for being brief. It will allow us time for questions from the floor as well. I will next turn to the IMF. Michel Gauthier is the Deputy Director of Strategy and Policy Review, if that’s right. Now we know that the IMF released last week, was it, a study on tax policy for digitally traded products. And I was wondering whether you could enlighten us a little bit about what you want to share with us on that report.

Michele Ruta:
Thank you very much. So also from the front point of view, it’s excellent to be here. It’s excellent to be working together on this topic. Let me say I’m a former WTO staff member, so I’m always happy to be back and always a bit intimidated to be on this side, because generally I will sit on the other side. And the last thing that just hit me is that Ralph and I shared a podium, I think 15 years ago, when Patrick and I traveled to Rome to give the first CESI award, so it’s really nice. And it also shows that time is passing fast. So let me say something about the work that we have been doing at the Fund that was published just last week. And this is really a contribution to the debate. It’s not an official view of the Fund, it’s really a research piece. There are several studies out there that have been done on the issue of the moratorium, looking specifically at the fiscal cost of the moratorium. And this is an important topic, because as we know, several developing countries rely on tariff revenue for their fiscal capacity. Now one issue that seems to be lost somehow in this discussion is that it’s really technology that has changed. So the book that used to pass at custom, where the custom official would impose a tariff, now moves online. And so that’s really the problem. And so what this suggests is that countries that want to regain that tariff revenue, they need to create a new system. And in order to create a new system, they need to upgrade their tax infrastructure. And this begs the question, how to optimally do that? And that’s the space that we are looking at. And specifically, the question that we ask is, if we need to upgrade the system in order to collect these revenues, should we do it through broad-based, non-discriminatory taxes, such as value-added taxes, or should we do it through tariffs? And the findings, the main findings that we have is that a non-discriminatory tax system, so one that, for instance, could be based on value-added taxes, is preferable for two main reasons. One that is on efficiency grounds, and the second one is in terms of revenue. So let me just briefly say something about these two points. Based on efficiency, there are two simple arguments why broad-based, non-discriminatory taxes are preferable. First is because tariffs discriminate, and by discriminate, they create some extra cost. They distort consumption decisions, they distort production decisions. So the same revenue is collected through distortionary means, which means higher cost. Second, the argument that is generally used in favor of tariffs, the practical argument, is that they’re easy to collect. So if customs are already in place… case, the book goes through custom, is taxed at the border. It’s easy. Now, if you think about electronic transmission, it’s exactly the opposite. Because there is no experience worldwide with these tariffs on electronic transmissions, while there is lots of experience on things like value-added taxes, because virtually all countries do that. So there is much more experience and learning in that sphere, so that the usual argument for tariffs is lost. Now, let me move to the revenue side. Here on the revenue side, we provided some calculations of the effects. And the question is simply, what is the maximal revenue that can be collected using VATs or using tariffs? And what we find is that through VATs, the revenue that can be collected is 150 times higher than with tariffs. Now, this, to be fair, is mostly due to advanced economies, because advanced economies have very low tariffs, and they also are the ones that trade most in digital products. But if we look at developing economies, most developing economies are either better off, meaning they collect more revenue through non-discriminatory taxes, than they do through tariffs, or they are about the same. So the argument of revenue collection is really not an argument there. Now, let me say just a final word on where this leads us on the moratorium. Now, if you see the moratorium from the optimal taxation argument that I was using, then the moratorium is what economists would call a commitment device. That’s just a fancy way to say that it’s a tool that allows countries to focus reforms, or steer reforms, towards efficiency. Now, the big question there is that, obviously, doing these reforms is costly, and so there is a need to invest more in terms of development, capacity development, and technical assistance to allow developing countries to reform. towards efficiency. So let me stop here. Thanks.

Moderator:
Thank you. And I’m sure we’ll have lots of questions. It remains, of course, a sovereign right of countries to decide the kind of taxation policy they want to apply. But I’m sure there will be loads of questions on that. I turn to UNCTAD. Now, UNCTAD, I don’t know whether Sharmani needs an introduction, because she’s been known to everybody in this room. But can I ask you, Sharmani, UNCTAD has been doing work for a very, very long time for developing countries. What you do is not always known. And I’m a little bit surprised at that, because we at developing countries, we know what you’re doing. And we’re not able always to connect it to what is happening in the other institutions. And now, we’re very glad to see that not only you’re part of this report, but also that you’re working more actively with a lot of countries to be able to bring your views to the table as well and share it. What can you tell us about UNCTAD’s role in assisting developing countries? Thank you.

Shamika Sirimanne:
Thank you, Ambassador. So we understand that the digital trade holds a lot of promise. The internet basically can give businesses a virtual shop window to the entire world. That’s the potential. So our businesses, UNCTAD, how do we develop countries’ capabilities so that they can engage in this fast-moving and amazingly potential for the developing countries emerging? But to put this into context, I want to start with some numbers on digitally deliverable services we at UNCTAD just issued. So it is just hot out of the press. But I want to start with a caveat. You see, the problem is, I think we will discuss this a bit later when we talk about digital trade and what it means and all that. The statistics on digital trade is pretty bad. It’s chaos. And even when the countries have a bit of it, it’s very bad quality. And this is why the brand new, how can I say, Let me put a plug here, we have a brand-new IMF OECD UNCTAD WTO handbook on measuring digital trade, and this is important because this is the elephant in the room. If you don’t know what it is, you know, and how are you going to make any policies based on nothing. So that’s the situation right now. But nonetheless, you know, we have the information, we have available points to a very interesting story I want to take you through this. Digitally deliverable services account for 55% of global services exports today, and this is one of the fastest growing areas of trade. Since 2010, the exports of digitally deliverable services have more than doubled, so that’s how it’s going, you know, that’s how it’s becoming big. And this trade is highly unequal. Now, 76% of global export of digitally deliverable services are from developed countries, okay, and only 24% comes from developing countries, and this also includes China and other big economies. And here is the shocker, LDCs share is a mere 0.2%, and it’s really shocking and it has actually decreased since 2010. So that’s the reality. I think we need to understand the reality before we jump into it. So Ambassador, why is it so pathetic and bad? I think Mona, you started to talk about the connectivity, so let me put a bit. You see, business needs access to networks and devices that are fast enough to engage in digital trends, so basically it’s like a 4G network. You need that. It’s not just, you know, typing some text in your sister and brother, but if you want to engage in. digital trade, especially cross-border, you need fast internet. Almost all LDCs are covered by mobile networks. Less than half have access to faster 4G networks. That can really support digital trade. So this is our situation. And Mona, you mentioned the connectivity, simply unaffordable in many countries. We just take it for granted. And women entrepreneurs that have an enormous amount of potential in the digital economy, it’s difficult for them to break into this. Another layer is the skills. We are not talking about the skills of typing onto, I don’t know, this WhatsAppping onto a smartphone and posting on Facebook. It’s not that skill. We need a lot more skills to do engaging trade. You need to develop your platform. You need some coding. You need to understand the security. So these skills are lacking. This is what we find. We have worked in 50 countries, understanding the constraints for e-commerce and the digital economy is coming very clearly. And these skills cannot be developed within two days. This is a long haul story. You have to be with the countries, working with the countries to develop skills. Now, very few countries have reliable e-payment systems to engage in cross-border transactions. I was in a landlocked country a couple of months ago. The minister told me that they used to have PayPal. And the PayPal decided it’s not worth it, and it’s too small. So they backed off. So they don’t have an international payment platform. And the big elephant, I don’t know why I’m talking about elephants today, but the big elephant is the regulatory environment that puts online transaction on a firm legal footing, gives clear protection for buyers and sellers, and has provisions to safeguard privacy and against cybersecurity. Because honestly, I’m not going to put my credit card. on some funny platform. I mean, I’ll tell you right now. Now, less than half of LDCs, OK, less than half of least developed countries and SIDs have adopted data protection, privacy, and consumer protection legislation. And we work with many countries. My colleagues are here to update the laws. And they are so outdated. And they are not enforced. Enforcement is sorely lacking. OK, so this is our experience. So Ambassador, you asked me, how do I assess the opportunities for developing countries? And it’s pretty dismal for the LDCs and SIDs. I am not talking about international trade. This is where the digital exports, digitally deliverable exports, because this is the lucrative trade. I’m not talking about offering a yoga class to your neighbor through the internet, or running around and delivering food in town. It’s not that. How do we get into the export markets? Because this is where the profits are. And they cannot do it. And LDCs are out of it. So I just want to put into context, as you take forward your negotiations to understand, the problems in the least developed countries, and SIDs especially, are immense. And this is a technology that moves so fast. And the window of opportunity open to developing countries is very limited. Windows close, and that’s it. So let me, I know this is a sad note, but let me stop here on this sad note.

Moderator:
I know, I’m glad I don’t have tissues. But I mean, thanks, Shamika. And I was just thinking, you know, you’ve just been pointing again to what Dr. Kurzweil has been saying, about our developing two worlds. And that’s the reality of it. DG, I know there’s pressure right behind you, trying to take you out of this room. Before you go, I was wondering whether you would add a few comments on what you’ve heard so far. WTO launched its World Trade Report this week, and I was going to ask Ralph later to give us. some findings about that, but is there anything you would like to add or comment on in the light of what you’ve heard?

Shamika Sirimanne:
No, it’s just I’m so glad I have to run, but I was so glad to stay and hear the different perspectives because this is what I want to say so we are now getting facts. I think a lot of our debates and negotiations have not really been evidence-based, and you cannot make the right decision for your country until you know what evidence there is. Are you really getting revenues from this? So if you’re not even part of it, why are you arguing against it? Are you getting a lot of revenues? And if you’re losing, then what can we do about it? So this will enable members to see where they are in this spectrum. Some emerging markets and developing countries are in it, not very much, but they’re still, how do we take account of their issues about they don’t want to see loss? And if they have prospects for greater participation in digital, we should think ahead also, not only static, but dynamic. How do we take account of their issues? But, you know, so my point is evidence-based is very important. So let’s look at what we’ve heard a lot of it here. It’s very enlightening. What I want to end up saying is that I see a big opportunity. Where you’re sad, Shamika, that we are not so present, my mind is going, what do we need to do to get us into the game? And then how do we make sure we have the regulatory framework, the infrastructure, the human resources to participate? So for me, I’m always on the other side. I see a big opportunity for LDCs and developing countries to take advantage of a fast-growing segment. trade, and we need to focus our minds on how we help them do it. Thank you.

Moderator:
Thank you very much, teacher. That was very useful. And thank you for being with us today. Thanks. Just before I open the floor, I want to turn once again to Ralph, and I will pose the second question to all of you. What are the challenges that are awaiting us? What can your organization do? What do you think we could be doing more? I know I come back to the same question, but in practical terms, what is it we could be doing more? But just before that, Ralph, can you just very briefly tell us a little bit about the World Trade Report launched this week? Thank you.

Ralph Ossa:
Thank you very much for the question, and I’ll be very brief because I already spent half of Tuesday explaining the World Trade Report to people at this public forum. But perhaps I can say how it relates to this issue that we are discussing today, the issue of digital trade. So the main point that the World Trade Report is making is that we need to embrace international trade if we want to make the world more secure, if we want to make the world more inclusive, and if we want to make the world more sustainable, contrary to some of the narratives that are emerging at the moment. And a point the report is also making is that embracing digital trade, in particular digitally delivered services, is particularly important in that regard. So let me maybe just briefly comment on how embracing digital trade can deliver on these three dimensions. Let’s start with security, and I already mentioned that in the presentation. And when I say security, I mean resilience, supply chain security, economic security. This angle, and we’ve seen it during the pandemic, how important digital trade was. If you remember this chart that I showed you, digital trade did not tank during the pandemic. In fact, it was the lifeline for many of us. in terms of how we worked, in terms of how we produced, consumed, traded, and so on. So I think that should be relatively clear. If we talk about inclusiveness, the same thing. And I really hear both sides, and I think they’re both correct, that where we are at the moment in terms of LDC participation in digital trade is not where we want to be. Where we are in terms of even just Africa’s participation, I don’t recall if you mentioned that statistic, but it’s also less than 1% of digitally delivered exports come from Africa. And the infrastructure issue, the connectivity issue, and so on. At the same time, I’m also with the DG, and that’s also what we emphasized in the report, that there’s a lot of opportunities, in particular for regions like Africa. If you think about the fact that the very young population are in the right time zone for many of these services, and so on. So I also want to kind of focus on the positive aspect. And one just interesting statistic that we highlight in the report, it’s one of many, but it’s kind of one that’s stuck in my head. There’s a study that shows that three out of four businesses in Africa that are exclusively engaged in e-commerce are owned by women, are run by women, which suggests that if you reduce the cost of trading in that space, that is likely to have a disproportionate effect on them. That’s just one example. And just an anecdote, of course, I don’t want to push it too hard, but I do think there are these opportunities. And then finally on sustainability, so remember the report makes these three points, security, inclusiveness, sustainability. I mean, sustainability, one part is obvious. Digital trade doesn’t cause any transport emissions, or at least not any meaningful transport emissions. Perhaps a little bit of… energy that is needed. So kind of moving in that direction, as Michele said, the e-book is probably better for the environment than the actual book. But it’s really much more than that. Of course, digital technologies can also help us organize our production, our consumption, our trade in more efficient terms. So I think they’re also big opportunities. Thank you.

Moderator:
Thank you, Ralf. I’m just so sorry that we have such little time for the panel, because there are loads of questions waiting there. Mona, you are doing an initiative with the World Bank, with the WTO right now. Can I ask you this very blunt question? Is this a good confidence initiative, or is it likely to have a real impact on Africa? This is about advancing digital trade in Africa. Thank you.

Mona Haddad:
Thank you very much. So let me be a little bit more optimistic than Shamika as well. You presented, Shamika, numbers that show that the LDCs or lower-income countries are participating less in digital trade globally. But if we look at it differently and look at how much digital trade is rising as a share of their own exports, it’s actually less insignificant. And that’s really what matters. So I don’t want to compare Mauritius to the EU. I want to compare Mauritius today to what Mauritius was doing maybe 10 years ago, and the progress is very positive. So that’s one point. The second point is that in Africa more particularly, many countries will not be able to kind of industrialize and become competitive in manufacturing, either because they’re small, such as Mauritius or Rwanda and so on, or because there are so many other problems, such as transport, logistics, infrastructure, and so on, that it might be easier for them to leapfrog from agriculture to services than necessarily to go through manufacturing. manufacturing, and we are seeing that in some of the African countries, and therefore again digital business and digital trade is a great opportunity for them. So I just wanted to put forward at least two arguments that are slightly more positive. On this data initiative, which actually we have created a data fund with Australia and Switzerland, and we are working on what we think really matters right now, which is digital policies, and putting the regulatory enabling environment for these new types of businesses because the analog regulations and policies are no longer fit for purpose for this new type of business model, which is a digital business model. We need regulations that recognize e-invoices, e-contracts, e-signatures, e-payments, e-transactions, and so on. We need regulations that deal with possible market dominance by new entrants into this new digital business. We need to think differently even about financing of such businesses because they have very small collateral and higher risk. So a lot of complementary regulations and regulatory systems need to be put in place, and that’s what we are focusing on. Thank you.

Moderator:
Thank you, Mauritius. I know that country. The 17th in the world for cyber security, so don’t fall with them. I turn to OECD. Now, you’re the guys who have a lot of influence on the digital agenda. What according to you is going to be the biggest challenge in the years to come on this?

Ulrik Knudsen:
That’s a pretty hard question, right? I was just thinking, taking the train here yesterday, that one year ago when we had the last WTO public forum. Nobody in this room probably knew about generative AI. We hadn’t seen chat GPT-4 yet, right? That’s 10 months ago, and maybe some of us even hadn’t heard about it eight months ago. Now, it’s up there as one of the big transformative sources of our societies alongside pandemics, climate change, de- or re-globalization or de-de-globalization, whatever, and everyone is talking about it. So I think it’s difficult to predict, but if I had to point to one thing, I’d say, now my biggest worry is digital fragmentation and digital divides. I think for a while, at least, globalization was given a bad name because the benefits that all of us would, all of us would subscribe to the fact that there are benefits from globalization, but they were not evenly distributed, and that gave globalization a bad name in some parts of the memberships of the organization on stage here today. My worry is that this will happen to digitalization as well. If we don’t get the digital transformation right, if we don’t get the benefits distributed, and it’s about not only connectivity, it’s also about access and skills, I think we will give digital transformation a bad name. So there’s a lot at stake here because if the globalization engine for the world economy is not turned back on, we will have to rely on digital transformation to increase productivity, to enable, you know, people across the world to grab the opportunities of the digital transformation. So that is what we need to get right. That is why this nexus between trade and digital is so important, and if we get this discussion right, if we get digital trade and development right, we may give both digital transformation and globalization a good name again. So I think there’s a lot at stake here.

Moderator:
No, thank you. That’s good for thought, I think. And Michel, turning to you, what about digital currencies? How do you see their role in digital trade in the years to come?

Michele Ruta:
No, thanks. That’s an area that we at the Fund have been trying to push the other international organizations to try to discuss in this report. Because I think it’s a fascinating area, but it’s an area where we don’t know enough. Now, the payment systems, and obviously currencies are at the core of payment systems, are somehow the backbone of international trade. It’s something that I, you know, when I was working here at the WTO, I didn’t realize that moving to the fund, it came out more clearly to me. And so digital currencies have a lot of potential. This potential comes from the fact that essentially they can make cross-border payments more efficient, and second, that they can reduce some gaps that are in trade finance. So they have potentially a very large role. At the same time, and I think this is in line with what we have heard in other areas, there are important challenges. So let me just highlight two. So one is just as anything that has to do with digital, there is a need for investment in infrastructure, and especially in regulatory, in new laws. And this requires regulatory cooperation. The second element is that digital currencies, in addition to the benefit that they can bring, can also bring more exclusion. And this relates to the broader argument of digital divide. So if they become more prominent, it’s obviously difficult for those countries or those communities that don’t have access to internet, don’t have access to good infrastructure, don’t have the means to join the system, it’s more likely that they could be left out. So it’s another challenge that needs to be taken out. It’s in line with everything else that we’ve been discussing so far this morning. Thank you very much.

Moderator:
And turning to you, Samika, your last question, because there’s such a big divide. So how do you make digital trade more inclusive?

Shamika Sirimanne:
Okay, this is the another elephant in the room. Okay. I mean, as Ulrich, you said this is a digital transformation is so important. This is the technological revolution of our time. And we cannot let countries and the continents to be left behind. It’s not right. So how do we make it inclusive? I mean, let me give you three points. The governments need to do a lot more to develop the enabling environment. That is a must. And part of the reason governments cannot do much is because they don’t know what it is that they’re supposed to, because there’s no data. So again, can I put this out? Handbook on measuring digital trade, unless you have data, it’s very difficult for you to convince your finance minister to put some large sums of money into projects. So it’s important. And we, because we do this ET-ready implementation, Ambassador, and we are in 50 countries and we have tracked the countries, how do, how they, what do they do, we find the governments have been paying a lot of attention to infrastructure development, 76% of governments are, you know, very much into that, 77% of implementation rate. And they are also working very hard on, a lot of developing countries have payment solution, but mostly domestic, like 63% of implementation rate. Access to finance is not really taking up, and a lot of unfinished business around skills and regulations. So governments have a role to play. Number two, for the development partners, we need to scale up support to least developed countries and other developing countries. At the moment, despite we all talk about this digital revolution, enabling this sector currently represents only about 2% of total aid for trade commitments and 1% of total disbursements. And that’s, to me, I really don’t understand. Number three, us, we here, sitting there, we need to have integrated support by development partners, because we, as Mona, you said, and Michelle, you also mentioned, we have different competitive advantages. If we come together, because the problems are immense, we have to come together. And, for example, we do this, UNCTAD, we have an e-trade for all initiative, and it’s almost like a clearinghouse. We all come together, and countries will come to us for payment systems. I mean, we don’t do payment systems in UNCTAD. We would go to the World Bank and say, okay, you know, please take care of this. And that kind of coalitions are necessary for international organizations, because what we need out there is big. So last, let me put another plug. I don’t know, I’m doing a lot of advertising for our, we have the UNCTAD e-week coming on the 4th of December, and there will be a lot of these conversations around that, and also a lot of conversations around the data governance issues. We haven’t even gone into that. Because unless you have that resolved, cross-border data governance issues, and that will be yet another barrier to do international trade in this area. Thank you.

Moderator:
Thank you. Any other Jamaica questions? The lady on the right.

Audience:
Thank you so much, and thank you for this exciting panel. Most of my questions are to Mr. Ralph Assa. You mentioned that open trade regime plays a fundamental role in not only allowing businesses to access digital technologies, but the only country that is really competitive with the United States in terms of these digital behemoths is China. And as far as I know, they did not do so through an open system. Europe has an open system, and it cannot compete with the U.S. businesses that are active in these markets. So if the U.S. doesn’t have anywhere near the market share of industries as U.S. or China, how can you expect developing countries using that same open system to be able to compete? And on tax, we went through the same debate in the United States with Amazon. At first, they didn’t have to collect sales tax. When we started having the debate saying that they were putting thousands of MSMEs out of business by not having to pay taxes, just like is happening on the international sphere now. they said that it would make them go out of business but it didn’t they now do administration of tax collection still around as far as i can tell and actually some of our local businesses uh… local bookstores have come back now on development the way to help countries take advantage of digital trade are the issues that shamika was talking about helping them scale up their infrastructure but none of those issues for supporting e-commerce are in the digital trade rules instead we’re talking about banning governments from being able to require a local copy of data to be stored locally which would prevent them from being able to do it digital industrialization themselves and i have been on government being able to require the disclosure of source code which we’ve just had the situation and the need to regulate a i completely explode in the last four months and yet the digital trade rules would prevent government to be able to appropriate regularly a i because it bans the disclosure of source code and you also said that the nondiscriminatory taxation systems represent an alternative leftist sort of way to collecting government revenue cdm are one of the most trade-destroying ways to achieve climate objectives because it’s imposing trade taxes and forcing other countries to pay for the emissions of the e-mail but you guys are advocating carbon pricing now the most trade distortion of trade around the globe which artificially intervenes in economies to create monopolies and artificially increased prices is patent so if we had a waiver on technology patents in climate or in digital it would really scale up so would you mind just dropping up a little bit then we can go to the next question yes ma’am i agree so i’m interested in why you guys seem to keep cherry picking data that actually supports the agenda of the developed countries instead of taking a look at what would actually support developing countries to participate more switzerland has a netflix tax let’s let the moratorium expire and see what happens i don’t think there’s going to be a huge explosion of taxes but countries will have the right to be able to use it strategically for their own development including potentially building up their own domestic industries, which they have a difficult time doing when they’re being slaughtered by digital imports. Thank you.

Moderator:
Thank you very much. We’ll take two more questions, one from here and one from there. So the middle question first, ma’am. Thank you. And one more, and then we’ll get all the panelists to give a quick comment on that. Please go ahead.

Audience:
Okay. Thank you so much for the opportunity. My name is Michelle Mazuisa. I’m from the African Women’s Development and Communication Network based in Nairobi. Can you hear me? Okay. So digital trade is fairly new for me, so please bear with me. My questions could be pedestrian, but I have three questions. The first one pertains to the stats that were given about three quarters of businesses in Africa that are exclusively operating in e-commerce being run by women. I hope you can hear me. You look like you can’t hear me. Okay. All right. So the question that I have there is, what measure was used to come up with those numbers? The reason I’m asking is because having a large number of women operating in e-commerce is not the same thing as looking at the market margin and the profit margin, which is typically dominated by large corporations. So I wonder if in the report, the full report, which I haven’t had access to, actually details the challenges surrounding that or balances that argument so that we don’t have just one perspective, because we also know there’s a digital divide and so forth. I’ll quickly move to the second question. My second question pertains to the issue of taxation of customs duties. The current moratorium makes it difficult for developing countries, as you are aware, to collect revenue, which is important for the realization of human rights and also for the provision of public services for which many women are dependent. But also you mentioned value-added tax, which the OECD itself has reported that because of women’s consumption patterns, women’s income, which is usually lower than men’s because of the wage gap and because of precarious employment conditions, structurally VAT has disproportionately negative effects on women. So I wonder what are your thoughts on that, having made your contribution on customs duties and value added tax. And then my last question relates to business and human rights. I am happy that there are so many organizations that are here meeting together to talk about trade, which largely relies on businesses operating across the globe. So what is your perspective on the role that the WTO should be playing in the conversation on business and human rights, considering that the business and human rights treaty under the UN framework is not really progressing? And climate change is one of the aspects, but what more tangible role is the WTO planning to take in this discourse? Thank you.

Moderator:
Thank you. That was one question within three parts. Next speaker.

Audience:
I am Pritam Banerjee from the Center for WTO Studies in India. I have a question about the report itself and some of the assumptions. So we know that there is a rapidly changing technology as far as things like 3D printing is concerned, but not just 3D printing, but automated manufacturing, et cetera. So what can be done remotely, both in terms of manufacturing, so when you talk about digital trade, and in terms of services, is a very dynamic field. Similarly, we know in customs administrations around the world, technologies are evolving very, very fast, and how they can actually monitor and tax these activities, the capacities are increasing very, very rapidly as well. So your assumptions on both these aspects, to what extent trade can be digitized in the sense that they can be done remotely, and also in terms of how customs can capture these activities and tax them, would define your total, the results that you have come to. So I would be very interested in the assumptions that you made. as to what extent of trade, both in goods and services, can be digitized, by what time, and the ability of customs, given the change in technology, to be able to tax it, because your final results are absolutely dependent on the two assumptions on this count.

Moderator:
Thank you very much for that. I think we all have to go to panels after this one, but, Ralph, I’ll give you the floor, followed by Ulrich, and then IMF, and Mona, and then finally Shamika. Ralph, you have the floor.

Ralph Ossa:
Yeah, thank you very much. I need to run in a minute, so thank you very much for giving me the floor. I mean, I really like, you know, the public forum, and that we, you know, can have these exchanges that we sometimes don’t have, you know, when we are in our echo chambers. I guess I’m very grateful for the remarks, even if they’re critical at times. You know, one thing I do want to say is that I think we are really way past this mindset of, you know, let’s stabilize, let’s liberalize, and let’s privatize, and then the world is going to be good. And I think that W.E. Joe’s also, you know, past this mindset, if it has ever been there. I mean, I haven’t been here for that long. But we are certainly not saying that, you know, all you need to do is liberalize digital trade, and then, you know, life is all good. In fact, this very initiative here, you know, I think is testament to the fact that this is exactly not what needs to be done, and that, you know, we need to reduce trade costs and digitally deliver services, but we also need the skills upgrading. We also need the infrastructure, and we need to all come together to deal with these issues collectively. So for me, you know, it’s just a very important point that, you know, I also, you know, really want to convey, that we also see this as a challenge that needs cooperative approaches in many domains, and not just in trade policy. So let me maybe stop there. I’ll just briefly echo and build on what Ralph said. Even also the OECD, we are not just saying liberalize, liberalize, like we perhaps did many decades ago. We understand fully that also when we talk about trade, although we are a very, very staunch defender of the multilateral trading system and the W.E. Joe. We do realize that there are social concerns, environmental concerns, climate concerns, and, like it or not, in a world with geopolitical friction, the national security concept is also encroaching on trade, investment, technology, research, and so on. These are facts of life, so if you want to preserve globalization, you want to re-globalize, and you want this next big digital transformation agenda to succeed, we have to be mindful of all these things, of course. And I don’t have answers to all the three parts of your question around gender and trade, but I think it’s extremely important, and we at the OECD are launching new work on trade and gender, so thanks for putting that also to our attention today. Thank you. Michel?

Michele Ruta:
Yeah, thanks for the question and the comments. Just a couple of points to clarify. So the argument that we were making, that I was making, and that we have in this paper, is not an argument against taxes. Obviously, governments need to impose taxes in order to finance the public goods that are needed. The argument that we were making is an argument against the use of discriminatory taxes. So that’s the point. And it’s an argument about, essentially, efficiency, and efficiency is in the interest of everyone, and it’s in the interest of developing countries. So that’s the main point. That said, I agree with the comments that were made. There is a need to invest more in capacity development, because doing this transition to different upgraded tax systems requires investments, and many developing countries need support on that. The Fund does quite a bit, but obviously could always do more in this area. And the other point about the inclusion and women, it’s a well-taken point. But let me be clear, I don’t think there is any evidence that tariffs promote women. If the report that was done by the World Bank and the WTO last year would suggest exactly the opposite. There is a different argument, which I agree, that different types of taxes, income taxes, VATs, and other domestic taxes can have different effects on inclusion, and that’s an important argument. In recent years, in line with what my colleagues were saying at the IMF, we have entire divisions that deal exactly with the issue of inclusion, and so they spend a lot of time looking into these things, including how tax systems can be designed to promote inclusion. But tariffs are certainly not the way to promote inclusion. Thank you.

Mona Haddad:
And thank you again for your questions. It’s very important to us to hear your questions and listen to your concerns, and we take that very seriously. I want to say that I’m a strong believer of trade. Trade has provided, and I’ve seen it in my eyes, I have seen countries really grow tremendously and much faster because they engaged in trade and were able to take advantage of the opportunities of trade and the global market. I have seen this in Morocco, in Laos, in Cambodia, in Vietnam, in Mauritius, and in so many other countries. So trade truly offers an opportunity for development for the developing countries that we deal with. Having said that, today is absolutely not the same world as 10 or 15 years ago. There are many other concerns that are coming to the fore. We cannot anymore just talk about trade liberalization. There are issues of climate, human rights, as you mentioned, national security, access to critical minerals, and inclusion, not only women but also the youth. and disadvantaged, lagging regions and so on. So the trick is really to be able to come up with a new offer on trade that allows developing countries to take advantage of the opportunities from trade and at the same time do it while in a sustainable manner, looking at all these factors. Thank you.

Shamika Sirimanne:
Thank you so much. I mean, there were so many questions asked. I think we probably have to go into another session to answer these questions. Two things. The women have enormous opportunities in this emerging digital world, but what we see in our own work, we have a mentoring program, e-trade for women program. What we see is the women are facing basically double difficulties. The things that they are facing, the analog world, and now they have another layer of the digital world. But the opportunities for women to be away from a brick and mortar shop and to open up for the whole world and to sell goods from their home while they have their caring duties, this is immense. And I think we need to pay a lot of attention to this. And the last point, I think everyone talked a bit about the whole data governance issues. And I just want to say the cross-border data is not just a trade issue. So please be aware of that when you’re doing your negotiations. Cross-border data is a development issue. Cross-border data, you need cross-border data to do trade because otherwise you’re not going to have international trade. But the cross-border data is also extremely important. We saw during the COVID-19, the genome of the virus was shared among many scientists across the world. And that’s how we got these vaccines going real fast. And that sharing of data needs to be there. As we are facing climate change, we have to share a lot more data. The data sharing mechanism should be there. Yes, data has a private angle, data is a trade angle, but data is a much bigger thing. And the human rights is also a data issue. So please be aware the data governance, the cross-border data governance is much bigger than trade. Thank you.

Audience:
No, but the question on the assumptions that you have made, because that’s the fundamental part of the report results, you know, what you can digitize and do remotely, that will define what you can tax or not tax. So for example, if I can manufacture a car completely using robotics and digitally somewhere inside the country, instead of importing it physically, that takes away the revenue that I can apply on importing that car. So the conclusions you came to would depend critically on the technologies that you assume will happen in the next five to 10 years.

Moderator:
Thank you for the comment. I think there are going to be many, many more questions like this in the room. Ralph, did you want to add something?

Ralph Ossa:
Yeah, I mean, I think it’s a, I’m not trying to dodge the question, I just have to run to a panel and I promised to meet the speaker at 12, so he’s probably freaking out on the other side of the building. But I’m happy to follow up. I mean, the quick answer, I mean, you’re asking about the tax implications of the moratorium. And you know, as I’ve said, in the presentation, there are all sorts of measurement issues. The best guess we have so far is that the revenue implications are not, you know, that massive. But, you know, of course, there’s all sorts of assumptions and we can follow up perhaps afterwards on this issue. So feel free to reach out. By the way, also to you, I would, I mean, I’m happy to meet for coffee or something because I really want to, you know, hear these things and really understand and discuss. And so I’m not trying to dodge it, I just really need to run.

Moderator:
Ralph, thank you. You beat me to it. I was just going to say, you know, there are thousands of questions still in the room. It’s just that we have a time constraint. So I would say, panelists, don’t go away, and those you want to engage with, feel free to contact them and to talk to them. The good thing about this is that there’s engagement. People actually want to discuss this. So I think it’s a really very good thing that way. And it’s going to be digital engagement, if I may say. Absolutely. But thank you. Thank you for the panelists for being here this afternoon, this morning. We’ve reached afternoon already. And thank you for all the participants for your questions, your comments. Sorry we had to cut some of you short. But thank you again, and have a great day. Thank you.

Yasar Jarrar

The potential of technology in the supply chain is generating excitement among participants, as seen in their positive sentiment. For example, Dubai Chamber and Dubai Customs have implemented a virtual freight and logistics quarter, resulting in a significant improvement of approximately 50% in costs and efficiency. This highlights the positive impact of technology on the supply chain industry.

However, some participants believe that the actual implementation of trade tech is still in its early stages, leading to a negative sentiment. This is mainly due to the fragmentation in regulation and understanding of data. There is a clear need for universal standards for supply chain emissions as the existing regulations date back to the 19th century. The rapid progress of technology has outpaced the understanding and updating of regulations, which urgently needs to be addressed. Consequently, there is a negative sentiment towards the slow implementation of effective and universal standards by regulatory bodies and governments.

Participants also anticipate a fragmentation of trade routes, with a neutral sentiment towards the prediction of pockets of excellence in certain trade routes. This implies that some trade routes may be more technologically advanced than others. The successful implementation of trade tech requires cross-border and global connectivity. However, the challenge lies in determining the appropriate platform and governance for these cross-border discussions. The UAE exemplifies a unique approach through the establishment of a cross-border sandbox, allowing for the adaptation and testing of robust regulations. This demonstrates the agility and speed of the UAE in embracing technology and innovation.

The importance of harnessing technology’s potential across various sectors, such as trade, healthcare, and education, is emphasized. It is argued that technology can play a crucial role in driving progress and achieving the related Sustainable Development Goals (SDGs).

Addressing the technology skill gap is deemed urgent for the successful implementation of sustainable technologies. For instance, U.S. Steel estimates that it would take approximately 30 years to retrain their staff for the decarbonization of some steel products. Bridging this gap requires concerted efforts to ensure the effective adoption of sustainable technologies.

The significance of scale and the need for reality checks in scaling sustainable technologies are positively emphasized. Participants agree with the notion that scaling sustainable technologies requires careful consideration of real-world limitations. This implies the need for practical and realistic approaches to achieve scale in the adoption of sustainable technologies.

Governments are viewed as key actors in closing the gap between technology disruption and regulation, and there is a positive sentiment towards the idea that governments can drive change through incentives and targets. However, punitive measures are not seen as the most effective approach. Instead, the benefits of adopting sustainable technologies should outweigh any negative consequences.

The inadequate enforcement of regulations is negatively perceived. It is recognized that past targets have often been missed, highlighting the need for stronger enforcement to ensure compliance.

The main challenge in implementing technology in the supply chain lies in surrounding aspects rather than the technology itself. This emphasizes the importance of addressing related issues such as regulation, governance, and skill development to fully harness the potential of technology in the supply chain industry.

There is a positive sentiment towards viewing the additional cost of sustainable options as an insurance against a degrading future. This suggests a shift in perspective, recognizing the long-term benefits and value of investing in sustainable practices.

Government procurement is identified as a significant driver in accelerating the transition towards green practices. With government procurement accounting for a substantial portion of global GDP, it can have a transformative impact on promoting sustainable practices across various industries.

The need for a public-private regulatory global body is positively mentioned. It is argued that the private sector is often more advanced in terms of knowledge and implementation of technology compared to governments. Therefore, involving the private sector in global meetings and discussions is crucial to ensure effective and up-to-date regulation.

In summary, the potential of technology in the supply chain generates excitement among participants. Challenges related to regulation, governance, skill development, and enforcement need to be addressed for successful implementation. The importance of cross-border discussions, universal standards, and regulatory bodies keeping up with technological advancements is emphasized. Additionally, the role of governments, bridging the technology skill gap, and the significance of public-private cooperation are highlighted. The sentiment is generally positive, recognizing the transformative power of technology in promoting sustainable practices in trade, healthcare, and education.

Angel Donev

MERSC, a global supply chain company, is fully committed to making global supply chains greener by leveraging technology. One of their key goals is to become carbon neutral by 2040, and they have already taken significant steps toward achieving this target. For instance, they have recently launched their first vessel that runs on green methanol, a sustainable fuel alternative. This initiative is a clear indicator of MERSC’s dedication to reducing carbon emissions in the shipping industry.

To monitor and optimize fuel consumption, MERSC’s ships are equipped with approximately 7,000 Internet of Things (IoT) sensors. These sensors provide real-time data on fuel usage, allowing for immediate adjustments and improvements in efficiency. Additionally, MERSC operates an advanced operations centre that utilises analytics to monitor sea conditions and optimise shipping routes. By leveraging technology in this way, MERSC is able to reduce fuel consumption, limit carbon emissions, and minimise the environmental impact of their operations.

In addition to their focus on greening supply chains through technology, MERSC also recognises the need for efficiency in land logistics. They aim to optimise container transport through the use of technology, as there is currently significant inefficiency in this area with excessive empty miles performed by truckers. By implementing technological solutions, such as improved container swapping between customers, MERSC seeks to streamline land logistics and reduce waste.

However, MERSC acknowledges that the barriers to scaling technology in supply chains are not purely technical. Rather, they believe that change management is a significant challenge that needs to be addressed. While technology may be readily available, navigating and implementing changes on a large scale can be hindered by various factors such as legislation and on-ground execution. MERSC emphasises the importance of change management in order to fully leverage the potential of technology in supply chains.

Furthermore, MERSC recognises that well-defined standards and flexible implementation are crucial for managing change and successfully scaling technology. By establishing clear guidelines and allowing for adaptable practices, the adoption and integration of technology can be made smoother and more effective.

MERSC also believes that incremental connection to a global network can create additional benefits and incentives. As more individuals and businesses join the network, the advantages and opportunities multiply, generating motivation for others to connect and engage. By encouraging incremental connections, MERSC aims to expand the benefits of a global network and stimulate further technological advancements.

In terms of consumers’ preferences, MERSC has observed that there is a willingness to pay more for greener options. This is evidenced by the fact that 2% of all cargo carried by MERSC is already pre-paid on alternative fuel sources. Furthermore, companies like Apple have actively embraced carbon neutrality, showing that sustainability and responsible consumption are becoming increasingly important factors for both businesses and consumers.

MERSC also believes that penalties and carbon taxes have a role to play in driving change towards greener supply chains. The International Maritime Organization has committed to improving sustainability in the shipping industry, and studies conducted by the Boston Consulting Group indicate that the introduction of carbon taxes can lead to an uplift in the cost of living. By implementing penalties and carbon taxes, a balance can be struck that encourages companies to adopt sustainable practices and contribute to a greener future.

In conclusion, MERSC is deeply committed to making global supply chains greener by leveraging technology. They have set ambitious targets and are already implementing sustainable solutions, such as green methanol-powered vessels and IoT sensors to monitor and optimise fuel consumption. However, MERSC acknowledges that change management issues, such as legislation and on-ground execution, can impede the widespread adoption of technology. To successfully scale technology and drive change, well-defined standards, flexible implementation, and incremental connections are key. Additionally, the willingness of consumers and businesses to pay more for greener options, coupled with the implementation of penalties and carbon taxes, can further incentivise the transition towards greener supply chains. Overall, MERSC’s approach demonstrates a forward-thinking stance in aligning supply chains with sustainability goals.

Shamika Sirimanne

The analysis of the speakers’ statements reveals several key points regarding the use of technology in trade and its impact on developing countries. Firstly, it is highlighted that the United Nations Conference on Trade and Development (UNCTAD) has been actively working in developing countries for 40 years, introducing digital platforms and customs automation. This has resulted in improved efficiency, reduced bureaucracy, and cost savings in the clearance of goods. Notably, small traders, especially women entrepreneurs, benefit from this automation, as it reduces the hassle they face.

Automation also brings about positive environmental changes. By minimizing the use of paper and reducing the number of trips required for clearing goods, customs automation significantly decreases carbon emissions. The implementation of these automated customs processes contributes to sustainable practices in trade.

However, amidst these positive advancements, challenges in data governance emerge. Questions surrounding data ownership, access, intelligence creation, and profit-making pose significant cross-border data governance challenges. The absence of a universally accepted solution poses a hurdle in ensuring effective and secure data management.

Political support plays a crucial role in implementing trade technology solutions. The successful establishment of a single window system in Rwanda, facilitated by a presidential decree, highlights the necessity for political buy-in to drive technological advancements.

To fully embrace the benefits of trade technology, it is essential to consider sustainability and capacity building. The analysis points out that solutions must go beyond merely providing technology and also focus on sustainable practices. This includes training IT staff and ensuring local adaptation of systems. The importance of nurturing and retaining trained IT staff is emphasized, as the loss of skilled individuals to other countries can hinder progress.

The analysis also highlights a significant disparity in the readiness of developing and developed nations to benefit from new technologies. The readiness index, which examined 166 countries, revealed the United States, Sweden, Singapore, Switzerland, Netherlands, and Korea as the top performers, while many African and Latin American countries ranked at the bottom. This disparity underscores the need for deliberate policy changes and critical investments to bridge the technology gap and reduce inequalities. Countries like India, the Philippines, and Vietnam have demonstrated that deliberate policy changes, investments in research and development (R&D) and information and communication technology (ICT) capabilities, and skills development can significantly improve readiness and capabilities to benefit from new technologies.

Moreover, the analysis emphasizes the dynamic and fast-paced nature of digital technologies, creating a narrow window of opportunity for developing countries. It accentuates the importance of seizing the limited moments when opportunities arise to leverage the benefits that digital technologies offer.

The issue of cross-border data governance is another significant challenge identified in the analysis. The complications surrounding e-bill of landing due to cross-border data issues and different governance systems across the globe are identified. The analysis acknowledges cross-border data governance as not only a trade and human rights issue but also an environmental concern. Building interoperability among various data governance systems is recognized as crucial for effective data management and collaboration.

In conclusion, the analysis highlights the crucial role of technology in improving trade processes and efficiency. It sheds light on the positive impact of automation and digital platforms in reducing red tape, promoting sustainability, and benefiting small traders. However, challenges in data governance, political support, and bridging the technology gap between developed and developing nations remain. To fully leverage the potential of trade technology, a comprehensive approach that includes sustainability, capacity building, and strong policy frameworks is necessary. The analysis stresses the need to expand the dialogue on trade tech to foster innovation and exchange of ideas within the international community.

Moderator

During the analysis, the speakers focused on several key aspects of sustainable supply chains and trade tech. An important theme that emerged was the need for increased visibility and transparency in supply chain operations to reduce inefficiencies. The speakers highlighted the significant inefficiencies in land site logistics, such as empty miles performed by truckers due to a lack of platforms to exchange containers.

Technology, particularly AI, IoT, and blockchain, was identified as having immense potential in improving efficiency and reducing costs in supply chains. The analysis pointed to McKinsey data, which suggests that AI could improve supply chain efficiency and reduce costs by 50%. Dubai Customs was also mentioned as an example of a company that has improved transaction costs and efficiency by about 50% through the use of technology. The speakers emphasized the role of technology in achieving sustainability goals, mentioning its ability to predict future disruptions, understand the length of the transportation chain with sufficient data, and bring about a sustainable revolution.

Government regulations, policy changes, and incentives were highlighted as crucial factors in promoting sustainability. It was mentioned that companies are setting their own nationally determined contributions (NDCs) to work towards sustainability targets set by governments. The analysis also called for the establishment of green regulations and policy changes to further encourage sustainable practices. Penalties and carbon taxes were suggested as means to drive large-scale changes, and the International Maritime Organization was recognized for its steps towards implementing green regulations, despite the existence of unclear terms.

The discussions on data governance revealed that it is a significant issue, particularly in cross-border data sharing. The analysis called for the establishment of clear standards and global compliance incentives, rather than mandates. The need for interoperability between different data governance systems was also highlighted. The speakers emphasized the importance of building interoperability into varying data governance systems and promoting open global conversations on the issue.

Consumer behaviour was identified as a significant driver for sustainability efforts. It was noted that people are increasingly making purchases based on companies’ sustainability initiatives. Brands like Apple were given as examples of companies taking note of this trend and making firm commitments towards environmental care and sustainability.

Collaboration was deemed essential for the exchange of information and data in supply chains. The analysis highlighted the benefits of collaborations, such as optimizing transportation, logistics, and scenario planning. It was also noted that companies are increasingly sharing data for a better understanding of their network. The analysis emphasized the need for educational efforts to help smaller companies understand the importance of data sharing and collaborations in supply chains.

The analysis touched on the role of trade tech in making trade more efficient, green, and inclusive. It was emphasized that trade tech needs to be part of open discussions and shared to accelerate its adoption. The potential impact of trade tech on developing countries was also discussed, emphasizing the windows of opportunity that arise but are often short-lived.

Overall, the analysis highlighted the importance of sustainability in supply chains and the potential benefits of technology adoption and collaboration in achieving these goals. It also underscored the need for government regulations, policy changes, and incentives to drive sustainable practices. The challenges of data governance and the influence of consumer behaviour on sustainability efforts were also addressed. The analysis concluded by calling for greater collaboration and the establishment of global regulatory bodies to drive sustainable practices in trade and supply chains.

Sahil Kothadia

During the discussion on sustainable supply chains, the speakers emphasised the need for collaboration and data sharing among companies to achieve greener and more sustainable practices. They highlighted that without visibility beyond Tier 1 supply chains, manufacturers cannot fully understand the environmental impact of their raw materials. By embracing network visualisation, companies can gain insights into potential vulnerabilities and identify more efficient and environmentally friendly paths in their supply chain.

Layered mapping of supply chains, along with considering transportation and wider disruptions, was proposed as an effective strategy to mitigate risks and optimise costs. This approach enables companies to reduce transport hops between tiers and strategically locate warehouses, resulting in reduced carbon footprints.

The potential of artificial intelligence (AI) and predictive analytics in transforming sustainable supply chains was also discussed. With sufficient data, AI can be leveraged to predict and prescribe measures for cognitive supply chain management. Predictive analytics, on the other hand, can estimate the duration of transportation leg disruptions, enabling better planning and risk mitigation.

Collaboration emerged as a crucial factor in the supply chain ecosystem. The speakers argued that when supply chains and the ecosystem collaborate effectively, the impact of disruptions can be minimised. Collaboration facilitates the exchange of critical data and information throughout the supply chain, extending all the way to customers, ensuring greater efficiency and resilience.

The importance of data sharing and collaboration was further emphasised. Companies are now more willing to share information, realising its potential in understanding the complexities of the supply chain network. This collaboration allows for better organisation and planning, logistics optimisation, and scenario planning. However, it was acknowledged that convincing companies to share data requires a significant effort and education, but once they understand the importance of collaboration, they become more willing to contribute.

Furthermore, the discussion highlighted the role of risk-based inventory management in promoting sustainable and greener supply chains. Companies can optimise their investment distribution across the entire supply chain, resulting in better risk management and more environmentally friendly practices.

The urgency of educating companies about the importance of collaboration and data sharing in supply chain management was also emphasised. The speakers stressed that companies need to be educated and made aware of the benefits of collaboration to overcome any reluctance in sharing data. Once companies comprehend the positive impacts, they are more likely to actively engage and contribute.

In terms of GHG emissions control, it was suggested that companies need to start somewhere rather than trying to solve everything at once. One way to do this is by focusing on controlling GHG emissions, specifically through categories such as purchasing goods and services, transportation and distribution, waste management, business travel, and employee commute. The forum also mentioned the discussion of greener steel production by Sahil Kothadia.

The importance of engaging suppliers and working collaboratively to collect and control GHG emission data was highlighted as well. Larger manufacturers were encouraged to support smaller suppliers in their journey towards a greener ecosystem.

To optimise GHG emission control, it was proposed to strategically optimise supply chains and set clear boundaries within the value chain. Scenario planning of supply chains was mentioned as a key tool in understanding greener options.

Regarding policy and regulation, it was agreed that they play a vital role in creating an even playing field and promoting equal opportunities. Companies expressed the need for policies and regulations that are consistent and do not burden them with multiple reporting formats and structures.

A noteworthy observation was the importance of having a well-connected sustainability group that collaborates closely with individuals involved in day-to-day operations. This connection was seen as crucial for effective control of GHG emissions.

Overall, the discussions emphasised the significance of collaboration, education, and data sharing in achieving greener and more sustainable supply chains. The potential of technologies such as AI and predictive analytics was highlighted, along with the role of risk-based inventory management. It was acknowledged that policy and regulation should support companies in their sustainability efforts.

Moderator:
Good morning, ladies and gentlemen, esteemed panelists, and distinguished guests. I’m honored to welcome you to this pivotal session, Trade Tech for the Green Supply Chain, as part of the WTO public forum, where we will delve into the heart of one of the most pressing and transformative challenges facing the world today, the revolution of the global trade through technology, trade tech. But before we dive into our discussion, I want to set the stage by highlighting an initiative that embodies the very essence of this digital transformation. The World Economic Forum and the United Arab Emirates have embarked on a groundbreaking three-year trade tech project that aims to reshape the landscape of global trade, leveraging cutting-edge technologies, streamlining trade processes, and nurturing an ecosystem that is not just efficient, but also inclusive, equitable, and sustainable. Why this initiative is so crucial, you may ask. The answer lies in the evolving dynamics of our world. Technology is reshaping the flow of global trade at a pace that policy and regulations are struggling to match. Emerging technologies such as blockchain, artificial intelligence, 3D printing, and the Internet of Things are poised to usher in disruptions that will only accelerate in the coming decades. The fourth industrial revolution is here, and it demands that international trade becomes more efficient, inclusive, and equal. This means ensuring that innovations benefit not only multinational corporations and developed nations, but also empower micro, small, and medium-sized enterprises and developing countries to access the opportunities presented by these technologies. This also means we should explore the use of trade tech to achieve greener supply chain logistics and this is why we are gathering here today. This could be particularly challenging as logistics has both concentrated and fragmented legs, depending on whether you look at the global shipping level, the concentrated, or the last mile delivery level, the fragmented side. Limited data sharing on availability and loads, for instance, prevents optimization, with some brokers creating a business model out of such a lack of visibility. At the same time, capital constraints and low profit margins cause innovation. We’ll discuss about all these while also trying to understand how new business models beyond third-party logistics are emerging thanks to trade tech and stepping up to the challenges as they entail a higher level of service integration, allowing for higher customization, ways to deal with supply chain uncertainty and disruption, and ever greater supply chain automation thanks to the incorporation of artificial intelligence. Our panelists present a diverse spectrum of expertise from industry leaders to advisors and they will shed light on various facets of this transformative journey. So what do we expect to explore from the panelists today? We would like to explore how trade tech can unlock efficiency gains that serve green outcomes in supply chain logistics, review how different market structures globally and domestically affect coordination for tech development and data sharing, and consider the customer and other incentives for a stronger carbon focus. And I’m very pleased and honored to have this high-level panel here. We have Dr. Jazar Jarrar. He’s the senior advisor to the UAE Ministry of Economy. And he holds the position of the senior partner at the IAG in the UAE. Then we have with us Mr. Anshul Donev, the Senior Vice President, Transportation Platforms and Tech Operations at AP Mollermersk, Sahil Kothadia, the Vice President of Global Supply Networks at Resolink, and last but not least, Mrs. Shamika Sirimani, Director, Division of Technology and Logistics at UNCTAD. She leads the UNCTAD’s work on trade logistics, which is geared towards the twin transition of global supply chains into green and digital. Thank you all for being here with us today. So I’m inviting now the overall comments from all panelists, how to balance sustainable outcomes in logistics when you have different market concentrations internationally and domestically. So maybe let’s start with Mr. Anshul Donev from MERSC. What is MERSC doing in terms of technology applications to make global supply chains greener today? And what are the plans for the future?

Angel Donev:
Thank you for having me today. It’s a pleasure to be here. MERSC is doing a lot, right? We have originally, back in 2016, issued a statement that we’ll become carbon neutral by 2050. A couple of years later, we pulled the strategy 10 years earlier. So we have said that we’ll achieve it by 2040 and with meaningful results already by 2030. And the journey so far has not been easy, but yesterday was a very big milestone where we had the naming ceremony of our first vessel that can run on green methanol in Copenhagen. And it’s first out of many. It’s a milestone for the industry, not only for MERSC, with 125 ships more sitting on order that are enabled to work with MERSC. Why I’m going in this direction is because global shipping represents around 3% of global carbon emissions. If you zoom in between the different elements of this carbon footprint, a significant part is the shipping fuel and how you navigate ships. What we’re doing there with technology, one thing is to continuously optimize the consumption of the ship. On average, our ship will have something like 7,000 IoT sensors, which gives indication near real-time on how the ship is performing, where it is positioned, what are the tuning levels. This is combined with a global center of operations of all the ships where we monitor currently all the conditions around the sea, what’s the optimal route that we need to take given the weather conditions, given the state of the cargo, given the promises made to customers across the board. There is a lot of analytics involved to make those decisions every day and to optimize the optimal speed, which can make a difference of up to 30% of the fuel consumption even on a regular ship. That’s just the sea part of it. If I look at the coverage of Maersk, the other big element is, of course, the land site logistics. Every container that we transport has to be hauled to the port and outside of the port on both ends of the import and export site. It’s shocking. I entered this industry four years ago. It was shocking to see the inefficiencies. In terms of how many empty miles are performed by truckers around the world to handle those containers. The main reason for this is… We don’t have a good platform and technology to exchange those containers between different customers. So even if you have two warehouses of two different customers 100 meters away and one just finished importing something and the container is ready for the return, 98% of the cases this container will be put on a truck, will be hauled to the depot, and then the next customer that is just 100 meters away will do absolutely the same. They’ll send an empty truck to the depot, they’ll take the container and they’ll bring it to the same facility. So this level of triangulation is still not prevailed. You see some companies working on it, mostly start-ups and to some extent scale-ups, but the overall collaboration, it represents a massive opportunity to optimize this thing. And in my opinion it’s something that we must do because renewing all the trucks to be electric and to drive efficiency there, it will take us longer. So we are obliged to pursue this opportunity. And then of course there are many other smaller things like we’re looking at electrification of terminals, we’re looking at even like greener IT where we’re demanding from our data centers and providers to use renewable energy. But I’ll pause here and give the word to others to answer as well.

Moderator:
Thank you, Angel. That was very interesting also to talk about the inefficiencies, and there is still a lot of room for improvement. Maybe Sahil, when it comes to greener, more sustainable supply chains, visibility and transparency play a big role. However, most of the organizations don’t have the visibility beyond their high-volume tier one suppliers. Knowing this, how can organizations leverage supply chain technologies and AI to solve this visibility and knowledge problem?

Sahil Kothadia:
Absolutely. Absolutely a good question, and thanks for having me today. Good morning to you all. As he pointed out, there are certain initiatives that bigger companies are taking and they are going to cost time and money to get them implemented. In the meantime, some of the tech companies like Resolink, what we do, we give an understanding to our customers, to big manufacturers, a visibility beyond the Tier 1 supply chains, which is very important because without that visibility, without knowing where you’re sourcing your raw materials from, you would not understand how much greener or grayer your transportation leg is from the Tier 3 or Tier 4 supplier all the way to your manufacturing unit. So that’s one thing. So network visualization becomes the cornerstone once you start understanding where your parts are being manufactured at what sites, at the Tier 1 level, at the Tier 2 level, at the Tier 3 level, that’s when you start understanding the potential vulnerabilities and understanding how you can make your supply chains, how you can effectively reduce the carbon footprint. The other thing is some small measures. If you try and understand your supply chain, you map your supply chain, and then you overlay that with your transport layer, where the goods are being shipped. That’s where you can start understanding the intricacies involved. You can work with the logistics companies or your suppliers to ensure that you are warehousing at a proper location or you are effectively reducing your transport hops between the tiers. And then on top of that, if you overlay the disruptions that occur across the globe, either due to geopolitics, either due to natural disasters, or any other aspects that can cause a disruption in the supply chain that could hit logistics, that could hit manufacturing, that’s another thing that will allow you to mitigate those risks and disruptions and optimize the cost of managing risk more sustainably. I mean, you can, you mitigate risk, but I mean, you can, how do you mitigate risk? Are you mitigating the risk sustainably? And that’s where technologies like AI, the mapping technologies definitely will help. So A, understand your network, B, map, overlay that with your, what do you say, your transportation network, and then overlay that with the disruption, the possibilities of monitoring disruptions, right? And then technologies like AI can help you with, and this is what we believe at Resolink, and this is what the tech companies can do, is to basically make it predictive, then make it prescriptive, and then make it cognitive. It’s not going to happen overnight. But the fact of, we are here today where you can, if you have enough data and volumes of data, you can look at, you can look and understand the causes of why, understand how long is your transportation chain. And then what you can also do is you can then predict, if there is a disruption, right, you can predict how long that hop is going to take between, how long is the disruption going to cause, or how long that transportation leg is going to last, right? So all of that, technologies like visualization and AI will help. bring in a sustainable revolution. It’s going to be slow, but it’s getting there.

Moderator:
Thank you, Sahil, very much. I appreciate it. Maybe going to the other panelists, any spontaneous thoughts or reactions, Dr. Jassar Shamika?

Yasar Jarrar:
I can start if you want. Hello, everyone, and good morning. So I will share some reactions from our vantage point in the UAE. So I’ll talk a little bit about the potential, because we are unbelievably excited about the potential, the fourth industrial revolution, all the good stuff we keep hearing about, you know, the blockchain impact, the visibility that data will give us, IOTs monitoring and optimizing trade routes, McKinsey gives us data that AI could improve efficiency in the supply chain, reduce costs by 50%. We applied some of that stuff and Dubai Chamber, Dubai Customs, they have a virtual freight and logistics quarter that improved costs of the transactions and hence improved the efficiency, reduced paper and all the related issues by about 50%. So we see the potential. It’s unbelievably exciting. And the UAE now is engaged in establishing trade agreements with about 34 countries around the world. Biggest one was India to start off with and to build on that, just launched the India Economic Corridor, joined the BRICS. Indonesia was signed up as a trade agreement, Turkey. So there’s a lot of potential. So the UAE is a trade hub. And as a trade hub, you know, efficiencies that can be brought to supply chains is unbelievably important. And making those supply chains green and globally friendly is equally important. So that’s the potential. The reality is, to be honest, from what we see, trade tech is in, I’m going to steal a one-liner from Jeff Bezos here. It’s on hour one of day one. Right? We see what’s possible. People are dabbling with it here in left, right, and center, but when it comes down to it, we talk about visibility of supply chains, and yet when we talk about sharing data for this visibility, every country puts up brick walls, and we start banning people from using the data. The servers have to be here. So there’s a huge fragmentation in regulation, and our understanding and acceptance of this data. The state tech is a complex system, not complicated, it’s a complex system, and a complex system, all the pieces have to work together, countries have to align, there has to be underlying understanding of the standards, a ship going, and you just mentioned that, a ship going from one destination to the other will get a very different environment by way of data, the freight, the trucks that are being used from one country to the other, and if we can’t get that right, then you have no interoperability. We used the legacy systems approach in the past, we had ERP system and middleware to bring our back ends together when we were doing some basic ERP in our own company. Now imagine the whole world is a company, and we have to have an ERP system to manage trade data around that, and collecting all this data, because if we want to have visibility on emissions, we need to have full visibility on emissions. If we want to be able to trace certificates of origin, which our friends in the Global Trade Facilitation Alliance are doing, helping some countries upgrade how they capture and register their certificates, then everybody has to accept those standards. So we see a lot of potential, but a lot of impediments to getting trade tech even close to its potential. So I think the one thing that keeps coming to my mind when we work on these things, and we engage with the World Economic Forum and others to advance these conversations, is we seem to have now 21st century technology, as clearly demonstrated, and 7,000 IoT sensors on one ship clearly says that we can monitor everything. Operating in what I would say 20th century management systems, how we still operate and put the empty miles and we put the containers. working in an environment of 19th century regulations. I don’t think the regulations have properly changed since we started shipping things on old ships. And that’s a huge dichotomy now. And I think the thing that needs to catch up really is the regulations. It’s these conversations, it’s the World Trade Organization, it’s people agreeing on how do we measure data, how do we make sure visibility is available to all, how do we define, how do we, we were talking about carbon pricing, how do we make sure there’s one price or a price somewhere so we all follow the same rhythm. I think the tech can deliver. It’s now our time to catch up as governments and intergovernmental organizations to allow tech to deliver what it can deliver. And that story probably is not just a trade issue. It’s repeating in every single sector. The potential for AI and tech and IOT and blockchain in healthcare and education, but the visible impact on our green supply chain is in trade. I think we can do wonders for reducing emissions if we can quickly deploy these technologies. My best prediction on this and where we’re seeing the next five years and maybe everybody could react to this is we’re going to start seeing pockets of excellence or maybe a balkanization of trade routes where some trade routes will become a little bit better than others. You can operate your smart ships in certain areas. Other areas can’t even have handled the data or the docs until the whole world agrees on a back-end standard, which is why we’re here, which is why we’re hoping this conversation continues and expedites. Technology is moving about a million times faster than our understanding and updating of regulations.

Moderator:
Yeah, maybe you just mentioned the international organizations and the role here. Maybe this is a good moment for Shamika to chime in.

Shamika Sirimanne:
Thank you. Thank you so much. I think, Yasser, as you said, the technologies are moving really fast and you also talk about the reality on the ground is something else. So let me bring some reality on the ground from our own work. You see, UNCTAD is the trade body of the United Nations and for 40 years we have been in developing countries. bringing really massive, complex digital platforms to start to do the customs automation, and then now we are increasing automating entire governmental procedures through these things called e-single windows. And we are in 102 developing countries and territories, and I think as we see the results are very quick. Cutting red tape for traders so they spend less time and money on the clearance of goods, less hassle and ease of business for small players, especially women entrepreneurs, so they don’t need to be hassled at the borders. And we have an enormous amount of numbers to say before and after the automation. The efficiency increases, the red tape goes down, the transparency increases. It’s good for small traders. And we are increasingly also introducing AI and the machine learning, especially for risk management and selectivity. I think as you mentioned, Angel, that if you have lots of data, you can do lots of things. I think this is also, Sahil, a point that you raised. So we are introducing AI and machine learning for risk management, selectivity, and all that. And we also have programs for e-business and e-registration solutions. We have an e-trade portal. It’s like a one place for the exporters or the importers to go and see what the enormous amount of work they need to do to get their goods. So they have increased transparency and predictability of these regulations that are stuck in the 19th century. That’s just, Yasar, you mentioned. But what we are now starting to work on, the environmental footprints. There are no methodologies for this. So we are developing methodologies, for example, to try to see what happens to the… the use of paper, number of trips for clearing goods, idling trucks at the border, and what are the implications when you automate your systems. And this is a work in progress. In fact, my colleagues are now developing a calculator for the ease in developing countries to calculate how much they save the earth. Now, in Timor-Leste, for example, customs automation reduced more than 15,000 kilograms of carbon emissions since the automation went into effect. And just issuing one electronic investment certificate, just one, an e-investment certificate, allowed for 95% reduction of the number of trips between customs and the investment authority and a 95% decrease in paper. And then in small countries like Vanuatu, just making it e, the sanitary and phytosanitary applications submitted to the single window, the reduction of paper use was 99%, just like that. And the trips to the customs and to all these other places was 98% drop. So these are all good. So it’s just that for the last 40 years, we never called them trade tech, because it’s a new thing. And we didn’t even call it digital platforms. So I want to commend the efforts of UAE and WEF to create this regulatory sandboxes and incubators. But as you do this work, I just want to give the three points of reality checks. While we find that trade tech can certainly help, sustaining solutions on the ground is something else. It’s not just the technology. There are many other things in play. So I just want to give you three things. I think we always think, ah, there’s no electricity in a lot of developing countries. electricity failure, internet failure, they all can be fixed. You know, this is for we are in 39 least-developed countries. These things can be fixed. The technology part is fixed. But extremely important to have the political buy-in to trade tech solutions. And especially if you are attempting to digitalize efforts of supporting governments, it’s extremely from the day one, you need a champion in the country. The trade minister, the prime minister has to be a champion. In Rwanda, it’s an amazing case for trade tech and also for tech to take hold because it is a precedent. I said, I want the country to be digital. It’s a presidential decree. So the first single window that we established was in Rwanda. And it was because of, you know, that championship. And I think we also, please, ensure that your solutions have a component of training IT staff to adapt the system. Because you cannot have a one system, just here it is, and now you, you know, take it on board. It will not work. You need to adapt the system to the country’s needs. That means you need to be in the long haul training IT experts. And in our experience, what we find is when you train IT experts, they just leave the government or they just totally immigrate to Australia or someplace. So you have to use the system. Or Canada. Or Canada, where I come from. Or Australia. That’s true. Yeah. So that’s a long haul. That’s you need to, you cannot give solutions and move away. And then, please, the other thing is that, you know, I mean, we need, the countries need to own the solutions, tech solutions, if the tech solution has to be sustainable. So when we, I mean, for us it’s a bit easier, for the UN, because we train IT staff, we adapt the system to the country’s needs. and we hand over the source code. So it is not untied single window. It is Rwanda single window. It is Uganda single window, Angola’s customs automation program. But of course, in a private sector situation, you cannot go around and handing over source code. But you need to do these other things. Be aware that you need to be on the ground for the long haul. You cannot do systems and move away. Now, I think, Yasar, you talked about the cross-border issues. I mean, these are big. I mean, many of the work that we do, this is the automation, automating the domestic systems and national systems. And some talk to each other in the Comesa region, some sub-regional set up in Africa. But the big problem, as you said, is the data, cross-border data, big cross-border data governance issues, who own data, who have access to data, who owns data, who create intelligence out of this data, who make profit out of data. It’s a big issue. So the data governance is just out there. And there’s no solution, as we are. 19th century, we didn’t have that issue. So we don’t have anything to do with data governance. So I just want to stop here.

Moderator:
Thank you, Shamika. And I think this really nicely leads us over to the scaling of the sustainable technologies. So we heard a lot about that we have to make the reality check on the ground. I would like to hear from you, Jasper, the role of trade tech hubs like the UAE sees themselves. How could they enable and piloting new tech, but also taking into the consideration the points that Shamika just mentioned?

Yasar Jarrar:
Well, I would like to react to those notes first. And then I’ll mention the role that some place like the UAE, a place like the UAE, where a trade hub can play. One is that. I completely agree with you on everything you said. I think the challenge for us is they say all politics are local and by definition all trade is cross-border, right? So we can optimize as much as we want within one border. If we don’t figure out the whole cross-border issue, trade by definition is going to stall. So I think that’s a big challenge and I don’t really know where to start. In fact, some of the conversations we had with Sean and the team and Enes here in this building two days ago was where is this best discussed? Is it a trade issue? Is it a global digital connectivity issue? Is it ITC? Is it the UN? Where does governance of world infrastructure, data governance, cross-border transactions, because cross-border data transaction governance is not just a trade issue. It has security implications. It has so many other things. We saw in COVID how it’s a health issue as well. So where does this get discussed? And that’s something we’re all trying to figure out, I think, and start moving later on. The second thing, I’m struck more and more by this issue of skills. We heard, not just now from Shamika, but we heard from others, Erica from U.S. Steel the other day was saying, look, we have the technology for decarbonizing some of our steel, but it’s going to take us a good 30 years to retrain our stuff. Right? And we all saw this in a very microcosm of our companies when we all installed ERP and we got the Oracles and the others and we spent, you know, millions, if not more, installing a new system only for our employees to spend the next five years downloading ERP, uploading it into the Excel sheets that they’re used to, and it took about double the time to get people up to scratch. So there’s a whole lag there. But then, so what’s the role of places like the UAE, I think, being a trade hub? I think we’re connected to about 200 countries in terms of trade. We’ve got one of the busiest, top five or top three busiest ports in the whole world. We have logistics, air logistics, you know, Emirates Airlines and, you know, some nuggets like one in 20 vaccines flown over the world. overnight. It went through Emirates, right? We had to immediately set up a cold storage facility and we, you know, before you know it. So the one out of 20 vaccines thrown over the world just shows the agility and the speed that we are able to do. We didn’t have that facility for, you know, vaccine transport then, but it was. So a place like Emirates is a hub. It’s connected. It lives for trade. So I think it’s a great sandbox. Having the agility to produce regulations very quickly. The Dubai Customs Virtual Corridor is at best I would call a sandbox. We’re trying it out. There’s a couple of countries who are happy to try it out. And we issued the logistics passport trying to minimize, you know, paperless exchange of information. So there’s the ability and appetite to try these new things and say, look, we’re happy to try this out now if somebody has a great idea on the India-Dubai trade economic route. And if that works out, maybe others can adopt it. I think it requires a lot of agility because the question that is always on our mind and my mind when we discuss these things, and let me see if I can frame it more eloquently than my mumbling here is, you know, how adaptable are our regulations? How fast can we adapt regulations? We established something in the UAE under the Council of Ministers called Reg Lab. And it’s basically a regulation lab. And we were trying to experiment of new things that we think this is a great idea. Technology companies or MERS comes up to us and say, look, we’re operating in Dubai ports or Jabari and we want to try this out. And we look at our regulations and we think that’s not going to work. And if the idea is so good that the technology partner can show the benefits, which they have so far, the country now is very happy to issue a one-year temp regulation and say, play this out. It breaks all our rules, but we’ll give you the legal cover to do this and collect data with us. So it’s a regulation lab. And after one year, come back with the data. And if you actually did save 30% on this and 50% on that, Well, it would be very silly not to change our regulations for that. But because of the speed of technology and people like you moving, we simply can’t rely on our normal regulatory process to catch up. There’s just going to be a huge lag. We regulate things after things go wrong, right? We regulated drones after drones started stopping flights in airports, not a second before. And so we’re trying to be ahead. So I think it’s a global trade tech cross-border sandbox. I think I just made that up. But I think it fits what we’re trying to capture in the whole panel. And I think that’s what the UAE can bring and hopefully will engage with everyone to do on trade tech, specifically with the COP28 coming up in the UAE. So this nexus of trade tech, environment, green supply chains, just the momentum is just building up so fast that hopefully we can continue this conversation there with some of you.

Moderator:
Thank you, Dr. Jassar. So we’ve heard about your scaling efforts at the country level. Now looking again into the international level, and this is again for Shamika, UNCTAD as being the UN’s focal point for trade and development. In your experience, how can trade tech help to become more efficient, green, and inclusive for trade?

Shamika Sirimanne:
We have a report called Technology and Innovation Report, just came this year, 2023 March. We analyzed 17 frontier technologies, looking at the same four IR technologies that you talk about, AI, the 3D printing, Internet of Things, robotics, blockchain, and so forth. They represented about 1.5 trillion U.S. dollar market last year. and we predicted that it could grow over to 9.5 trillion US dollars by 2030, which is a jump of six times. And this is probably a vast underestimation because these technologies move very fast. So as you said, the AI, machine learning, big data analytics, they provide better predictions. Sahil, you went on talking about the network, you know, the effects and the predictions. They can help improve reliability, traceability, reduce delays, better risk management, provide predictive maintenance, optimize material use, reduce waste. I mean, really, there’s so much you can do. So some of this work that we are doing. IoT, I think one of you mentioned, the data collected from online connector center, you know, sensors, GPS tracking system can optimize, again, logistics, significantly reduce carbon emissions. I mean, this is a big game. But let me, I’m sorry that I’m always putting a damper after saying all these things. Let me also say, so in this report, we also said we did a readiness index, you know, who are ready to benefit from these technologies. So we assess the ICT infrastructure, the skills and R&D, industrial capabilities, finance, into this, you know, mix. And we look at 166 countries for which we have data. Of course, who comes up? First, the U.S. First, followed by Sweden, Singapore, Switzerland, Netherlands, Korea, Germany, and the list goes. And we find especially African and Latin American countries at the very bottom of the list. For example, in Africa, the highest ranking country, South Africa, which ranks 56th place, Tunisia 66th, Morocco 70th. So that’s the situation. And I will not even go into the least developed countries. because they are off the list. But one of the things, the good thing is, we also find it’s not just how poor you are, how rich you are, but also how consciously you make policy. So for example, we find that the countries that have made deliberate policy changes and made critical investments, they have managed to vastly outperform in rankings and compared to their GDP per capita, for example. Now, India remains the greatest over-performer, ranking 67 positions better than if you just look at their GDP per capita, and followed by the Philippines, jumped 54 places, the gap between their capabilities and what they do, and the Vietnam, 44%. And all these countries, and we went deeper and deeper into these countries, what exactly did they do to over-perform? So for India, it’s the R&D and ICT capabilities, the skills development, the Philippines and Vietnam, because of the industrial performance, the FDI in high-tech manufacturing, particularly electronics, and they have created this enabling environment for multinational companies to come in. So the good news here is things can be done, even with great difficulties. And the policies matter, governments matter. So maybe that’s the good note.

Moderator:
Thank you, Shamika. But this also means that it’s about collaboration and wider collaboration to help adopt these technologies. So maybe going back to you, Sahil, what are your thoughts on the question of how can the wider collaboration help adopt those technologies at scale? Thank you.

Sahil Kothadia:
Collaborations is a cornerstone of every supply, within the supply chain ecosystem, right? If supply chains and the ecosystem does not collaborate, then you don’t get exchange of information, exchange of data. And that then leads to a siloed of processes culminating into when disruptions occur, then they have a massive impact, right? And so, and again, one of the things that we look at is how suppliers can collaborate on providing data and information right up the chain to their customers. And sometimes that creates an impediment, like, for example, some of the, if the supplier is based in an EU, then GDPR comes into, generally would, that is one of the causes of concern then they have to basically get all of the legal involved and so on and so forth before they are able to even provide the fact that this is their site location in a particular country in Europe, because that data is going to be stored in a cloud somewhere in the US, right? But having said that, having said that, over the last 12 years, what we have seen is companies are ready to collaborate, ready to share information, right? Because once they start sharing data, A, you get an understanding, as I said previously, of the network, how complex or how simple the supply chain network is. That then gives you an understanding of how to optimize some of the transportation and routing. Logistics can be optimized. You can do scenario planning, right? You can do a what-if scenario. This all is dependent on how collaborative the entire ecosystem is, without the collaboration between companies, small and big. Their customers, the suppliers, that the entire chain depends on the customer or their final product. If they are able to do a what-if scenario, taking in, collaborating with their suppliers, then they will be able to better manage and organize and make the supply chains greener and more sustainable. Again, collaboration will lead to risk-based inventory management. You don’t have to look at investing in inventory for, say, 20% of the suppliers where there is 80% of spend. What you should be doing is you should be looking at your entire supply chain and understand the risk, understand where you are sourcing what from where. That way, you don’t have to basically then lock in your investment in those 20% of the suppliers. You can distribute your investment across your entire supply chain, therefore optimizing the cost of managing risk, which again goes into, as they say, every little helps. If you are able to optimize the risk, then you are contributing to that sustainable supply chain and a greener supply chain. So, yes, collaboration is the cornerstone within the supply chain ecosystem. Thank you so much. It’s also good to hear that companies are ready to share data, but it’s really good news. Well, yes, but it takes a lot of effort and eventually they come around, right? It takes a lot of effort. It takes a lot of education. It takes why this is required because a small mom-and-pop shop does not really understand. They are far disconnected from the bigger manufacturers, but once they understand that, then yes, they are ready to collaborate and contribute to that.

Moderator:
That’s good to know. Angel, in your opinion, what do you think are the barriers for technology to be used at scale?

Angel Donev:
It’s a fascinating question. I spend a lot of time thinking about it, right? Because, and I’ll repeat it, we don’t have a technology problem. Clearly, the technology is there. We have all the technology that we need. We don’t have a technology problem. We have a change management problem, right? And the change management goes into aspects, right? We spoke briefly about policy and briefly about people. But those two elements we need to really solve for. And honestly, the number of hours that I have spent thinking about it, look, what examples we can take, where we can learn where we have actually managed to crack this problem. And the only example that I can come up, that comes to anywhere closer to what we need to do here, is the rollout of the Internet. Like, if you think about it as an example, how did it work? Like, how did it, it started with a few universities connected, but now everybody’s connected. Right? How did this happen over the last 20, 30 years? What we can learn from there? And I think there are a couple of things that we can learn from there. First of all, is you need to have incredibly well-defined standards. Like, we need to unite behind a standard. Like, if you think about the Internet, those were how the IP addresses work, how the DNSs will work, and the basic technology standards around this. Published, agreed by a few, small group of people, but very well thought through. Right? To cater for the different cases. Okay, we have the standard. And what’s the second problem? The second problem is you cannot dictate globally. You cannot say you all need to get there. This doesn’t work. The Internet provided flexibility for this. It allowed everybody to connect on their own time when they were ready to do so, the next university, the next country, the next station, whatever it was. There was no centrally mandated thing that you need to roll out, neither the benefit of the technology was limited on the extent of the network covered. Everybody that was connected started benefiting immediately from the increased connectivity. And the benefit case was 1000x, so it outweighed any decisions or hassles and barriers and people were motivated to do so. And honestly, this is the only example where I can think of how we can approach this global trade tech problem at a scale. And this will solve, I think, part of the how, right? Then the change management on the ground that needs to be executed should not be neglected as well. I’m previewed to some of the, like you said, the legislation of the 19th century, I think goes even further back, like the famous Bill of Lading. Change management is a good example of this. We need this legislation, but the legislation goes to so many different parts, like even if you take the unions in the US, right? How do you execute change management on the process of executing of the terminals? And this is like a presidential topic. It cannot be solved in one state, like it’s the whole United States. And it takes years to negotiate and change those things. And that’s what I’m saying. We need to figure out how every incremental connection to this global internet or global trade creates additional benefits so that we can decouple those constraints. Because if we wait for them to be lifted to make it work, it will be always chicken and yak problem. And last but not least, I think it will start from something small. It will start from a sandbox. It will start from few people connecting and creating outweighed benefits to what they see by using this network and thus creating incentive and exemplar for others to connect and do the same.

Moderator:
Thank you, Angel. That was very interesting insight. Obviously, when we are talking about green supply chains, we also have to touch upon regulations and emissions. So we have to look into this as well. Maybe, Dr. Jasar, when we discuss the role of government regulations, how can we close the gap between the tech disruption and the regulation phase?

Yasar Jarrar:
Well, I think that’s an unbelievably hard question we’re all trying to answer here. But I think there’s a bunch of things that the governments can do, and I think they are doing now some. Governments are very good at saying no, so preventing certain things from happening, which when there’s a danger to society, the governments have to look after their society, their national interests. And that’s sort of what’s been happening so far with a lot of technologies. But now we’re seeing interventions by way of incentives are moving forward. So this whole idea of people coming together through COP and putting incentives, carbon pricing, we all have nationally determined contributions, the NDCs. So governments are setting a sort of target that whether we like it or not, as companies or individuals, people will have to work toward that target. It’s not there yet. Enforcement is not there yet. God knows the stock take this year in COP28 will show that, bar maybe a few symbolic ones, we probably missed every target we set in France. But, nonetheless, governments can set incentives and targets, and people work towards that. I think the next version of this would be what you were talking about, Anjali, which is creating the benefits case. I mean, incentives are only so good—we all know people have taxes, but we all know people who avoid taxes. You could have carbon prices, and we saw the Guardian the other day covering these carbon certificates that 90 percent of them are worthless or something like that. So the incentives and the sort of punitive measures to push people towards change aren’t the best way. The rollout of the Internet is a great example, I think. I will quote you, but I will steal that example as well. But I will quote you. I think it’s because the benefits were 1,000x. When the benefits statement starts outweighing—and that’s what probably governments and maybe, like you said, sandboxes and places like that—if we show benefits of 1,000x, then there’ll be a FOMO, a sort of fear of missing out rollout here. We can’t not be part of the state system. If we’re trading between us and Ethiopia and India and saving so much money with shipping lines and doing it much faster, then everybody else would either be left behind, and nobody wants to be left behind. So I think the benefits is where we have to double down. Governments like to put the incentives and the punitive measures and the targets and the pricing, which are good, and I think it’s not either or. We need both. I don’t think we have figured out how to really expedite these benefits. Like you said, I think it takes one or two cases from the great work you’re doing. You can take three cases and say, look, they’ve saved 50%, they’re all better off now, and the system is available. I think while this session is about trade tech, your point is tech is not the issue. I think it’s almost everything else around tech that we have to figure out. Tech is there, and tech will continue to be there. Data providers, companies will. So I think that’s the question. So I think we’d love to discuss the benefits system instead of the punitive system. I don’t have the full answer yet, but I think these kind of… the kind of discussions that with something will be born out of it

Moderator:
thank you so much i think there is a still room for this discussion maybe not in this panel today but uh… i think it still interesting to focus on that uh… file on the topic of g h g and the scope re-emissions what do you think should companies be thinking about when it comes to the scope re-emission

Sahil Kothadia:
that’s a massive question for uh… a tech company to answer but uh… i’m going to try answering that question i mean again uh… g h g is that is a very crucial topic and i i was in the forum uh… in munich uh… to be a forum in munich on uh… or a resilient and sustainable automotives uh… value chains right and that there was a discussion on uh… how emissions and how the whole value chain should be looking towards uh… uh… producing greener steels and so on and so forth but few things that uh… companies could consider uh… with regards to scope three is uh… they should basically understand uh… that uh… the categories uh… of scope three for example uh… where they are purchasing their goods from what goods they are purchasing uh… and services as well uh… transportation uh… distribution and distribution waste management right uh… even to the extent of understanding business travel uh… employees commuting to their uh… work uh… workplaces right all of the they should understand the categorization and and by the way they don’t they don’t need to boil the ocean they have to start somewhere focus on some of these things that they can work with and then start doing that and and then what they should do is they should basically look at uh… supplier engagement and collaboration as uh… again that that’s again a very very big point engage uh… with the suppliers right uh… to collect their data for for for emissions and work collaboratively with them. If the supplier is small and if they need any support from a bigger manufacturer, support them in any shape or form that they can to ensure that that supplier is able to contribute towards a greener ecosystem, right? Again, supply chain optimizations, right? When you map your networks of your supply chain, then as a company, you would basically look at whether you can start looking at scenario planning of supply chain A versus supply chain B, and once you start doing that, you get an understanding of which is the greener of the two or three supply chain options that you have. And that’s another, I mean, again, changing supply chains does take time, but if you start, then you can put in, say, tactical and then strategic measures to ensure that you have a better control on GGs, right? Again, set clear boundaries in your value chain, i.e. you look at, you should be looking at how far up the supply chain, do you go right up to the raw material extraction or how much down into the supply chain that you go, i.e. disposing of your products, right? So all of that has to be considered as well. But again, all of this, again, there are think tanks who are working on this, but again, for a company like Resolink, we believe that as long as the companies are able to effectively collect data, and one of the other, collect data and report on that, that is the start of ensuring, that is the start to contribute to better control on GHGs, right? And the last but not the least, regulations. Personally, I believe that there are too many regulations, too many reporting formats that companies have to go through, and from what I have heard, it is too much of a burden for them to be reporting in multiple formats, multiple reporting structures, and so on and so forth. And the other thing that we have been hearing is that within companies themselves, the sustainability group is disconnected with the people who manage the operations. And that, to me, is a key. Sustainability people within the organization should be very well connected with the people who manage the day-to-day operations and the manufacturing to be able to effectively control GHG.

Moderator:
Thank you, Sahil. So you spoke about the burden of reporting, which I think also comes clearly at a cost. So greener supply chain at a cost, are the participants in the ecosystem and the clients ready to pay the bill? Angel, what is your thought on that?

Angel Donev:
I think the wind is changing for the positive. What evidence do I have is around 2% of all the cargo that we carry already is prepaid on alternative fuel sources. So it’s not only about words. People actually give their money, and this comes at a 10% premium compared to a normal rate. So people started voting with their wallet rather than just words. And you can see it from the actual bookings that people place and what kind of fuel choices they make. The other big evidence is that you have companies like Apple, like they announced their new products the other day. The level of emphasis on carbon neutrality and so on was huge. It was the first time that they go that big. One could believe that they do it out of the goodness of their heart as an enterprise. The other is that they are very good in tracking the consumer sentiment, which means that consumers around the world, especially in more sophisticated markets, more profitable markets, are starting to put in actual pressure, make consumer choices based on evidence, brand awareness, brand positioning against their sustainability initiatives, sustainability posture, environmental care, and so on. This will definitely help. It will take some time, and I understand that all consumers are not privileged enough where they can make a choice to pay a premium to source goods and products that they have being produced sustainably, but some can, and this is one part of the equation. The second part of the equation goes against the policy. There will be a need for some penalties and carbon taxes to drive change at scale and to even out the playing field, and this year, like what the International Maritime Organization did and committed to, the terms are not clear, but it was a big step. It was a very big step, and the sooner we do it, the sooner it will start being implemented. No mistakes made. We as consumers will pay the price. Everybody will pass it down, and there was a BCG study a couple of years back. which was saying that the total cost of consumer will be uplift of like cost of living with around 4%. So when you break it down to a consumer level, I don’t think it’s like nobody likes increasing their expenses, but it’s not a deal breaker.

Moderator:
Thank you so much, Angel. I think we are almost running out of time, so I can just allow one sentence.

Yasar Jarrar:
One sentence about it. I think the issue of 4% uplift in cost should be touted a bit more, because I think this is not a consumer uplift. There’s almost an insurance against the coming future. I mean, if you see what’s happening to our world and the heat and the floods, it’s a very, very little price for insurance for a better future. So I think we should fix the narrative. But what governments can do with that 10% premium, I just wanted to mention that Director General Ngozi on day one opened the chat by talking about government procurement, which is about anywhere between 13% to 20% of global GDP. Governments can switch their procurement standards very quickly towards everything green, right? They can have a 10-year plan to absorb that, and they can negotiate better rates and better premiums, because if you get the scale from governments, then you probably will put a smaller premium. So I think government procurement can, you know, the law of diffusion of innovation, can just literally take us out of the 15% overnight if they decide to. So maybe that’s an area where Ngozi called for, but we should all end on reminding ourselves that governments can literally take this to a breakthrough. So you got excited about that, so I had to show you that.

Moderator:
Thank you, Dr. Jasak. No, but Shamika, I saw you also would like to comment, and the question maybe for you is also then, how can we find the balance between achieving the sustainability, but on the same time also accommodating the special needs of developing countries?

Shamika Sirimanne:
Thank you. I mean, we all know the nature of these technologies are that they are all digital. Because they’re digital, they move very, very fast. They combine. They create new things. They move very fast. So the windows of opportunity for many developing countries is very small. So you need to jump in when the windows are open. And they are open for a very short period of time. So two things. One is it’s very important to have this sort of a conversation about trade tech. So I’m very happy that you have it. I’m very happy that you’re working on the sandboxes, incubators. But please share these. And I know we have a Trade Facilitation Innovation Day starting next Monday, 19 to 20 September. We jointly organize this UNCTAD and the Global Alliance for Trade Facilitation. So I invite you, good ideas, showcase the sandbox things that you do, the pilot showcase. The second big point for developing countries and for everybody is that this issue that we all raise is the data governance, the cross-border data governance. This is the elephant in the room. And this is why we could not sue the e-bill of landing. It did not fly. Because when it comes to cross-border data, there are many issues of who owns the data, who have access to data, who makes intelligence out of data. Because they’re the ones who are going to profit from this data driven economy. And as you said, Yasar, cross-border data is not just a trade issue. It’s a human rights issue. It’s a climate change issue. Like when we saw that the COVID-19 vaccine was developed, that immediately the gene, genome of the virus was shared among vast numbers of scientists. And that’s cross-border data. So there’s a lot of development, social angles when it comes to climate change, the predictions. So you need to have a whole governance system. What we now have, we have the US. system of governance, but basically led by private sector, and you have the GDPR, very much the human, you know, the people on their data. And then in the middle, I mean, on the other side, we have the Chinese governance system. It is very much the public sector driven. And we need to build interoperability. They may not change because they are, these governance systems are based on their political systems, their socioeconomic aspirations. They are not going to change, but we need to build interoperability into these various governance systems. And that has to be done in a much bigger scale, and it is not just a trade issue. So here, I’d like to invite all of you to come to UNCTAD’s e-week, which is happening in December, 4th of December, and there will be a conversation around data governance. We will have the tech envoy from the United Nations descending here, the digital corporation, the digital corporation that will take hold here, so there will be a lot of discussion about data governance. So I do invite you to come because it has to be a global conversation to build interoperability to different systems. Thank you.

Moderator:
Thank you, Shamika. And I think these were really interesting last thoughts. Maybe from each panelist, also of the interest of time, maybe in one sentence, what should be the priority to advance trade tech for a greener supply chain and logistics? Maybe you start, Shamika. Thank you. And maybe Andrzej.

Angel Donev:
Yeah. I would say it’s really hard to pick one thing, right, to make progress, but I think we need to feel around policy that evens out the playing field for everybody.

Sahil Kothadia:
I think policy and regulation should make an even playing field for policies and regulation. I think that should help. That’s where the focus should be.

Yasar Jarrar:
I think you’re seeing blank stares from all of us because it’s a really tough question, but I think this is probably the only, you know, in recent history, the only place where I think the public’s private sector is far, far, far more advanced in what they know and what they do than the governments. So I think this is probably the time to establish some sort of public-private regulatory global body. I think keeping the private sector out of global meetings like this is quite, I think we are so behind what they’re doing. If Google and SAP and others were actually the CEO sitting here, they would have, they would be about ten years probably ahead of our conversations. So I think it’s time for a PP regulatory system, figuring something out. I just think it’s about, I don’t think there’s a way out as governments.

Moderator:
Thank you so much. I think this was really valuable and we heard a lot of insights, so thank you all for being part of this panel and I’m wishing you a fruitful day ahead. And thanks for being here. Thank you.

Audience

The discussions revolved around several key topics, including the initiatives taken by the ICT sector to reduce carbon emissions and mitigate their environmental impact. The sector has been sourcing renewable energy through long-lasting contracts with suppliers, building efficient data centres that run on renewable energies, and replacing old networks with fibre for increased energy efficiency. These efforts have been praised and are seen as positive steps towards addressing climate change.

Another area of focus was the ongoing and more efficient review of the WTO telecoms agreement. It was argued that enhancing the effectiveness of regulators can lead to well-regulated markets and lower prices, ultimately benefiting users in terms of affordability and choice. The sentiment towards this topic was positive, highlighting the potential positive impact of such a review.

The discussion also touched upon the importance of the Internet as a global public good. It was highlighted that 51% of the world population is currently connected to the Internet, demonstrating its widespread reach and impact. There was a consensus that the Internet should remain globally accessible and not be fragmented, as this is seen as vital for fostering innovation, enabling connectivity, and promoting economic growth. However, there was opposition expressed towards the fragmentation of the Internet, with concerns raised about the potential negative consequences of such a development.

When it came to WTO policies, the impact on local transitions was deemed a neutral topic, with a desire to understand the correlation between WTO’s policies and local/domestic initiatives. This reflects a need for further exploration and analysis of the effects of such policies on local economies.

Furthermore, there was a negative sentiment towards the control of foreign corporations in sectors without permanent commitments. The argument put forth was that countries should have the flexibility to control the participation of foreign corporations in their sectors without being bound by permanent commitments. Bolivian hospital services’ commitment under WTO rules was mentioned as an example, resulting in decreased autonomy due to the inability to withdraw commitment.

The continuation of the moratorium on electronic transmission tariffs also received criticism, as it has led to significant revenue losses for developing countries. It was noted that developing countries and least developed countries (LDCs) lost approximately 56 billion US dollars in tariff revenue from 2017 to 2020. Moreover, major corporations not having to pay taxes on their profits made in developing countries further compounded the issue. This negative sentiment underscores the need to reassess the impact of the moratorium on developing economies.

The discussions also revealed opposition to the plurilateral Joint Statement Initiative on E-commerce being negotiated in the WTO. It was highlighted that multilateral discussions on e-commerce were rejected at the Buenos Aires Ministerial, and there was a concern that multilateral resources of the WTO were being directed towards plurilateral discussions instead. This negative sentiment towards the initiative reflected a desire for a more inclusive approach and a focus on reducing inequalities.

Developing countries’ needs for resources and financing for infrastructure and skills development related to e-commerce were considered a neutral topic. This highlighted the recognition of the importance of supporting developing countries in their efforts to leverage e-commerce for economic growth and development.

There was also a negative sentiment expressed towards the role of UNCTAD (United Nations Conference on Trade and Development) in capacity building on e-commerce. It was argued that UNCTAD, as a neutral arbiter, should focus on advocating for rules beneficial to developing countries instead of favouring big tech and rich countries. This reflects a concern that the needs of developing countries might not be adequately represented or prioritised in the current discourse.

Overall, the discussions provided a comprehensive overview of the various perspectives and concerns surrounding the ICT sector, internet access, WTO policies, and e-commerce. The sentiments expressed highlighted a mix of positive, negative, and neutral views, underscoring the complexity and diverse range of opinions on these important topics.

Antonia Kartzigana

The World Trade Organization (WTO) plays a central role in digital trade discussions, focusing on areas such as electronic commerce and inclusivity. The WTO’s services agreement provides insurance against policy reversals in digital sectors, ensuring stability for businesses.

The work program on electronic commerce, established in 1998, allows WTO members to avoid imposing customs duties on electronic transmissions. This promotes the free flow of information, bridging the digital divide and supporting developing countries.

The Joint Statement Initiative (JSI) on electronic commerce involves 89 participating members working to build upon existing WTO rules and ensuring inclusivity for developing countries. Participating in global trade discussions allows developing countries to have their concerns represented and contribute to the rules that impact them.

Bindings in trade agreements offer certainty and predictability, attracting investment and providing market access. Developed countries have undertaken more bindings, supporting smaller players.

The moratorium on electronic transmissions exempting them from customs duties has been a topic of discussion, with studies highlighting limited impacts that vary across specific countries.

Recognizing the importance of digital inputs, the WTO acknowledges their role in the development of digital and green economies. Duties on digital inputs can hinder growth in these sectors.

Overall, the WTO’s efforts in the digital sphere, including services agreement, work program on electronic commerce, and JSI, shape global digital trade policies. They prioritize inclusivity, address concerns of developing countries, and promote certainty in trade agreements. The impact of the moratorium on electronic transmissions and the role of digital inputs are also recognized. The WTO works towards a digital future that promotes growth, reduces inequalities, and fosters partnerships for sustainable development.

Yasmin Ismail

The analysis highlights various key points related to achieving twin transitions and the importance of collaboration and coordination among policymakers. One key point raised by UNCTAD is the need for a twin transition, which involves both the digital and green transitions. To successfully accomplish this, policymakers must work together and break down silos. This collaboration is essential to ensure a smooth transition that encompasses various sectors and areas, such as technology, economy, and policymaking.

Another important aspect identified is the significance of empowering national expertise. It is argued that domestic academia, researchers, and tech experts possess a better understanding of the local context. Therefore, investment should be made in leveraging local resources and knowledge to empower national expertise. This approach would enable countries to address challenges effectively and devise strategies that align with their specific circumstances.

The analysis also emphasizes the need to promote digital and environmental literacy, particularly among the younger generation known as Generation Z and Alpha. These young individuals are more aware of environmental issues and require access to online resources and digital tools to enhance their understanding and contribute towards sustainable development efforts.

Furthermore, the development of robust digital and eco-friendly infrastructure is deemed crucial. It is suggested that by investing in such infrastructure, countries can meet the demands of the twin transition effectively. Additionally, adopting green public procurement practices can stimulate demand for green products and services, thereby contributing to the overall sustainability agenda.

Reskilling the workforce is another important consideration highlighted in the analysis. A study by Microsoft estimates the emergence of numerous technology-oriented jobs by 2025, indicating the need for prioritising upskilling initiatives. By providing individuals with the necessary skills, they can enhance their employability and successfully adapt to the changing needs of the future workforce.

The analysis also underscores the importance of inclusive and innovative funding mechanisms for small and medium-sized enterprises (SMEs). These mechanisms can support the growth and development of SMEs, ensuring their financial access and reducing inequalities in the economic landscape.

Trade policies also play a crucial role in facilitating the twin transition. It is argued that trade policies should enable access to technologies, goods, and services required for the transition. Countries need to prioritise their specific needs and align their trade policies accordingly to effectively integrate into the twin transition process.

The inclusion of the twin transition in bilateral and regional trade agreements is deemed necessary for successful implementation. It is suggested that these agreements should incorporate provisions that address both digital and green transitions. Moreover, the innovation of technology transfer frameworks is seen as crucial in facilitating knowledge exchange and collaboration among countries.

The analysis also examines the work programme on electronic commerce, recognising its focus on development. However, it raises concern over the absence of the African continent from the Joint Statement Initiatives (JSIs). This observation signifies that not all developing countries are adequately represented, highlighting the need for more inclusive participation and collaboration.

Lastly, the analysis draws attention to the environmental impact of e-commerce. It is noted that the text lacks proposals addressing this environmental concern. The impacts of e-commerce on the environment should be investigated more thoroughly, and appropriate measures need to be implemented to mitigate negative effects.

In conclusion, the analysis highlights the importance of breaking silos, leveraging national expertise, promoting digital and environmental literacy, developing robust infrastructure, reskilling the workforce, ensuring financial access for SMEs, enabling trade policies, and addressing the environmental impact of e-commerce to achieve twin transitions successfully. By considering these factors and implementing appropriate strategies, countries can foster sustainable development and contribute to the attainment of relevant Sustainable Development Goals (SDGs).

Jane Drake Bruckman

Digital technologies have the potential to significantly contribute to achieving sustainability goals. According to the Global Enabling Sustainability Initiative, 103 out of the 169 sustainable development goals can be directly influenced by digital technologies. The deployment of existing digital technologies is projected to accelerate progress in sustainability by 22% and mitigate downward trends by 23%.

Digital tools have a wide range of applications in various sectors, such as monitoring energy efficiency, facilitating the reuse of components and materials for the circular economy, and managing traffic. These tools also play a significant role in the agricultural sector by helping farmers reduce water and fertilizer consumption.

Governments are recognising the positive impact of information and communication technology (ICT) and internet connectivity on climate action and energy improvement. For instance, the Philippines is emphasising the role of ICT in its efforts to address climate change and improve energy efficiency.

Additionally, digital technologies improve efficiency and productivity across diverse sectors, including manufacturing, construction, and agriculture. Bridging the digital divide requires the development of digital skills, infrastructure, and suitable regulatory frameworks. It is crucial not to miss opportunities to utilise digital technologies in solving global problems.

In conclusion, digital technologies offer immense potential for achieving sustainability goals. They can drive progress in sustainability, promote efficient resource use, and facilitate the transition to a circular economy. It is important for governments to recognise the importance of ICT and internet connectivity in addressing climate action and energy improvement. Bridging the digital divide and promoting cooperation are key to maximising the benefits of digital technologies and addressing global challenges.

Mehmed Sait Akman

The analysis explores the complex relationship between digital transformation and sustainability, highlighting several key points. Firstly, it reveals the existence of a digital divide between developed and developing countries. The study emphasizes that although internet access is crucial, it alone is insufficient to bridge this divide. More developed regions within countries tend to have better connectivity than less developed areas. This digital divide contributes to income inequality and poverty as individuals in less connected areas miss out on economic opportunities provided by digital technologies.

Another important aspect is the interconnectedness of digital and green transformations. The analysis underscores the role of digital technologies in reducing greenhouse gas emissions and optimizing energy use. These technologies can aid in the transition to renewable energy sources and provide platforms for the trading of renewable energy credits. Engagement of small and medium-sized enterprises (SMEs) is essential for sustainable practices in the green production process. The analysis emphasizes that both digital and green transformations are vital and mutually dependent for a sustainable future.

Additionally, the study notes that improvements in digital technology alone do not guarantee the achievement of sustainability goals. Deliberate decisions and actions are required to ensure that digital transformation aligns with sustainability objectives. This deliberate approach highlights the need to consider the impact of digitalization on climate and work towards climate-beneficial digitalization.

Furthermore, the analysis stresses the importance of establishing a regulatory framework and robust infrastructure to enable access to digital technologies. It suggests that reliable infrastructure is necessary for effective digital transformation. Moreover, the low percentage of financing for information and communication technology (ICT) by multilateral development banks highlights the need for increased investment in this area.

The analysis emphasizes the concept of global digital public goods, which are seen as crucial for bridging the digital divide. Digital public infrastructure plays a critical role in achieving this goal. Additionally, it underscores the importance of empowering individuals through digital skills and knowledge, with a focus on integrating these skills into education and training programs.

The analysis also highlights the significance of domestic policies and regulations in trade, particularly in the context of the digital and green economies. It argues that trade policy should begin at home, suggesting that domestic-level decisions and actions play a significant role in shaping these economies.

Finally, the analysis suggests that international efforts should prioritize the regulation of emerging technologies like artificial intelligence (AI), which may have negative externalities. It advocates for a thorough examination of the potential risks and consequences associated with AI, and the implementation of regulatory measures to mitigate these effects.

In conclusion, the analysis focuses on the existence of a digital divide and its impact on income inequality and poverty. It underscores the interconnectedness of digital and green transformations, emphasizing the importance of deliberate decisions and actions to align digital transformation with sustainability objectives. The analysis also highlights the significance of establishing a regulatory framework and infrastructure for digital access, along with the role of global digital public goods. Additionally, it addresses the importance of equipping future generations with the necessary knowledge and skills to navigate the challenges and opportunities of the green and digital economies. Finally, it highlights the need for international regulation of emerging technologies to effectively manage potential risks.

Moderator – Ayşegül Şahinoğlu Yerdeş

The analysis highlights the pivotal role of digitalization in driving decarbonization efforts and promoting a green transformation. According to the World Trade Organization (WTO)’s 2022 World Trade Report titled “Climate Change and International Trade,” digitalization is recognized as a significant driver of decarbonization. This acknowledgement underscores the positive impact of digital technologies in reducing greenhouse gas emissions.

Moreover, the analysis reveals that existing digital technologies are contributing to shrinking the carbon footprint in key sectors, including energy, transport, manufacturing, construction, and agriculture. Investments in digital technologies facilitating green transitions have also seen substantial growth. These findings emphasize the interconnection between digital and green transitions, showcasing how digital technologies can contribute to achieving sustainability goals.

However, the analysis also highlights a pressing challenge, the digital divide between developed and developing countries. Bridging this divide is crucial as it can impede progress towards sustainable development. The report points out that the digital divide disproportionately affects certain groups, such as women, youth, farmers, and businesses in remote locations. Therefore, reducing this divide is essential for promoting inclusivity and ensuring equitable access to digital benefits for all.

The analysis emphasizes the importance of the WTO in discussions related to digital transformation and the green economy. However, it also reveals a dearth of in-depth discussions on the interaction between digital transformation and the environment within the organization. There is a need for more comprehensive dialogue and collaboration between the fields of digital transformation and environmental sustainability within the WTO to address this gap.

Additionally, the report highlights the potential of digital technologies to counterweigh negative environmental externalities. Despite accounting for only 1.4% of global carbon emissions, the ICT sector contributes to reducing greenhouse gas intensity across the entire economy. The growth in emissions from the sector is projected to be offset by energy efficiencies and increased use of renewables. This underscores the positive role that digital technologies can play in promoting responsible consumption and production.

In conclusion, the analysis underscores the significance of digitalization in driving decarbonization efforts and promoting green transformations. It emphasizes the need to address the digital divide, particularly in developing countries, and calls for the WTO to foster more comprehensive discussions and collaboration between the fields of digital transformation and environmental sustainability. Digital technologies have the potential to mitigate negative environmental impacts and contribute to the achievement of sustainable development goals.

Moderator – Ayşegül Şahinoğlu Yerdeş:
So, good afternoon, ladies and gentlemen, and welcome to this public forum session titled Bridging the Digital Gap for Transition to a Green Economy. This session is organized by Ministry of Trade of Turkey, and we thank you very much for joining us today. Let me first introduce myself. My name is Ayşegül Şahinoglu Yerdeş. I’m currently serving as the Deputy Permanent Representative in the Turkish Mission to the WTO. It will be an honor and pleasure for me to moderate this session. As the title speaks for itself, today we are going to discuss the complexity of the relationship between the green and the digital transition, as well as how to successfully navigate these two agendas for a sustainable future in a manner which is just inclusive and fair. As you know, we are currently at the time of an environmental crisis, which poses an existential threat on the humanity, and as you know, global efforts are continuing, which are translated into governments’ nationally determined contributions under the Paris Agreement or the Sustainable Development Goals under the UN. We are also at the same time in the midst of a digital revolution, if I may put it simply. The WTO’s 2022 World Trade Report, which was titled Climate Change and International Trade, acknowledged that digitalization acts as an important driver of decarbonization. This is a hot topic for consideration, and recently academia, civil society, international organizations and governments as well are carrying out extensive work on this issue. So parallel with this trend today in this session, We are aiming to similarly focus on the interplay between the digital and the environmental transformation and whether digital technologies can contribute to our green transformation. We will look also at what challenges lie ahead, especially the digital divide between the developed and the developing countries, and how to overcome this. What policies are required to unleash the transformative potential of the digital technologies on the environment? Of course, not the least, we will look at what role does the WTO play in all of these discussions. So, now, let me introduce our panelists. I’m delighted to have with us with such a distinguished panel composed of experts from academia, business, and civil society with government and international institution background. So, I would like to start first by Ms. Jane Drake-Bruckman. It will be fair to say that Jane is one of the outstanding experts in the field of trade and services and digital trade. She has served in the Commonwealth Secretariat, the OECD International Trade Center. She was also a Chief Economist with the Australian Department of Foreign Affairs and Trade and also served at the Australian Delegation to the EU in Brussels. She has prominent work in the academia as well. She taught macroeconomics at the Chinese University of Hong Kong and trade and services in the University of Adelaide. Last but not the least, she is a co-convener of the Asia-Pacific Services Coalition and also a founder of the Australian Services Roundtable where she is acting as the director at the moment. She is also a member of the G20 Trade and Investment Research Network. On my right side, our second panelist is Ms. Yasmin Ismail. She is a program officer at Cuts International Geneva. Since 2019, she has been leading Cuts research and technical assistance projects for delegations of developing countries in Geneva on e-commerce and the digital economy, particularly. Prior to joining Cuts, Yasmin served as project manager at Global Partners Governance Ltd., a UK-based international consultancy firm. She also served as international cooperation specialist at the Egyptian Cabinet Information and Decision Support Center. My third panelist on my left is Mr. Mehmet Said Akman. He is an associate professor of international trade and European integration. He is currently director at G20 Studies Center at the Economic Policy Research Foundation of Turkey, which is a leading policy think tank. He teaches as adjunct professor in the Middle East Technical University in Ankara, Turkey. He has substantial academic work in the field. In the past, he has been a visiting researcher at the European University Institute in Florence, London School of Economics, and at the Center for International Governance and Innovation in Canada. And like Jane, he is also a member of the steering committee of the G20 Trade and Investment Research Network. And finally, of course, but not the least, our fourth and final panelist will be Ms. Antonia Kartzigana. She is a counselor in the Trade and Services and Investment Division of the World Trade Organization. She has worked in the WTO since 1998. Currently, she is the secretary of the WTO Council for Trade and Services. deals among others with issues relating to movement of natural persons, e-commerce and air transport services. Antonia has published extensively on matters relating to trade and services and contributed to many conferences and academic seminars. Her work includes coordination of the WTO’s 2019 World Trade Report on the future of digital services trade. Having introduced our esteemed panelists, I would like to know that I’ve asked them to limit their presentations for 10 minutes and we will have our session for 1 hour and 15 minutes towards the end. Hopefully we will have time, we will have a Q&A session. Okay, so having said this, without further ado, I would like to turn to my first speaker, Ms. Jane Drake-Bruckman, to give us a glimpse of whether digital technologies provide solutions that can be conducive to green transformation. What examples you can give and the role of trade in this whole picture as well, we would like to hear from you. And Jane, please, the

Jane Drake Bruckman:
floor is yours. Thank you very much, Shagul. I’m delighted to be asked this question. We have a room full of experts who I’m sure have a lot of knowledge of the relationship between digitalization and the green transition. So I’m not going to present a PowerPoint and I just want to talk quite simply to this story of how digitalization, which let’s just define that as the emergence and adoption of digital technologies and associated digital tools, helps to make businesses more efficient and as a result is already having an evident impact. on productivity and competitiveness across every sector of economic activity in developed and developing countries alike. There is quite a strong emerging evidence base showing how the use of digital technologies can make it easier to achieve multiple objectives at once across many of the sustainable development goals, including by monitoring and helping achieve energy efficiency both in our homes and at the business level, by facilitating the reuse of components and materials for the circular economy, by managing traffic, by helping the agricultural sector to measure and reduce water and fertilizer consumption, by monitoring the climate and carbon emission reduction process and helping environmental mitigation activities of all kinds. All of these activities, of course, also require data, so trade for me is immediately a necessary part of this picture because trade in all the digital services which contribute to these activities, including cross-border flows of data and cross-border movement of natural persons with the expertise that these new technologies and new activities demand are all naturally part of the trading system. There has been some recent work by the industry itself, the ICT sector, if you like, and the telco sector in a new partnership called the Global Enabling Sustainability Initiative, which shows that across the 169 sustainable development goals, 103 of them are directly influenced by digital technologies. They did an analysis of 20 targets and indicators across all the SDGs and showed that the expected deployment of existing digital technologies will on average accelerate progress in sustainability by 22% and mitigate the downward trends by 23%. This is because the impact of digital technologies is not in any one particular sector, it’s economy wide. The big five, energy, transport, manufacturing, construction and agriculture, these tend to be singled out as the big five, biggest greenhouse gas emitters, are seen as key for any successful twinning of the green and the digital transitions. A recent European Commission report has drawn attention to the extent to which existing digital technologies will play a role in reducing these sectors carbon footprint and how new technologies, still emerging, still evolving, are going to be deployed to take the process further. So in the energy sector, what are we talking about, sensors, satellite data, blockchain, all of which can help strengthen energy security by improving forecasting of energy production and demand, preventing weather related disruptions, facilitating cross border exchanges. In transport, new generation of batteries and digital technologies like AI and Internet of Things will enable major shifts towards sustainability and multimodal mobility across all the modes of transport, even short distance aviation. In the manufacturing sector, digital twins, virtual counterparts of physical objects or processes using real time data and machine learning are all expected to improve. design, production and maintenance. In the construction sector which is one of the least digitally enabled of these five sectors in fact where there is room for much improvement, building information modelling which is now commonly deployed in architecture and engineering could really improve energy and water efficiency affecting design choice and the use of buildings and in agriculture, quantum computing plus bioinformatics can enhance the understanding of biological and chemical processes and help reduce the need for pesticides and fertilisers. Meanwhile, recent work by UNIDO has shown that this growing understanding of the role of digital technologies potential in the green transition is driving a massive surge in investment and innovation. It’s up about 60% in saving water, minimising waste, saving materials and up about 85% in saving energy. So as I see it, digital trade and investment, the joint development of digital standards and engagement in digital regulatory cooperation are all key ways in which the world can share digital technologies and bridge the digital and the development gap and meanwhile bring particular benefit to those with fewer opportunities in the offline marketplaces such as women, youth, farmers and businesses in remote locations. So in my part of the world, the UN Commission for Asia and Pacific has started to do some important work on measuring in the Asia-Pacific region the contribution that digitalisation and digital trade is making to all of the SDGs and there is, and I see Escab is here in the audience with us, but it is quite clear. that trade in digital services is facilitating the tracking and efficient use of resources, leading to reduced material footprints, digital finance is expanding access to trade and financial products, fostering innovation, driving the industrial diversification needed for success in the green economy, and reducing paper consumption through use of e-signatures, paperless trade and reduced travel. The examples are actually endless. I mean, no matter what it is you want to do, whether it’s water saving or building an eco-friendly urban environment, all of it requires smart energy systems. I think I should wind up quickly because time is passing and just say that it is important to note that obviously the ICT sector itself, including applications of AI, also, like all other economic activity, also uses inputs of energy and hence contributes to carbon emissions. The finger is often pointed, for example, at data centres as especially big energy users. But we should keep this in perspective, both in relative terms and in terms of the ICT sector in mitigating problems in more highly energy-intensive sectors. A very recent academic study has shown that ICT accounts for 1.4 per cent of global carbon emissions, 1.4 per cent. Data centres account for between 0.1 and 0.2 of global greenhouse gas emissions and between 2000 and 2018 the energy use in data centres increased, yes, it increased by 6 per cent, but in that same period of time computing workload increased by 550 per cent. That’s a pretty efficient use of data centres. Meanwhile, ICT is contributing to reducing greenhouse gas intensity right across the economy through remote sensing, systems optimisation and control, and predictive maintenance. So much so that the latest ITU study is forecasting that growth in emissions from the ICT sector will increasingly be balanced out. The net emissions will be balanced out by energy efficiencies and greater use of renewables. The last thing I’d like to tell you is that, of course, we can’t measure with any precision the exact amount of ICT and AI-induced savings in energy across the economy. But machine learning applications are already being deployed to start precisely measuring the footprint and the savings from digital technologies. So digital technologies themselves are going to help us measure that footprint of digital enablement. And I’ll leave it there for now, Aisha.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much, Jane. This was very useful in understanding how digital and green is connected. And you have set the stage for us to discuss more about how digitalisation agenda and environment agenda can work together. It was also very interesting that how digital technologies have the potential to balance the negative externalities as well. And you have also mentioned the digital divide. Speaking up on this, I would like to turn to my second panellist now, Mr. Sait Akman. Sait, I have a couple of questions for you. First of all, can you elaborate a bit more on the digital divide from the perspective of the developing countries? Why reducing the digital divide is important, especially in light of the environmental goals? What are the challenges to overcome this divide? And I would like to also ask you to share your views with us on how do you see the nexus between digital technologies and environmental transition?

Mehmed Sait Akman:
Thank you very much. Let me express my thank you very much again and for your kind invitation to this panel, which is actually bringing two major transformation process, digital transformation and environmental transformation, and how it will impact and how digitalization can help tackling climate change and environmental degradation. Of course, we have the third aspect, trade aspect, which I’m not going to go in detail because the next speaker, Antonia, will be dealing more about it. But in the title, you say digital gap, yes? Sometimes in the literature, we say digital gap, but sometimes we call it digital divide. It is often used to describe the gap between people who have access to reliable broadband or affordable internet services. But this is, I think, a definition that we have to review and maybe we have to redefine saying that digital divide refers to gap between demographics and regions that have access to modern ICT, that’s information and communication technologies, including not only internet and mobile phone, but all other. tools as we develop the digital technologies and those that do not. So the gap is constantly shifting as far as this access is concerned with the development of technology. You asked me about the developing economies. Yes, the developed economies are fairly better, but it doesn’t mean that we don’t have divide even in advanced economies among different parts of society and businesses. But the case in developing countries are even much, much, of course, not worthy. Maybe we go to the next slide or should I do it now? Okay. Well, if you just define it in terms of Internet access, that was one of the SDG targets under Topic 9 to have access to the Internet in least developed countries by 2020. And that has not been fulfilled very well. This year in India, it’s not only an access to Internet. Maybe we should benefit the digital technologies. There must be some digital dividends to be shared by all the digital technologies. In the New Delhi Leader’s Declaration, I noticed they had references to digital divide in different paragraphs, including the role of digital transformation, AI, data advances need to be addressed to mitigate the digital devices. And they also mentioned a topic called digital public infrastructure as an evolving concept. for bridging the digital divide. This is important, I think, and there is also the gender aspect. I mentioned about demography, but also the gender aspect. So the use of Internet is increasing, but in terms of bridging the device, I mean the digital device, there are differences, divides within the same country between the more developed parts of the country and the least developed parts of the country, including Turkey, including Bulgaria and some other countries. It’s getting narrower in more advanced economies, but developing countries also need to have more improvements in digital technologies to be accessed by all parts of the society. I don’t only mean individuals. I also mean undertakings, business, which are a part of this economic process and also the environmental process. So my first point in my PowerPoint, I have to show some points. I don’t know whether they’re powerful or not, but is Internet access enough to bridge the digital divide? Yes, there is a spread of Internet everyone uses, but still we need the access of SMEs, for example, small businesses and some other parts of the society. They need reliable widespread access to digital networks and services to reap the digital dividends. And therefore, as the UN High-Level Roadmap on Digital Cooperation observed, these technologies cannot be restricted to the idea of connectivity only, but it requires building digital ecosystems much larger, including data pools and public platforms. Otherwise, while the technologies are increasing, improving, but digital dividends, that’s the benefits of digitalization, are not fairly shared by the people in the world, by different parts of the societies, mainly for two reasons. The first one is that many people cannot participate effectively in the digital economy or in a meaningful way. The second reason is that these benefits are sometimes offset by emerging risks, like, for example, rising inequality, inequality in terms of access to digital technologies, because better educated, well-connected, and more capable have received most of the dividends and benefits, but these gains actually are circumscribed in that way. So this brings us to a kind of vicious circle. There is digital divide, which brings income inequality, because most people cannot use it efficiently, and becomes poverty, and poverty brings more digital divide. This vicious circle should be cut somehow. I will come to the environment part, but just one more, we should not only focus on the upper part, because in most of the declarations you see that digital divide should be bridged, making the internet more accessible, affordable, open, and safe. That is connectivity. But this is only one part of the story. The next is the dividends. So we need to split the benefits and reduce the risks. Which ways? This is important. I will come to this point in maybe the next slide. So I mentioned about two major transformations we are facing, digital and green transformations. So how to have a overlapping between two. That means how digital transformation can help green transformation. And this intersection should be enlarged, actually, where digital technologies should be used and regulations should be adopted in such a way to reduce the degradation, environmental degradation and mitigate the climate challenge and boost green growth. The next one, please. So for example, there are many views, one from ITU. Digital technologies could potentially slash global greenhouse emissions. Or Center for Climate and Energy Solutions, in their studies, they say that digitalization is a new opportunity to optimize energy use and decrease greenhouse gas emissions. Of course, there are a lot of works in the literature about how to reduce global greenhouse effect by using new technologies. The next one, please. This brings me to my second point. There are multiple ways for digital technologies to tackle climate action. Jane mentioned about some of them on a sectoral level. But sustainable and greener supply chains are important. I actually would like to take your attention to GVCs and their role in global economy. And ways for making them more greener will also help developing countries to bridge these dividends because digitally tracking the products, materials through supply chains will be much easier. Of course, the engagement of SMEs, especially in my country, in Turkey, is also very important in the green production process because this should not be only confined to big SMEs. industries. And of course, adoption of renewable energy, this is also important because digital markets can provide platforms for sale and purchase of renewable energy credits, which is a developing area in terms of financial markets. And we also can mention about circular economy, maybe we can put it circular carbon economy that is aiming to reduce waste and efficient use of resources. We can even enlarge the list through sustainable consumption, for example, of consumers. But before coming to consumers, most of the impact is through production on the climate and greenhouse effects. So we should be more concerned about value chains and SMEs and business undertakings and how they can be deployed to use more efficiently, how to harness digital technologies to make the production process more sustainable. There were a lot of initiatives in the world I see to bridge digital divide, including the Global Digital Solidarity Fund, which is actually claiming that this is a basic right for every individual to have access to digitalization, a way to enable people with reliable Internet. But of course, it is not only confined to Internet, we also have the UN Secretary General’s high-level roadmap for digital cooperation, which is actually important, I think, in unlocking the full potential of digital technologies and data to attain SDGs. And also related to environment, and in response to this UN Secretary General’s There are, I see, several initiatives like Coalition for Digital Environmental Sustainability or Climate Technology Center and Network which was hosted by UNEP, United Nations Environmental Program. UNEP actually is important because they have several digital transformation sub-programs that we should follow to reduce the emissions by one-fifth, for example, carbon dioxide emissions or use of natural resources in products by 90 percent. These are significant, but how to achieve them? Well, I should say as another point that achieving such global sustainability is not an inevitable outcome of digital transformation. When you have digital improvement, it does not directly bring you to such achieving the sustainability goals. It requires deliberate decisions and actions. So for example, in the leaders’ summit, they talked about digital public infrastructure. The technology can enable rapid transformation for bridging digital divide and accelerate inclusive and sustainable development. But this is actually an important point, but you know in G20 there are a lot of commitments, but how can we make them more actionable? This is important. They had a framework for systems of digital public infrastructure that Turkey and other developing countries should be reviewing from their perspective. Another point is the climate beneficial digitalization. So how to do this? It’s not only a reliable environment. This was also proposed in Business 2018. India, but infrastructure is important. Many times in their studies about the topic, World Bank and OECD mentioned about infrastructure and access is also important, but therefore this regulatory framework for access to digital technologies should be a concrete action with accountable institutions. My colleague Yasmin I think will provide some examples so I don’t go into detail, but also streamlining some funds. For example, multilateral development banks in that sense, for example, the ICT share of financing ICTs by the multilateral development banks is very low, only 1%, and aid for trade related to this only 1.2%, it’s too low. And of course another important thing to keep individuals more engaged with using technologies more effectively in the context of sustainability is how to utilize digital technologies, skills and knowledge. This brings me to my last point, digital global public goods. This is another evolving concept now, which means that digital infrastructure procured by public and can be a public good that anyone can use without charge, that’s non-excludable aspect of public goods, and without preventing others using it, non-rivalence for the SDGs. But of course we have challenges about digital global public goods, which I can mention maybe during our comments, I don’t want to go further. Lastly, I have some points which may make this digital green transformation more related to trade issues, but I leave it to Antonia as you will be talking about it. Thank you.

Moderator – Ayşegül Şahinoğlu Yerdeş:
very much. Thank you very important points that you touched upon. Reducing vulnerabilities of the of those that are falling behind especially the small and medium-sized enterprises and the importance of creating a digital ecosystem for them to thrive and to help them participate in the global value chains that are getting ever greener each day. It’s of paramount importance. We understand that a big challenge in this twin transformation is that it has to be fair, just and inclusive so that we can succeed. So building on what you have said so far I would like to now return to Yasmin. Yasmin, can you tell us some, can you tell us that what are the key actions for developing countries first to overcome the digital gap, second to make sure that digitalization agenda and environmental agenda can work together. Thank you so much Aishegul and

Yasmin Ismail:
thank you so much for the invitation to be on this panel with very distinguished experts from various fields. My presentation will be action-based and will be very let’s say brief and will focus only on what and if a developing country would like to like put an action plan now in order to run a digital and green transition, what are the headlines of its action plan and later on each country can fill in the gaps depending on the context. So next please. Action one, the economy will be digital and green so please wear the two hats, break the silos. We are witnessing what UNCTAD has called a twin transition So in my opinion, we need to bring the best national experts and minds on this from each country and we need to achieve both simultaneously if we want to catch up fast. So it requires strategies that run hand in hand and avoid contradictions. So simply put, policy makers need to wear the two hats and break the silos for a faster catch up. So economists, ICT policy makers, trade officials, negotiators, environment policy makers, climate change negotiators, please come together, consult, coordinate and break your silos. Next action please. We are also witnessing a dual transformation of the economy and we need expertise. We often tend to bring international expertise which no doubt has value but what I want to put forward here is that for this one, this transition, digital and green, defining the future of our economies, we need to empower our national sources. Empower your national academia, researchers, thought leaders, tech experts and entrepreneurs. They understand the specific context of the country more than anyone else, more than me and more than anyone else. Empower them and invest in them so they can propose contextualized solutions. Foster and invest in research and innovation in digital technology and green solution and support local universities, research institutions. tech start-ups to work on relevant projects to pull this transition together. So Saeed, good news, perhaps more money for you. Action three is promote digital and environmental literacy. And I would like you to just have some look at this photo. These are some children and look at what they are drawing. Solar panels for circularity, electric cars, our planet in the middle, there is no doubt that generation Z and generation alpha are more aware of the challenges related to the environment. And also, they are more apt with digital skills. My three-year-old son just broke up my password for my iPhone. So it is no secret. So empower them wherever they are to have access to online resources, master digital tools and utilize them for environmental sustainability. Empower them to secure their place in the digital and green economy of now and the future. Promote environmental education in the curriculum to raise awareness about sustainability and green practices among the younger generations. Next please. Infrastructure, key number one challenge, number one concern for all developing countries and I totally understand. Also for most least developed countries. And for a simultaneous transition, we need simultaneous infrastructure projects in digital and green infrastructure. We need robust digital infrastructure, including affordable and reliable high-speed Internet access across urban and rural areas. We also need eco-friendly infrastructure such as renewable energy projects, transportation systems like Jane said, and sustainable urban planning to reduce carbon emissions and promote a greener economy. If we need both, why not start optimizing from now? Embed green in digital, and digital in green. Adopt green public procurement to prioritize green solutions and stimulate demand for green products and services that will drive later on the economy. Think about the many countries that have already infrastructure projects running now. What about we review those contracts to ensure that we are using materials, resources invested that are more green and sustainable for the future, rather than just blaming each other later on? Action five. So for action five, a major concern for developing countries and these developed countries is the impact on the livelihood and the workforce, of course. When we hear technology, digital, we hear also automation, we get scared. What are we going to do with our labor force? How can we ensure they will have the livelihood? And the answer is upskill and reskill and upskill and reskill now. Not today, not tomorrow, and if you could do it yesterday, please do it, and maximize, put it a priority for your investments, but also for any aid that is being requested right now from the many donors and international organizations. A Microsoft study estimates that the global workforce can absorb around 149 million new technology-oriented jobs between 2020 and 2025. Yeah, a Microsoft study, we can, of course, everyone can bring up its own numbers. But we have no doubt, particularly after COVID-19, that this is coming anyway. Upscaling initiatives needs to be ambitious, to touch the various sectors and promote gender equality. This lady is in manufacturing and she’s doing very well handling 3D printing and other technologies. So please empower ladies as well and empower farmers in their fields to be able to engage in the future of the economy. Collaborate with the private sector, of course. It maximizes the resources, can help leverage resources, expertise to implement and to target large-scale projects, provide investment incentives in renewable energy and technology sectors. And we often forget the role of private sector towards the community and the society. Empower or maximize the benefits from corporate social responsibility. Encourage, support and channel those corporate social responsibility to address your objectives, sustainability and digital skills, challenges of relevant digital businesses. Next, please. As Saeed said, we need SMEs access to the business. We need them to access finance. Now, this is the hardest one, maybe, from where can I finance all of these actions? I totally understand. It’s not easy, but we need funding mechanisms, we need to promote financial access for small and medium businesses, and we need to support financial mechanisms for green technology. Encourage international organizations and developed countries to provide financial aid and technical assistance to support this. We need innovative and inclusive funding mechanisms, and I think the World Investment Forum that will be held in October this year will have a track focusing on innovative financing. I’m looking forward to it. Next, please. Action eight, adopt enabling rulebook. Now, all of the previous actions can be transformed into an enabling rulebook, but let’s add a little bit to it. What we can add is to ensure that trade policies are enabling as well, to ensure access to the needed technologies, goods and services, and allow competitive and affordable prices of the needed technologies, goods and services, and to revitalize the economy. Remember, each country is the master of its transition. It’s a gradual process that requires prioritization. This is why we need national experts and best minds to tell us which technology to start with, what technology we need next, and in which sector and why. Next, please. Action nine and the last one. All of the previous – so the ninth and final one is the need for the twin and digital – the twin of digital and green to be mainstreamed in trade relations to be part of the countries negotiated bilateral trade. agreements, and regional agreements. We need innovation in technology transfer frameworks and agreements. We currently need to reinvigorate discussions in the WTO on making technology transfer an effective tool for green transition in developing countries and LDCs. We need proactive special and differential treatment provisions that considers in every field the digital and green divide which developing countries need to leap. Finally, also aid for trade need to make a transition itself. We cannot transition alone without aid and support being provided elsewhere. We need aid for trade to be also having its own leap and have digital and green capacities and skills mainstreamed in every aid for trade initiative. It needs to also channel more funds for this twin transition in line with the principle of common but differentiated responsibility and respective capacities of the UNFCCC, especially if these initiatives contribute to global mitigation objectives. A final word, I once said to myself, or I was speaking one day, and I said green transition would be painful for developing countries and LDCs, and then I just stopped and realized it just shouldn’t be. We are here in order to understand how to make it as much as possible less painful to politicians, policy makers, experts, farmers, manufacturers, businessmen, women, everyone. Thank you so much.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much. That was a very comprehensive evaluation of how to succeed in this twin transition. You gave us very important key messages that this twin transformation requires a proactive and integrated approach. These messages are very valuable, especially for those of us who are in the policymaking side of things. But what you have also said didn’t go unnoticed. You have just gave the green light to the Generation Alpha and Z, not to raise their heads from their iPhones and laptops, so that will be our secret, I won’t say to your son. And the last thing that you referred to in your Action 9, you said that you mentioned the importance of mainstreaming digital and green transition goals in trade relations and cooperation. This brings me to Antonia. Antonia, can you walk us through how things work out in the WTO in terms of digital things, both in the GSI and in the multilateral front? Thank you.

Antonia Kartzigana:
Thank you very much. Good afternoon, everyone, and let me thank first at the outset the organizers, the Mission of Turkey for inviting me to be part of this very distinguished and very compelling panel of speakers. So I’m going to, you know, we had some already very interesting information about activities that are taking place in the international community in different fora. I’m going to focus on what is going on in the WTO, and I’m going to focus on what is happening in the digital sphere in particular. Next slide, please. So there are many potentially relevant areas of work, but I will focus on three. I will focus on the WTO rules for services trade and work that’s going on in that framework. Then I will look at what is happening multilaterally in what is known in the WTO as a work program on electronic commerce. And finally, I will say a few words about what is going on in the Plurilateral Joint Statement Initiative on Electronic Commerce. So if I start with what is happening in with services rules and services work, why am I talking about this particular area? Why have I chosen this particular area to focus on? The reason is that a fair number of services sectors are actually forming the backbone of the digital ecosystem. Just think about telecommunication services or computer and related services. They really enable a lot of the digital transformation. And trade policies in this particular sectors and many other relevant ones have an impact on how the digital economy can and does develop. For instance, they may promote a more open and more contestable telecommunications market and thereby foster affordability and improved quality of these backbone services for the digital transformation. Now, when it comes to the WTO framework, the services agreement offers the opportunity to WTO members to undertake legally binding commitments that bind the access conditions in specific services sectors. And what does this binding do? It guarantees, it provides an insurance policy, if you want, against policy reversals in these sectors that may actually be costly for the entire digital ecosystem. The reality is that WTO members have taken, you know, have not made use of this possibility of binding their access conditions for these backbone services in an even manner. And here I’m just giving you some examples. For example, only around 70% of WTO members have opened up or have guaranteed… The opening up of at least one segment of the telecom market to foreign competition and a little over two-thirds of them have only a little over two-thirds have also taken on board additional pro-competitive principles for the telecommunication sector. On the right-hand side, what you see is the extent of access that has been guaranteed by for example African countries in the telecommunications services sector under the WTO and it’s about half. So you see that on the left-hand side, the first four columns, it’s about half of what has been done generally by WTO members. So different level of bindings in sectors that form the backbone. For example, another example is computer and related services and there it’s around just over 60% of members that have undertaken relevant binding commitments guaranteeing access conditions. So this is where we are in terms of the rules, what is happening in terms of the work that is going on in this area. So there is work that is taking place in terms of, for instance, sharing of experiences. WTO members have been sharing experience about how they built digital capabilities in the services area. So the WTO services bodies have provided a forum for an exchange of information, exchange of experiences. Furthermore, there is a negotiating body that deals with trade and services and in that context WTO members have had exploratory discussions, not full-blown negotiations, but exploratory discussions on market access where they discuss precisely some of these aspects. Now these particular services have not come up for discussion, but the possibility exists to further address these particular sectors. So, let me turn now to the second area of work which is the Multilateral Work Program on Electronic Commerce. So, the work program was initially developed in 1998. If you think about it, there was for once maybe some foresight on the part of WTO members to look at an area that in the mid-90s was still relatively nascent. And under the work program, members, you know, essentially launched this and set three main parameters. One, they agreed on a definition of what is electronic commerce. Now, it’s a definition, it’s a terminology that reflects the times. At the time, essentially what we were doing on the internet was ordering online but not necessarily delivering online because broadband was still, you know, under development. But it’s a very broad definition, so it’s a very broad scope of interest. And then what they did also is they set up a program of work where various bodies, various committees in the WTO were mandated with the task of examining all trade-related issues that were relevant and related to electronic commerce. And given the wide definition of electronic commerce which goes from the production to the delivery of goods and services by electronic means, that provides a wide area for examination. And finally, and in that particular context, the needs, the financial and economic and development needs of developing countries were underlined as an area of particular focus in those discussions. And then finally, members agreed on what we call in the WTO moratorium a standstill where they agreed to continue the practice of not imposing customs duties on electronic transmissions. So this was 1998, where are we now? good 25 years later, first out of those discussions, so members were told, you know, given the mandate by ministers to look at what was the relationship between the existing set of rules and electronic commerce. And the general understanding that emerged from that process was that trade that happens over electronic means, essentially e-commerce falls within the scope of existing WTO agreements because those agreements do not distinguish based on the way in which goods and services are delivered. And then since 1998, WTO members have periodically agreed to continue both this work program, this deliberative track of work, as well as the moratorium. The latest such extension of work, if you want, was agreed at the 12th Ministerial Conference, which took place in June last year, where the work program was this discussion of topics of relevance was intensified, particularly with a focus on the development dimension. And the moratorium for this agreement not to impose or this commitment not to impose customs duties on electronic transmissions was extended until the next Ministerial Conference, which is scheduled to be held in February and or at the latest by the end of March of next year. Now in the context of this deliberation and this reinvigoration of the work program, what members have been doing, they’ve been engaged in dedicated discussions. And these dedicated discussions have touched on a number of issues where there’s been very substantive engagement on the part of the various members of the WTO. And areas of particular focus have included the digital divide, digital industrialization, and the issue of technology transfer will actually be discussed in a session next week. And, of course, the question of the moratorium has also been addressed. So let me move to the last area, main area of work when it comes to the digital sphere in the WTO, and that’s the Joint Statement Initiative on Electronic Commerce, which was launched first in terms of exploratory work in 2017. In 2019, it turned into a full negotiation, which started then, and it’s co-convened by Australia, Japan, and Singapore, with the aim of concluding a high-standard outcome with maximum participation of WTO members, and an outcome that builds on existing WTO rules. Currently, the initiative has 89 participating members. The list is there, and I’m not sure you can read, but there it is. And it is, however, open to all members to join, and progressively more members have actually joined this initiative. Now, again, the importance of being inclusive and looking at the digital side of things and the digital development side of things was stressed, and the co-conveners, so Australia, Japan, and Singapore, as well as Switzerland, have launched an e-commerce capacity-building framework, which is aimed at providing training and assistance to strengthen the digital inclusion of developing countries and least-developed countries. So this is, very quickly, I’m not going to go through the details, this is where the initiative is now. It addresses a number of topics, some on which technical work has advanced and more or less been concluded, and others on which work is actually ongoing. And it addresses many of the areas that also Jane was referring to in her earlier presentation. The aim is to substantially conclude these negotiations by the end of this year. So let me conclude. Before I do that, let me draw your attention to another initiative that the WTO Secretariat has recently taken, which is to partner with the World Bank with the objective of helping initially African countries and helping them in their efforts to harness the opportunities of digital trade in order to drive growth and development, and a development that’s inclusive and sustainable. So this initiative was started with the launch of a note in July, and then there will be engagement at the country level with those countries that show an interest and a willingness to participate. So to then conclude, as I said, various services sectors are really key to the digital transformation and the WTO provides a platform both for deliberation, for discussion, as well as for possible negotiation. And then, as I said, work in the organisation is proceeding at the moment on two main tracks, the multilateral track, both under the work programme and in the various committees, and the plurilateral track under the JSI negotiations, where participating members are of the view that existing rules should be updated and potentially clarified. And the final point is that the digital divide remains a concern across all areas of work. Let me stop there. Thank you very much.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much, Antonia. You have put an excellent summary of what has been discussed so far in the work programme and the JSI. And what we see from your presentation as well, and we know that while in the work programme or the JSI, members are speaking about the sustainability in terms of the development perspective, there are not much… discussing sustainability in terms of environmental aspect. So this brings me to the motto maybe Yasmin has just spelled out. She said that we have to break the silos. This is the same for the environment discussions that are going under this roof, whether be it in the committee of trade and environment or in the TESTI which is a plurilateral discussion group which there is not much discussion and engagement about the interaction between digital transformation and the environmental one. So at this stage I can while concluding say that it’s on us members to break these silos and start to work across these silos and discuss more this issue in depth. So with that I will leave this at that and I thank you very much all for these thought provoking interventions, submissions. So now I would like to turn the floor. We have like 10 minutes for the questions and answers so we can begin this session. And for those that would like to raise a question I would kindly ask them to introduce themselves, their name and the institution that they are affiliated with. So please, who would like to go first? Yes, the gentleman in the back.

Audience:
Yes, thank you very much. My name is Tilman Kupfer. I’m an independent consultant from Brussels but with a background in the telecoms industry. I just want to make a few points to complement things which have been said already. The one that’s been about… Thank you. the carbon abating potential of the ICT industry. So, and Jane Rockman already lined out very well what the effectiveness is here in this area. But I just want to stress also, it’s also the ICT sector itself, I mean at least those companies which are responsible are very active also in trying to or in mitigating their own emissions and there are various areas which, how they can do that. One is to source renewable energy through long-lasting contracts with suppliers of renewable energies. But then the other one is also in the data center space, for instance, building them in such an efficient way that they run on renewable energies themselves, solar power, but also cooling systems and so on. But then also replacing legacy networks, so the old copper networks and then replacing them with fiber also have tremendous efficiency on the energy consumption and efficiency of what the sector itself can perform. And I mean also this very exponential growth of what the ICT sector can deliver. I mean this is one area. The other one is about access and the question about digital divide and I think that brings us also back to the list of two points which are discussed in the e-commerce negotiations that Antonio mentioned. And here it’s probably also useful to point out that the review of the WTO telecoms agreement which dates from the 90s is on the table and that will also make that agreement maybe more efficient and enhance the effectiveness of regulators, for instance, and the better the markets are regulated in telecommunications also prices will go down and there’s more choice and affordability for users, whether those users are from business or from… the end consumers. And the final point is about the openness of the Internet. I think we also need to make sure that the Internet remains a global Internet as a public good. I think it’s an important public good that also the Internet is very open and that also I think only some figures say that 51% of the population in the world are connected yet, but still a big part of the population which is not connected. And so continue keeping an eye on that, that the Internet doesn’t become fragmented, whether through new technologies or through government measures, censorship and so on. Thank you.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much for these comments. First, the lady on the right and then the lady on the back. Yes.

Audience:
Thank you. My name is Helena Bank. I come from the Norwegian Trade Campaign. Thank you for the presentations. I do have a question to Jasmin Ismail and to Antonia Karasaga. I do as good as I can. Yes, because they are very much, you know, what is happening or what should happen on the ground domestically in order to prepare for that transition, which Jasmin explained, and then what’s happening on the top in WTO in terms of binding government to some sort of policies. And Jasmin, if you would please just for me assess how does this agenda that’s happening now with GIs and so on in the WTO apply to what you have been saying? And opposite to Antonia, how does this need on the ground correspond with what is pushed forward by some interested countries in the WTO? in the WTO. Thank you.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much. We will take two questions and then I think we can make a tour of replies.

Audience:
Thank you. Thank you so much to the panel. My questions are particularly for the WTO understanding the Secretariat as supposed to be a neutral body to facilitate for members to discuss. So I’m interested in each of the three areas. I just have a tiny question. If countries want market access, if they want to open their markets to the participation of foreign corporations in their sectors, they can do that now without binding and making a commitment. So if you see as a country that if you open up to telecoms and then you allow foreign producers in, if you keep that policy space, you can decide at a future time that you don’t want them in anymore, that maybe you want to give a boost to your local producers or you can use that as is according to the needs of your economy. But if you commit to it, then you can end up in a situation like Bolivia did with their hospital services where they committed the sector. They had a changing government that responds to what’s called democracy. They had a new constitution, but yet the WTO rules have made it so that they cannot extract that sector from the commitment, and it’s been over a decade now that they have not been able to take that commitment out. So it just seems like I don’t understand that. I thought the Secretary’s role was sort of to facilitate but not to advocate that countries make commitments. On the second thing with the moratorium, we understand that this was a gift to the United States that was really against the interests of most developing countries, and most countries actually didn’t understand it very well. If you understood what happened and know a lot of negotiators back from 1998, it was very clear that it was not something that a majority of members were in favor of. But we look at it now, all these years later, and I was just surprised that it wasn’t mentioned how much tariff revenue we’re talking about losing for developing countries. So as we know, UNCTAD and the South Center have done studies on this and if we just look at the period from 2017 to 2020, it’s estimated that developing countries and LDCs lost about 56 billion US dollars in tariff revenue. Imagine all of the amazing digital and green transformations they could have done with that tariff revenue and instead we have some of the biggest corporations in the history of the world, Apple and Google and Amazon and Netflix not having to pay taxes on their profits that they made in those countries, right? I mean it’s a tariff but it’s like for the right to make a profit in those countries they don’t have to pay taxes. So that is a big net transfer of wealth that could have happened to developing countries that instead is just lining the pockets of the biggest, most profitable corporations in the history of the world that happen to be American. And on the third issue of the plurilateral JSI, I’m still really, really confused by this because there was a rejection of multilateral discussions on e-commerce at the Buenos Aires Ministerial. Maybe many of you were there. We saw the negotiators. We saw them debate it and there was a rejection of that, okay? So to actually have a joint statement initiative, a plurilateral being negotiated in the WTO is not compatible with multilateralism and it’s not compatible with the Marrakesh Agreement. It’s something that Secretariat should absolutely not be supporting and using WTO multilateral resources for. Now I remember the time when it was being discussed and there was a whole discussion of e-commerce for development and a lot of developing countries put forth what their demands were that they wanted. They wanted electrification. They wanted resources. They wanted financing for roads, postal delivery, skills. You know that none of these things can be delivered in WTO rules.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Sorry for interrupting you, but we are running out of time and we have another question and our reply. So could you please?

Audience:
Okay. So the comment or the question I mean is to say, you know, UNCTAD does capacity building on e-commerce. This is a house for negotiating rules. And the membership overall rejected negotiating e-commerce binding rules in the WTO. And if you want to have a development angle, it should be the things that developing countries have asked for, for the need for digital industrialization. And those rules are not in what we see in the text at this point that has been leaked. And so how can the Secretary justify its continued advocacy of things that are interesting for big tech, for rich countries, when it’s supposed to be a neutral arbiter and it’s not even supposed to be facilitating an illegal JSI to begin with?

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you. Please.

Audience:
Yeah. Thank you. I’m part of the Pakistan delegation here, or to attend IPU-WTO public debate. It’s really mind-boggling. And my question or my comments are addressed to Antonia. If she looks at the record of 1998, the ministerial meeting in which President Clinton and U.K. Prime Minister Blair both were present, and they were hell-bent to convince everybody to declare the new millennium e-commerce duty-free. I happened to be the commerce minister of Pakistan at that time. And your record will witness that I objected to this thing, and I blocked it, because the developing world could not be guaranteed that if they become part of that idea in the new millennium, how their budget would be run, where the income would come from if the e-commerce is free, and whatever the imports are, which is the main source of revenue. I’m surprised. I didn’t have a prophecy at that time. In post-1998, I’d been finance minister of Pakistan for a time, but today I get very shocked and surprised that this forum has not been able to find a solution in the last 25 years. So, you know, let me assure you, unless you see and watch the interests of the developing world and the developing countries, how they would manage, how much would they suffer, how can that be compensated, today we are talking of e-transactions. At that time it was e-commerce. It was much bigger and, you know, overall imports. So I think if there is any, you know, solid solution, report, I’m talking 25 years ago when I intervened in the ministerial meeting. And it is a coincidence that I’m leading, you know, this delegation as leader of the House of the Senate of Pakistan. And in 25 years, this forum has been unable to find a solution. So can somebody guide me, share with me, where do we stand after 25 years, which I predicted that it is not an easy issue. And I blocked it. The record will speak out. And that’s why it could not be carried in 1998. Thank you.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much. We can now pass our responses. Jane, would you like to? Yeah.

Jane Drake Bruckman:
There are a lot of questions there, so I’ll have a go and we’ll all have a go, I suppose. The first thing is I want to say there is some evidence out there that the silos are being broken down in the way governments plan domestically to meet both the green and the digital challenges. And it’s not only the developed economies that are managing to break the silos down. I’ll just throw in the example of the Philippines, which is actually emphasizing in its ICT ecosystem, the National ICT Ecosystem Framework, specifically working on how ICT and internet connectivity can play a positive role in the world. in climate action and energy improvement, which is exactly a breaking down of the silos as Jasmine’s recommended. I wanted to, perhaps the best way of dealing with this is to say that I would add one to Jasmine’s list of nine and I’d make it 10, and I would urge, I would really urge more focus on openness, not less, but more. We’re talking here about cross-border challenges. When we talk about the environment, we are talking about global challenges and we’re not going to deal with them in a closed manner. We’re not going to deal with them in domestic industrialization policies. We’re going to have to deal with them at a global level. And from a trade perspective, what that means is that more developing countries should be participating in the initiatives that are going on here in the WTO. There are many developing countries already participating in the JSI on e-commerce and many more should be sitting in and learning from the process of observing it and understanding how these new trade issues and how new technologies might be useful in meeting these global challenges. I think Saeed was very right when he said that access to the internet alone is not going to bridge the digital divide. To bridge the digital divide and grow one’s own digital economy, it takes digital skills, digital infrastructure, much more focus on national innovation ecosystems and entrepreneurial activity, and it also takes a domestic regulatory framework which is conducive to getting on with it. And at the end of the day, when we’re talking about… The regulatory issues and the regulatory cooperation around them, that brings us back very thoroughly to this building here and the need to sit down together to work out how we should be going about ensuring we don’t have a fragmented digital economy. So, in my view, and I don’t feel that the Secretariat should need to defend themselves Interpreters, I apologize, but we have to stop interpreting because we have to go to another room for another assignment. I feel that we are missing a major opportunity to solve some major global problems. If we don’t let get on with it, those who want to start getting on with some of these problem solving.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you, Jane. Yasmin, the floor is yours.

Yasmin Ismail:
Thank you so much. I’m going to focus on Helena’s question, which was a very good question. Thank you so much. A very fact-based answer. We have two tracks. We have the work program on electronic commerce, which I can say is back on the right track in my opinion and perspective. It has been reinvigorated. Development is now at the core. Issues that are being discussed are topics that it’s been a very long time we haven’t been discussing, like technology transfer. I think if we reinvigorate it and empower it a little bit more, then better results will come soon, I hope. So, for a work program, development is at the core now and this is one step towards it. Sustainability can be one of the topics to be discussed as well and here we’ll be more on track also for the green transition. For the JSIs, I’d say, of course, the JSI does not include all developing countries, so I cannot… say that it is on the, let’s say, 100% full track towards the results to support developing countries just for the fact based that at least the African continent is almost absent. So this is a fact that we need to face. However, to give some also good facts, the discussions have been tackling special and differential treatment which is a proposal that has been put forward by an African country which is Cote d’Ivoire. And there are discussions about flexibilities and a model of SDT that resembles to the trade facilitation agreement. We have also the co-conveners that established a capacity building program that what I hear as well is that this is supposed to be transformed into a mechanism when the agreement and if the agreement is taken through. So there are some elements that could be promising. But what I see missing, if we want to get put green in the equation, I don’t see a proposal in this text that tackles the environmental impact of e-commerce at all. I don’t know about everyone in the room but I’ve been counting the boxes that I’ve been receiving from online platforms without mentioning who and I have tons at home and it’s been very tough to get rid of. So I think this is one impact that is very flagrant and I think the relation between e-commerce and the environment needs to be investigated more and attacked. And tomorrow we have a session with the Colombian mission at 2.15 that will actually tackle this exact nexus. Thank you so much, Helena, for the question. Thank you, everyone. Thank you, Aysegul, for this opportunity.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much. We are exceeding our time, like 10 minutes now, and our other panelists have other sessions to attend. So just final words.

Antonia Kartzigana:
Thank you. And I’m not sure it’s going to be the final word, but unfortunately I have another session to go to. No, maybe I’m just picking up in terms of the question that Elena raised on what Yasmin said because I think that’s exactly the same points that I would make, which is that in the context of the JSI, the needs on the ground are precisely reflected in the development dimension that’s being brought into the discussion. There’s a lot of topics that are, you know, of concern to developing countries in that context. In the JSI, yes, participation is by some developing countries, many developing countries and some LDCs with lower participation by African countries, but it’s based on a self-selection. So, I mean, the best way to bring the concerns and to bring that element into the discussion, although, as was said, there is a proposal to have special and differential treatment, there is a development dimension in those discussions, is to sit at the table. Otherwise, the rules will be discussed with no input. So, I think it’s participating in those discussions is a way of bringing an additional perspective. And I think, you know, there is no advocacy on the part of the secretariat as such. There is a description of what is happening in this house because I think it’s important for the wider community, including civil society, to know what is happening. At the end of the day, this is a choice in terms of whether members want to join or don’t want to join. So, there is not a wholesale rejection on the part of the membership of the JSI. There are different views as to their legality, this is acknowledged, but a majority of WTO members is engaging in this type of discussion. When it comes to the question about commitments and the value of bindings, I think bindings are valuable because they give certainty and predictability to traders, their way of attracting investment, and they also are guaranteed to the smallest player in the multilateral trading system. We always tend to look at what the bindings are in terms of bindings done by developing countries, but developed countries have undertaken far more bindings and they are valuable in guaranteeing market access to the smallest players. players, which maybe wouldn’t be able to get this access if they were engaging bilaterally on these aspects. And then when it comes to the issue of Bolivia, well, there is a possibility of renegotiating members’ commitments, but of course there is a need to offer some compensatory access in other areas, and this is indeed where the discussions took place when Bolivia wanted to renegotiate commitments on hospital services. And finally, when it comes to the moratorium, I think, yes, it is true that there is a loss of customs revenue. This is one of the issues that is being discussed under the work programme, because the non-imposition of customs duties on electronic transmissions implies a loss of customs revenue. There’s many different studies out there with many different numbers. Most point to relatively limited impacts, but in except for specific countries that would have consequence of lost revenue, but I think one element that also doesn’t need to be lost sight of is the fact that some digital inputs, for instance, consumer services, are inputs that are essential not only to the development of the digital economy, but also to the development of the green economy. And therefore, putting duties on those might actually render the development, both of the digital and the green ecosystem, more challenging. Thank you.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much.

Mehmed Sait Akman:
We have limited time, let me be very brief. What I learned from trade policy studies is that trade policy is actually starting at home, domestic policy. This is the case for green economy and digitalisation. If we come back to our topic, yes, we have the GSIs, everything, but it does not cover everything we discussed here with respect to how digital improvements can help us. achieve our objectives for SDGs and environmental issues. I think what we need all the countries, all societies, is to have, as I proposed before in the UNEP report, that such transformation requires deliberate decisions and actions. And these decisions and actions should also be at the domestic level, referring to regulations. What we can do at the international level, we should work more on how to regulate new technologies like AI, for example, which may have some negative externalities, as you said. But before coming to trade, I think we should start from the very beginning on how to regulate and how to make people more aware and improve their skills in terms of using and harnessing digital technologies. My last point is that you referred to your son, yes, the Generation Alpha now they call, they learn, but we should not leave them only problems and challenges. We should teach them what to do and what not to do. I think this is one important point that we should also say, just to conclude.

Moderator – Ayşegül Şahinoğlu Yerdeş:
Thank you very much. Now we have reached the end of this session. I would like to extend my heartfelt thanks to our panellists and for their insightful comments. I also would like to thank the floor for making this discussion much richer. And special thanks goes to our Member of Parliament, Zia Altunyal, which has honoured us today. And likewise, we have some senators from Pakistan, we also welcome them here in Geneva. And it’s also an honour for us to host you in today’s session. So with that, I close this session and I wish you all a very good afternoon. Thank you.

Audience

The analysis highlights several arguments and discussions on various topics. One of the main points revolves around India’s ability to offer efficient solutions in language, digitalization, and financing that could greatly benefit the World Trade Organization (WTO). India has already introduced and pilot-tested an MSME financing solution called Oconfor and has initiated the United Payment Interface (UPI) for mobile transfers of money with low transaction fees. These initiatives demonstrate India’s potential in addressing issues related to language barriers, digitalization, and financing, making it an asset to the WTO.

Ghana is another country making strides in promoting inclusivity and gender equality in trade. The country has implemented several strategies to support women in benefiting from the African continental free trade. This includes the formation of the Trade and Gender Committee under the National Trade Facilitation Committee, sensitization and training programs for women and border agencies, the adoption of the ‘gender champion’ concept to assist women traders effectively, and the implementation of a simplified trade regime for women crossing the border with goods worth less than $5,000. These initiatives demonstrate Ghana’s commitment to ensuring women are empowered and can actively participate in trade, contributing to the overall economic growth of the country.

Digital inclusion and access to digital financial tools are crucial for remote work and business efforts, particularly in rural areas. Limited access to essential digital tools, such as credit cards, hinders individuals from fully participating in the digital economy. There is a need for solutions to eliminate these barriers and ensure individuals from rural areas have access to digital financial tools. This will not only facilitate remote work opportunities but also contribute to reducing inequalities and promoting decent work and economic growth.

The analysis also explores the issue of youth representation in politics. It is observed that there is a lack of young people’s representation, and their voices are not being adequately heard. To address this, the suggestion is made that young people should create their own platforms to amplify their voices and be noticed in political arenas. This would contribute to building stronger institutions and promoting peace, justice, and inclusivity.

Financial inclusivity is another important aspect discussed in the analysis. The integration of mobile payment solutions with traditional banking methods is seen as essential to ensure financial inclusivity. Many individuals, especially youth, use mobile payments extensively. However, access to Visa cards, which are often required for certain transactions, can be a challenge and may restrict financial participation. The need for integration between mobile payment solutions and traditional banking methods is thus emphasized to promote financial inclusivity, reduce inequalities, and tackle poverty.

The analysis also points out the importance of policies adapting to technological advancements. While technology is advancing rapidly, policies often lag behind. There is a need for policies that can keep up with these developments to ensure organizations can effectively utilize successful models and data, thereby enhancing sustainability and contributing to responsible consumption and production.

Finally, the analysis sheds light on the issue of allowing Africans to pay in local currency for digital services. Currently, the e-commerce moratorium exempts tax on digitally delivered services. However, there are concerns that this moratorium may be under threat, which could have detrimental effects, particularly in Africa. It is argued that platforms like GAFA should work with local partners to enable Africans to pay directly in local currency, rather than relying on hard currencies or mobile visa payments.

In conclusion, the analysis highlights various arguments and discussions on a range of topics. It emphasizes the potential benefits that India and Ghana can bring to the WTO, the importance of digital inclusion and financial access, the need for improved youth representation in politics, the significance of financial inclusivity and technological adaptation in policies, and the challenges associated with digital payments in African countries. These insights provide valuable considerations for policymakers and stakeholders to address these issues and promote sustainable development.

Sarah Frimpong

The analysis reveals several important points about the informal sector and the role of women in African economies. Firstly, it highlights the distinctive dual nature of African economies, divided into the formal and the informal sector. The informal sector is found to make a significant contribution to Africa’s Gross Domestic Product (GDP). Notably, women and youth form the largest part of the informal sector in Africa, underscoring their importance in this sector.

However, challenges are facing the African informal sector that need to be addressed. One of these challenges is the complexity of digital platforms, which proves to be a barrier for some players in the informal sector who lack literacy skills to make good use of mobile money payments. As a result, most market women can only use their phones to make calls due to low literacy levels. This highlights the need for simple solutions that can enable market women to fully utilize digital platforms and expand their businesses.

Another challenge identified is the issue of affordability in telecommunication products and services in Africa. It is noted that making a call from Ghana to Togo is more expensive than making a call from Europe to Germany. This lack of affordability hinders market women from taking full advantage of their limited knowledge and expertise. Therefore, it is crucial to address this issue by providing affordable telecommunication products and services that can empower market women and facilitate their participation in economic activities.

The analysis also emphasizes the importance of involving and informing informal traders about the African Continental Free Trade Area. It is highlighted that most market women are unaware of this trade agreement, and the lack of information and complex language of trade agreements hinder their effective implementation. Therefore, there is a need to translate trade agreements into easily understandable language for market women to ensure their meaningful participation in the economic benefits of the African Continental Free Trade Area.

Furthermore, the analysis criticizes the government’s hasty approach to formalizing the informal sector through counterproductive interventions. Specifically, the introduction of a 1.5% tax on withdrawals in Ghana resulted in a 20% drop in mobile money transactions. Instead of imposing burdensome taxes, the government is urged to adopt a collaborative approach that enables a seamless transition of the informal sector into the formal economy.

The lack of comprehensive understanding and data collection on the informal sector is identified as a major hindrance to effective policy interventions. The analysis argues that the informal sector is intricate, with different needs, skills, and capacities. Current initiatives and interventions tend to broadly categorize the entire informal sector and may not address the unique needs of its different aspects. Additionally, the scarcity of data on the informal sector makes it challenging to design appropriate policies that can effectively support this sector.

To address this issue, the analysis suggests increasing and improving data collection on the informal sector in Africa. The availability of more data would allow for a more comprehensive understanding of the various intricacies of the informal sector and would aid in the formulation of targeted and effective policy interventions.

Lastly, the analysis highlights the importance of renewing the moratorium in trade, particularly in the interest of women. Renewing the moratorium is seen as a cost-effective way to include women in trade, with minimal costs compared to the potential gains that would be made by including women in the trade sector. However, the analysis does not provide supporting arguments or evidence for this point.

In conclusion, the analysis sheds light on key aspects of the informal sector in African economies and the crucial role of women in this sector. It underlines the need for simpler digital platforms, affordable telecommunication products and services, and informed participation in trade agreements to unlock the potential of the informal sector. Additionally, the analysis emphasizes the importance of a collaborative approach, comprehensive data collection, and renewing the moratorium in trade to foster inclusive and sustainable economic growth in Africa.

Princess Puskas

Mobile payments have the potential to revolutionize the financial landscape in Africa by including previously unbanked populations and contributing to sustainable economic growth. Around 70% of mobile money accounts in 2022 were from Africa, highlighting the significant uptake of mobile payments in the region. By bringing the unbanked and informal sectors into the financial sector, these individuals can actively participate in the economy and contribute to economic growth.

Mobile payments also hold great promise for the development of micro, small, and medium enterprises (MSMEs) in Africa. These businesses, often lacking access to traditional banking services, can benefit from mobile payment platforms that enable efficient and secure transactions. This support for MSMEs can foster entrepreneurship, job creation, and economic development.

To ensure the inclusion of the informal sector in the internationalized mobile banking system, digital literacy becomes a crucial factor. Initiatives are proposed to progressively incorporate the informal sector into banking through enhanced digital literacy programs. This approach aims to empower individuals in the informal sector to navigate and utilize mobile banking solutions effectively.

The process of internationalizing mobile banking should begin with a small-scale approach, initially focusing on the leading languages in Africa. Gradually, other languages should be included to ensure accessibility and a universal banking system that facilitates transactions and exchanges of goods and services across the continent.

The inclusion of digital technologies in Africa’s economy can help lower reliance on the informal sector, which is associated with high unemployment rates and limited economic diversification. The adoption and integration of digital technologies can drive innovation, enhance productivity, and contribute to a more diverse and sustainable economy.

Regulation and supervision of digital technologies are important for fostering innovation, safeguarding financial stability, and protecting consumers. A balanced approach is necessary to create an enabling environment that supports technological advancements while ensuring compliance with regulatory standards.

Efforts towards achieving a single digital market in Africa are commendable, particularly through collaboration among African economies. The establishment of such a market holds tremendous potential for promoting digital innovation, boosting trade, and enhancing economic growth across the continent.

Mobile payment services, such as Orange Money, offer their own Visa Card, providing youths with access to financial services without requiring a traditional bank account. This inclusion of youths in the financial sector is crucial, as they hold valuable insights and perspectives that can drive innovation and bridge potential generational gaps.

The commendable efforts made in India and Ghana towards boosting inter-country trade through the adoption of digital technologies are noteworthy. India’s United Payment Interface has been instrumental in lowering transaction costs, while Ghana’s partnership with the Pan-African Payment Settlement System has facilitated cross-border trade. These examples demonstrate the transformative potential of digital technologies in fostering economic cooperation and integration.

Furthermore, when discussing digital technology and youth, it is important to ensure gender balance in the conversation. While women are often the focus of gender equality efforts, it is equally important to include male youth in discussions to ensure a comprehensive understanding and address the needs of all genders.

In conclusion, mobile payments, digital literacy, inclusive internationalisation of mobile banking, digital technology inclusion, regulatory balance, collaboration, youth involvement, inter-country trade facilitation, and gender equality are crucial elements for driving sustainable economic growth and financial inclusion in Africa. Through concerted efforts and strategic initiatives, Africa can harness the transformative power of digital technologies and leverage them to forge a prosperous and inclusive future.

Cecilia Malmström

Trade liberalization has a differential impact on men and women, with gender discrimination in laws making it more difficult for women to access financing. Women’s clothes are also subject to higher tariffs compared to men’s clothes. To address these challenges and promote gender equality in trade, it is crucial to involve women in trade more systematically and remove obstacles to their participation. Research has shown that countries with higher participation of women entrepreneurs are more competitive.

Gender provisions should be included in free trade agreements to ensure gender equality in trade. The European Union (EU) has taken steps in this direction by including gender provisions in their agreements with Canada and New Zealand. Additionally, 125 countries signed a joint declaration on women in trade at the Ministerial 2017 in Buenos Aires, showing a global commitment to addressing gender inequalities in international trade.

The African Continental Free Trade Agreement has immense potential for empowering women by improving their financial and digital literacy, increasing their access to capital and opportunities. Inclusion and participation of women are crucial components of the agreement to ensure that women benefit from the trade opportunities it provides.

Better data on the informal sector is needed to design effective interventions and policies. Collecting data can help understand the unique challenges faced by women in the informal sector and implement targeted solutions.

The needs of the informal sector include digitalization, training, access to capital, and the removal of discriminatory rules. Addressing these needs can enhance opportunities for women in the informal sector, leading to improved livelihoods and economic growth.

Standardization in e-commerce, anonymization in public procurement, and high-standard digital trade rules are essential for promoting gender equality and reducing discrimination. Standardization facilitates fair and efficient business transactions in e-commerce. Anonymization in public procurement projects can mitigate discrimination and increase the number of projects that go to women. High-standard digital trade rules ensure inclusivity and enable women and micro, small, and medium-sized enterprises (MSMEs) to benefit from digitalization.

During the COVID-19 pandemic, the importance of digital trade and services has increased. High-standard digital trade and services rules can ensure that women and MSMEs receive the benefits of digitalization. Enhancing digital services trade within the African continent requires sharing best practices and experiences.

Measures related to digital services and market access are crucial for building trust. Implementing high-standard provisions and providing access to cybersecurity and fraud prevention tools are essential for fostering trust in digital transactions and promoting business growth.

Mobile payments play a transformative role in reducing inequalities, particularly in the African context. Encouraging diverse solutions and services can create an enabling environment for women and promote financial inclusion.

Including women’s rights in trade agreements is a vital step towards gender equality and decent work. Most modern trade agreements reference the International Labour Organization (ILO) core conventions, which protect women’s right to unionize and advocate for non-discriminatory wage negotiations. Examples include trade agreements between the EU and various countries, as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Individual companies must take action to implement ILO conventions and promote gender equality and decent work. While enforcement lies with the companies, support from organizations like the EU and the ILO is essential for monitoring and addressing systematic abuses.

In conclusion, trade has a significant impact on gender equality, and it is crucial to address the differential effects of trade liberalization on men and women. By involving women in trade, removing obstacles, and improving access to markets and resources, countries can enhance competitiveness and promote gender equality. Including gender provisions in trade agreements, such as those by the EU, contributes to gender equality in international trade. The African Continental Free Trade Agreement empowers women by addressing their specific needs and promoting standardization and high-standard digital trade rules. Collecting better data on the informal sector informs effective interventions, and addressing the needs of the informal sector, such as digitalization and access to capital, benefits women. Standardization in e-commerce, anonymization in public procurement, and high-standard digital trade rules reduce discrimination and promote inclusion. Mobile payments promote financial inclusion and reduce inequalities. Finally, including women’s rights in trade agreements and implementing ILO conventions are vital for promoting gender equality and decent work.

Cathleen McDonalds

Visa’s presence in Africa and its approach to the continent’s demographics and technological innovation have been viewed positively. They operate in over 200 countries, including various African countries, and their aim is to facilitate access for women, entrepreneurs, and MSMEs into the global economy. This aligns with the goals of SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities). Visa recognized the opportunities in Africa’s demographics and technological advancements.

During the pandemic, Visa’s Think Tank discovered a surge in women’s entrepreneurship, driven by the acceleration of digitization. Businesses that experienced growth during this period were more likely to use digital platforms and payments, as well as engage in export. This highlights the positive impact of digital payments on women’s empowerment and economic growth, in line with SDG 5 and SDG 8.

Visa’s initiatives in Africa further demonstrate their commitment to promoting economic growth and innovation. They have partnered with Safaricom in Kenya to extend the use of M-PESA, a mobile money transfer service, beyond Kenya’s borders. Additionally, Visa has launched the Visa Africa Fintech Accelerator, aimed at supporting local startups and fintechs. They are also working on ensuring interoperability of different payment models across Africa. These efforts contribute to the goals of SDG 8 and SDG 9 (Industry, Innovation, and Infrastructure).

The relevance of digital technology in promoting financial inclusion and economic growth is underscored by Cathleen McDonald. She emphasizes the potential of digital technology to act as a catalyst for these goals. Additionally, McDonald highlights the importance of disseminating information about digital technologies in an accessible and inclusive manner. Utilizing appropriate channels such as radio stations and newspapers, especially for people in rural areas, can enhance inclusion, aligning with SDG 9 and SDG 10.

McDonald also upholds the importance of language in information sharing, suggesting that utilizing local languages can improve the rate and efficacy of inclusion. Trade affairs and educational forums are suggested as platforms for teaching about opportunities for financial and economic advancement through digital technologies. These platforms align with the goals of SDG 4 (Quality Education), SDG 8, and SDG 9.

However, McDonald acknowledges technical issues experienced with Visa mobile payments, indicating the need for further improvement in this area.

The initiatives of India and Ghana in promoting digital financial inclusion are praised. India focused on digital public infrastructure during its G20 host year, while Ghana is working on direct interventions to facilitate digital financial inclusion. These efforts contribute to the goals of SDG 9 and SDG 10.

McDonald commends young African trade experts for their focus on youth, particularly the inclusion of young women. Their efforts align with SDG 5 and SDG 8.

Access to more digitally enabled services is considered a net benefit for economies and diversification, with a particular positive impact on women and MSMEs. This aligns with SDG 1 (No Poverty), SDG 5, SDG 8, and SDG 10.

Extending the moratorium on certain digital tools and services is seen as crucial to maintaining the availability and offerings of these tools. Not extending the moratorium could have a negative effect, and the use of these digital tools is vital for achieving SDG 8, SDG 9, and SDG 10.

Visa’s Visa Net Settlement Service is offered in the African continent, providing services in local currency when domestic services are needed. This contributes to SDG 8 and SDG 10.

More competition in payments is viewed positively as it drives down costs, encourages investment in innovation and security, and provides more options for consumers and small businesses. This aligns with SDG 8, SDG 9, and SDG 10.

In conclusion, Visa’s presence and approach in Africa highlight their dedication to promoting gender equality, economic growth, and reduced inequalities. Their initiatives in partnership with local entities, support for startups and fintechs, and efforts towards interoperability are ways in which they are contributing to the achievement of the SDGs. Additionally, the positive impact of digital payments on women’s empowerment and the importance of inclusive information dissemination and language accessibility are emphasized. The initiatives of India and Ghana, as well as the commendation of young African trade experts, further highlight the significance of digital financial inclusion and youth focus.

Moderator

During the discussions, speakers explored various topics related to inclusive economic growth in African countries. One key focus was the potential of mobile payments to foster inclusivity, particularly for micro, small, and medium enterprises (MSMEs). It was acknowledged that bringing unbanked individuals into the financial sector through mobile payments could stimulate economic growth. The positive sentiment towards this argument suggests an optimistic outlook for the impact of mobile payments in Africa.

However, concerns were raised regarding digital literacy and language barriers that could hinder the implementation of mobile payment systems. It is crucial to address these issues to ensure that all individuals, including those with limited digital and language skills, can fully participate in the digital economy. This neutral sentiment highlights the need for further considerations and actions to overcome these barriers.

Another significant argument was the adoption of artificial intelligence (AI) to integrate the informal sector into banking services. The use of AI technology was seen as a potential solution to unify African banking and facilitate smoother exchange of goods and services. The positive sentiment towards this argument implies that AI integration can promote economic growth and inclusivity in the informal sector.

Digital technologies were also highlighted as means to empower women and graduates in starting their businesses. It was argued that digital tools and services can create more opportunities for underrepresented groups and contribute to gender equality and economic growth. This positive sentiment suggests that digital technologies have the potential to foster inclusive economic development.

Another point raised was the need for African economies to diversify in order to withstand tensions and pandemics. The sentiment towards this argument was neutral, indicating that while diversification is important, further actions and strategies are needed to promote diversification and enhance economic resilience in the region.

The importance of Visa as a global payments network working to uplift businesses and support women in Africa was also emphasized. The neutral sentiment towards this argument suggests a balanced view of Visa’s role and potential impact on economic growth and gender equality in the region.

Furthermore, the discussions emphasized the significance of digital inclusion, access to capital, and the removal of discriminatory rules and laws. It was argued that policy interventions are needed to sustainably maintain startups and enable their growth. These interventions also require the use of data to understand and implement effective policies in the informal sector. The positive sentiment towards these arguments indicates a recognition of the importance of supportive policies and data-driven decision-making in promoting inclusive economic growth.

In conclusion, the discussions revolved around various aspects of inclusive economic growth in African countries. The potential of mobile payments, adoption of AI, digital technologies, diversification, and policy interventions were among the key points discussed. The overall sentiment was positive, indicating an optimistic outlook for leveraging these approaches to foster sustainable economic development and reduce inequalities in the region.

Moderator:
I think we would like to start. So, first of all, a very, very warm welcome to everyone in the room. We appreciate you coming. We know we are competing with Arantxa González in the atrium. So, a special thank you to you. My name is Cedric Ayman. I work with the Konrad Adenauer Foundation here in Geneva. I work on digital affairs and trade. And I have the absolute privilege of being the moderator of a panel of our wonderful young African trade experts, Cecilia Malmström and Caitlin McDonald from Visa. But before I introduce them formally, I have prepared some very quick questions that you can see in the background, just to get us all started as a bit of a food for thought on the topic that we’ll be discussing today. I apologize for the quality. I thought we would see them a bit better. But I will open the answers already, and you just get points if you had it all correct. So, covered by the AFCFTA, we will have 1.3 billion people. By 2035, we’re expecting a 7% increase, which means $450 billion. As we’re talking about digital payments, in 2022, we had a registered number of $1.2 trillion, and 70% of it was in African mobile money accounts. Another very important element is, as we’re talking about harnessing digital tools for sustainable trade, we also have to talk about the people. That means also people in the… informal employment sector and as we’re talking in the African context and the Sub-Saharan African context, we’re talking between 83 and 85 percent working in that. And what’s more, the percentage of women in informal employment is 90 percent. So these are just some facts to settle us all and kick us off in this discussion. And before turning to our panelists, I would like to introduce, I will start in the order which we have here, we have Caitlin MacDonald who is the Senior Director, Head of International Affairs at Global Government Engagement at Visa. She has been in that role since 2021 and with Visa since 2015. And I asked all of our panelists a fun fact of how they got into trade and Caitlin fell into trade through the industry and has really learned to love the power of e-payments and the facilitation it has for economic growth and personal empowerment, also especially for women. We have Cecilia Malmström, Swedish politician having served, among others, as a European Commissioner for Trade between 2014 and 2019, member of European Parliament and I’m passing some positions. She’s currently a non-resident fellow of the Peterson Institute in Washington DC. Also a quick heads up, at 3.15 in this very same room, we’ll have a live session of the trade wins with Usha Dwarkar Kanalbadi who is the Ambassador of Mauritius and Mr. Alan Wolfe, also from the Peterson Institute. And her fact of how she fell into trade is, and what she loves about trade, is the interaction between people and the potential for growth that it gives. people. We have on the far side Sarah Frimpong, who is a PhD candidate at the University of Bielefeld, where she focuses on the informal sector of women in Ghana. She is also one of our wonderful young African trade experts, so this is part of a fellowship. We have brought four wonderful candidates this year to Geneva that will be at the public forum but also meeting with other key actors here in Geneva. So after the session, please don’t hesitate to meet us, meet with them, interact with them. We’ll be all over the public forum. Her personal effect of how getting into trade was her personal background. She is surrounded by informal traders, especially women, and also interested in seeing how trade can drive prosperity on the African continent. And last but certainly not least, we have Princess Puskis, who is a senior economist at the Central Bank of Botswana in the Modelling and Forecasting Unit, as well a young African trade expert, having published blogs with the trade experts as well. And her personal relation to trade was seeing how digital technology can enhance trade and provide sustainable economic growth for African countries. So now starting, I’d like with Princess Puskis, I’ll start with the question. You have written a blog that I highly recommend on the Trade Experts website, which is called Internationalizing Mobile Banking in Africa. And so my question to you is to see what would be the potential and

Princess Puskas:
expectation that you see in mobile payments? All right, good morning everyone. It’s a pleasure to have you all here. I hope I’m audible. Can somebody give me a thumbs up? Great, thank you. The potential that I see for mobile payments, Cedric, is Like you said, the inclusiveness, especially for our micro, small and medium enterprises, we have them come into the game and play and contribute to sustainable economic growth for African countries. So for me, it’s more on trying to have people who have previously been unbanked to come into the financial sector to be able to contribute, have their businesses started up, and then contribute to economic growth in the African countries. Thank you.

Moderator:
Thank you very much. But when you look at these elements, we’ve looked into the, you’ve said inclusiveness and banking. How would you go about some of the language elements and seeing how there’s some challenges of the, I want to call it digital literacy in this area?

Princess Puskas:
Actually we’re in a session, like yesterday afternoon, the guys by the, is it the auditorium? Yes, they have the artificial intelligence trying to bring the informal sector, and we’re talking about that, that it’s going to be baby steps, you know, because like I said in my blog, to internationalize the mobile banking, you need to start small, with maybe the leading languages in Africa, and ultimately building up to include other languages so that this becomes one, it becomes one African bank, you know, where we are able to transact, to exchange goods and services. So I believe that you all start somewhere, it’s not going to be something that happens overnight, so we need to start somewhere where we start with the main languages and build on to include other languages, yeah.

Moderator:
Thank you. And maybe another element is, there are different opinions on that element, but one element that I found quite interesting was, if we’re talking stronger digital payments, some might consider that it will lower informal activity. And maybe just to have your point of view on this element.

Princess Puskas:
Lowering employment activity.

Moderator:
Lower informal economy. Sorry, lower informal.

Princess Puskas:
I’m glad you’re not saying no informal economy. It’s lower, right? Because right now, you look at the unemployment rates in the African continent, they’re really high, right? We have a lot of people not having income. So I love the fact that you said lower. And like I said, it’s going to take time to get to that point. But what is important is, you’re including people. Like right now, we have people that, we even have graduates who do not have jobs, right? We have people who are just in the market, not working. But by having these digital technologies brought into play, you’re able to have the youth, have everybody, women as well, included in forming up businesses to increase the customer base, right? And I want to believe, like in most African countries, you’d realize that, like for Botswana, we export diamonds, right? And maybe beef. But then there’s less diversification, right? And during times of, say, your pandemics, your geopolitical tensions, we are hit hard because we are not, we’re not diversified, right? So for us having the informal sector come in, it’s going to contribute significantly to making sure that your economy is diverse. You know, you are able to have source of income, you have mainstream source of income into your economy, and that is going to contribute to the sustainable economic trade, economic growth that we want to see. Thank you.

Moderator:
Thank you very much. I am sure we will have many questions afterwards. And now I’d like to pass the floor to Caitlin and kind of throw the question a bit. Visa has been exploring this element of digital economy, women empowerment, especially in the African context, quite a lot, quite significantly. I won’t take away some of the pledges that have been done recently, but that I found very interesting and exciting. And so to bring in a bit of the private sector perspective and see what, in your view, are the potential and empowerment possibilities.

Cathleen McDonalds:
Thanks so much, Cedric. Good morning. It’s really a pleasure to be a part of this session today and particularly to hear from the young African trade experts who have such amazing on-the-ground experience and insights to share. So as Cedric mentioned, I look after international affairs for Visa based in Washington, D.C., and I’m sure all of you are familiar with the Visa brand. But if I may, I’ll just share a little bit about our company. So Visa is a global payments network. We connect more than 80 million merchants with 4.1 billion account holders all over the world. We operate in more than 200 countries and territories, so we really are a truly global operation. And services have really never been more important to the global economy, contributing to more than two-thirds of GDP globally, contributing to the most job creation, particularly for women and youth. And today I’d really like to focus on the inclusive nature of services and e-payments. I also just want to mention briefly the July report that was jointly produced by the WTO and the World Bank. That really made the case on services being the future of trade and having a really inclusive nature, particularly for MSMEs and women. And I think that provides really nice context for today’s discussion. So I want to share a bit about Visa’s presence in Africa and how we think about the African continent in the context of our global business. As a company, our corporate purpose is to uplift everyone everywhere by being the best way to pay and be paid. And really central to that mission is facilitating access for women, for entrepreneurs, for MSMEs into the global economy. And with Africa, it’s just truly central to how we think about global growth, but also living out that corporate purpose. So I know we’re all very familiar with the opportunities in terms of demographics, the technological innovation in Africa. I did also want to mention of sort of unique relevance to today’s discussion is the really kind of untapped opportunity for small businesses in Africa. Estimates suggest that more than 40 million merchants across the continent are still operating exclusively in cash and don’t have access to digital payments. So looking at digital payments and what’s the opportunity for empowerment, I really wanted to focus on the gender lens. This is an area of great importance to Visa. And of course, women encompass such an important part of the informal economy in Africa. So I’d like to turn to some research that has been conducted by Visa’s in-house think tank, the Visa Economic Empowerment Institute, that really looked at the impact of COVID and digitization on women-owned businesses and startups. And the trends are really interesting. We saw a big surge in women’s entrepreneurship. entrepreneurship as a result of the pandemic, and believe that, you know, the digitization acceleration that we saw during COVID created new opportunities for inclusion for women and MSMEs. And I’ll point to a couple of the findings of some surveys we conducted around the world. Very interestingly, our studies show that women-led firms that grew by 5% or more during the pandemic had three things in common. One, they were 25% more likely to use digital platforms. They were 20% more likely to use digital payments, and they were 60% more likely to export. So here we see a really strong correlation in how being digitally enabled helps to facilitate export opportunities for MSMEs, and in this case, for women-led firms. And lastly, I just want to spend a couple of minutes talking about, you know, what Visa is doing in African context to help facilitate MSME access and support women, because I think there’s really a unique opportunity related to entrepreneurship and advancements in technology in Africa. So while we’re a global network, our business is really inherently local. We work through local partners to provide highly tailored services and ones that are relevant to the local context. So a couple of things I want to point out, I’m sure you’re all familiar with M-PESA and, you know, the advent of mobile money really originating in Kenya, Visa partners with Safaricom to allow Kenyan citizens and small businesses to use M-PESA outside of Kenya. So it’s an e-commerce solution so that you can procure goods and services across borders, and it really helps to facilitate more intra-African trade, which, of course, is an objective across the continent. We’re also doing a lot with startups and fintechs. A couple of months ago we launched the Visa Africa Fintech Accelerator and through this program we’ll select 40 startups each year to go through an intensive training program with Visa and also get access to networks and capabilities. We have a really talented pool of applicants so far and they’ll be announced next month so please stay tuned. And then lastly, just reverting back to global capabilities, a big focus of ours is ensuring interoperability of different payment models. So we’re very focused in the African context on Tap to Phone, which is a low-cost acceptance solution for merchants that allows them to accept payments from various domestic buyers but also from international sellers. So that’s been a huge area of focus for us across Africa. Thanks Cedric.

Moderator:
Thank you very much. Before handing over the floor, because we’ll also get into a bit of the challenges that companies and providers such as Visa might encounter, I would like to turn to Sarah to give us a bit of an overview of the role of the informal sector and also what you see as enabling factors of the African Free Trade Agreement and how that could really boost inter-regional trade.

Sarah Frimpong:
Thank you very much Cedric and thank you everyone for being here this morning to listen to our session. And while Princess and Kaitlin were speaking, I was very glad to hear them make a lot of reference to women, women, women, women, yes, because that is really what it is. When we look at the informal sector in Africa, You realize that, first and foremost, the economies in Africa are distinctively dualized into the formal and the informal sector. And we all agree that the informal sector dominates the formal sector. When you look at the GDP contribution, you realize that the informal sector even contributes largely to African GDPs. So the informal sector should be front and center when we have conversations concerning the African continental free trade area. And it is just clear that women and then the youth form the largest part of the informal sector in Africa. When you consider the micro, small, and medium enterprises, one thing I also want to highlight here is that the informal sector is so complex and very difficult to describe. We have this umbrella of micro, small, and medium enterprises describing them, but it is largely informal than we think. The sector is very difficult to put into proper perspective. And with respect to digital tools, you realize that the micro, small, and medium enterprises are able to make use of some of these. But then there are players in the informal sector who do not even have the literacy to make good use of these mobile money payments. For instance, when you go to the markets where I’m coming from, you realize that some of our mothers are not even able to save contact on their phones. They don’t even know how to save phone contact. So what they can do is sometimes, you know, they’ll call a child, can you look for this number for me? I want to place a call to this supplier. So all they do is use their phones to make calls. So the informal sector is more intricate than we can clearly put into terms. And I think that these digital tools are very important with respect to the mobile money platforms. But we should also look at simple interventions for some of these market women. Some of them, all that they need is… what do you call it, the telephone credits to make calls. So we should also look at making these calls very affordable across Africa. It will interest you to know that when you are in Ghana and you place a call to someone in Togo, it’s more expensive than when you are in Sweden and you are calling someone in Germany. So you realize that Togo and Ghana are like back doors. Someone can live in Ghana and have their backyard garden in Togo. I know most of you know the, what do you call it, the footballer Emmanuel Adebayo. He lived in Togo, but he was schooling in Ghana. That’s how close Ghana and Togo are. But making a call from Ghana to Togo is very expensive. So I believe that as we are looking at how we are going to do all these platforms, we should start from the basics, making telecommunication very affordable for these women to also take advantage of. Then there is also the challenge of access to markets. Market access is very challenging when it comes to informal trade. Most of these women have to cross borders to go into neighboring countries to source their commodities. I think it is high time the policymakers of the African continental free trade area look at means of aggregating the market women. They are trading very much so on the micro side in that they have to always go into the neighboring countries to buy things. But in Europe, we realize that we have platforms where entrepreneurs can stay in the comfort of their offices and in the comfort of their homes and place orders and have them delivered to them. But in Africa, it is not so. If you need to sell tomatoes and you do not have enough in Ghana, you need to go all the way to Burkina Faso. And what do these women face when they have to cross the borders? They are subjected to harassment, they are subjected to extortion, they are subjected to various… harsh treatments because they don’t even know what their rights are. But we have the African Continental Free Trade Area, which has a lot of rights that these women need to know that these are my rights. When I’m bringing tomatoes from La Côte d’Ivoire or from Burkina into Ghana, I do not have to pay this, but they don’t know. So then they are the mercy of the border officials who subject them to all forms of treatment and extortion. And that brings me to one of my main points, that the language that we put these trade agreements in are sometimes too complex for those who are to implement them to understand. So if trade agreements are so technical, of course we appreciate that trade is very technical, the language needs to be technical, but the implementation is done by people at the grassroots. So the language should then be broken down into a form that is easily understood by those who are implementing them at the grassroots. And it will interest you even to know that the market women don’t even know about the African Continental Free Trade Area. And I’m saying this based on observation and interviews that we’ve conducted. The free trade agreement has been in operation since 2020, but how many people know? Let me not take you far. Let me take you to Ghana, where we have the secretariat. When you speak to the market women, they don’t even know there is something called the African Continental Free Trade Area. And like I said, they don’t even know their rights. They don’t know their privileges as provided by the free trade agreement. So that is when these digital tools come in. We have so many creative ways that we could make this information available to the women. We used to have these information service vans that could go to the villages, the remote areas, to tell them about developments, policies that the government, in languages that they will be able to understand in a way that they will be able to appreciate, given their skills level. So I believe that payment systems are very important, but also ways of transmitting information. We should also look at that, because they all tie into bringing everybody into play, because I believe when we inform them, we are involving them. So if we want to involve the players at the grassroots, then we should inform them. We should make sure that the language is understandable. It’s good to be technical, but then to what extent? If we are too technical so that we cannot appreciate and implement it, then what are we doing? I always say that the African continental free trade area has two arguments. There are those who believe that it is too ambitious and just wishful thinking. They are right. And there are those who also believe that the African continental free trade area is the key to open the economic prosperity of Africa. They are also right. But the middle ground is implementation. What is left is implementation. If we do not implement it well, those saying that it is wishful thinking are right. If we implement it well, those saying that it is an agenda for African prosperity, they are also right. So it lies in implementation. And is it just those who are the technical people who are going to implement it? In the context of Africa, it is not the technical people. It is the informal traders, because they are the majority. And they need to understand what it is that we are doing. They need to understand what their rights are. They need to understand where we stand and where we want to go to. So it is a grand agenda, but everybody needs to be informed and involved. So to conclude, what I would like to say is that the African continental free trade area, it has great power to open up markets to Africans, both within the region and outside the region. But we should look at implementation. We should embrace these digital tools. But we should rightly segregate the informal sector. The micro, small, and medium enterprises, they are those There are some of them who can make good use of these digital platforms. For those, we can concentrate on them and make sure that we package these in a way that they will be able to understand, the interface will be user-friendly, they will be able to do whatever it is that they are able to do with it. And for the market women who are not skilled enough to take advantage of this, there is something that we can also do for them. Make sure that telecommunication products are affordable so that with their limited knowledge they will be able to take advantage of these things. And before I land, we were talking about mobile money, mobile money, mobile money. We have a lot of research on the continent that points to government interventions and policies attached to these mobile money payments. Of course, we acknowledge that the grand agenda of these digital tools is to bring the informal sector into the formal brackets. That is a given. Everybody is aware of that. But how? The manner in which governments are doing this are rather making these interventions counterproductive. For instance, when you look at Ghana, I make a lot of reference to Ghana because that’s where I’m doing my research and also I’m from Ghana. In 2022, that is in May, the government of Ghana introduced a 1.5 tax element on withdrawals, forgetting that these women are passing their capital and not necessarily their profits or the government just didn’t care where the money was coming from. Once you are withdrawing money, we are taxing you 1.5%. And it was counterproductive. Nine months after the introduction of this tax, research shows that mobile money transactions dropped by 20% compared to pre-tax levels. So I believe that governments should not be so much in a hurry to, you know, bring these women into the formal brackets. It is very important. That balance needs to be struck somewhere, but government should be deliberate and government should be more collaborative in their efforts. These women are very powerful. They are vulnerable given the kind of arrangement that they need to work under, but they are very powerful because they have a voice. So government should rather go the collaborative approach to make sure that they bring everybody on board and with time they will seamlessly transition into their formal brackets and then everybody will be happy. So that’s just a little bit.

Moderator:
Thank you very much. So instead of me doing the questions, I think I would rather in this case turn to Princess to bring her in because in one of her publications I know that she brought some of the elements of information because I think that’s one thing that we’ve just heard that the lack of information of the AFCFTA, the rights they have, that is something that you had mentioned and if you would outline your idea. And then I would also open our second, I’ll call you the digital expert, Caitlin, on if in some of the programs that Visa is doing, if you’ve seen what you’ve managed to do to get that information out there because you have a lot of applicants for these programs so you are doing the empowerment and what may be tools that you have found to be most successful in that way.

Cathleen McDonalds:
All right. Thank you, Cedric. Like as I had mentioned earlier, the digital technology is actually a catalyst for financial inclusion and economic growth and it is important that The informal sector is also made aware of such available opportunities in the economy. And the manner in which you share this information is also quite important because you’d realize given an example from home, I mean, I believe even in our respective countries, you would have your newspapers, right? You would have the radio. You would have your Facebook. But you need to be aware that even people in rural areas, they have limited access to some of these, especially those that are technical, right? So in trying to have this, I feel that even, I don’t know if maybe some of us have them in our respective countries, like the trade affairs. The trade affairs, they would be where you have all these people coming in to teach you. So I feel having to disseminate such information through the newspapers that you know for sure these newspapers are able to reach those in the rural areas. It would help them to be able to come into play. And also, it is quite important that given being able to reach out to the informal people and those in the rural areas, you’re also able to use your various, say your radio stations because you know for sure that they were able to use such, right? Like Sarah was saying, the language that you use is also important to be able to have them included. Especially, it would be important to have your mother tongue to communicate this to those people that may need such information to be able to include them as you expand on your digital technologies. Yes, thank you. Well, I’ll jump in. Thanks, Cedric. And I guess what I would maybe want to focus on is the way that Visa is thinking about how to support digitization and make sure that trade and digital really becomes inclusive of all of us. And I think that’s really important. Thank you. Thank you. inclusive for women in SMEs and we think about a framework that refers to opportunity, skills, and building trust, and the three of these elements are really mutually reinforcing. And before I go into what they are, I would just comment, I love to hear both Princess and Sarah sort of make reference, I think, to elements that really relate to these three areas that Visa’s focused on, so that’s certainly validating in terms of our approach. So the first is opportunity. How do we increase access to digital tools and services, and importantly, to markets? And from where I sit, you know, a big focus is how do we facilitate access to new markets through high-standard digital and services trade, and I’d be happy to go into a bit more detail about what we consider high-standard from the Visa point of view. Secondly on skills, there’s a tremendous opportunity to support women in small businesses in learning how to use digital tools and access new markets, and the research shows that, you know, women, of course it’s not for lack of aptitude, but just lack of training, tend to use digital tools and services less than their male counterparts. So for Visa, this is a huge area of focus in terms of skilling. We have initiatives that are both focused on financial inclusion, how to access banking services, how to leverage payments to, you know, seek a better credit rating, a lot of different opportunities there, but equally important on the digital side, how can small businesses leverage digital tools and services to grow their business, make their business more resilient, diversify their offerings, reach new suppliers, and that initiative from Visa is called Practical Business Skills. We have it available. in many different languages. It’s conducted both in person and online and in really different formats so that we can reach end users that have different needs. And then the last is on trust. So we just can’t talk enough about the importance of building trust in these digital tools and solutions. We saw COVID as a rapid accelerant. We have so many more MSMEs and women interacting with the digital economy for the first time than ever before. And while there’s great opportunity there, it also presents new risks. In the payment space in particular, we’re very focused on fraud and cybersecurity and how can we really support both a policy environment that ensures that people’s data and money is safe, but also just, again, kind of the appropriate skills and knowledge to help build trust and how to use these different tools and services. So I would just reiterate, we think about it as opportunity, skills, and trust.

Moderator:
Thank you very much. And now at this point, I would like to turn to Cecilia. Cecilia has been a staunch defender of women empowerment. And I think this is a very important discussion as we’re talking about the informal sector. I think all three panellists have mentioned the disproportionate effect that the informal economy has. And so I’d like to bring you in, Cecilia, on this and what you see also in the trade element of it.

Cecilia Malmström:
Thank you very much, Cedric. Good morning, everybody. I’m truly honoured and so glad to be in this panel with you. I took a lot of notes. I learnt a lot. And you’ve all been referring to the differences. between men and women in trade. And this is not only anecdotal. We know that that is the case. We know that trade liberalization affect men and women, but not in the same way. And we also know that women, when they are involved in trade and business, they spend a higher degree of their income on food, on education, on health for their children. So that is also a way of fighting poverty in developing countries. But for instance, women’s clothes have higher tariffs than men’s clothes, which is ridiculous. But we need to involve women in trade in a more systematic way and get rid of the obstacles. And you all testified of these obstacles. There are pure discrimination in laws, but also it’s much harder for women to get financing, both in small companies and in bigger ones. There is more difficulties to get to the right networks. We know that SMEs are not sufficiently supported. We know that there is a lack of knowledge and skills, as you said, especially in the rural areas. And there’s a lot of prejudices. And all this is making it harder for women to engage in trade in the same way as men. And as I said, research shows that countries with more women entrepreneurs are more competitive than others. But women have at least 80% participation of the labor form participation, the formal sector, only in 14 countries of the world. So there’s a lot to do here. So when women are held back as women leaders, as business leaders, as entrepreneurs and employees, this is not only bad from a sort of justice point of view. It’s bad for the economy. And there’s a report by McKinsey Global Institute showing that if all women, all countries, improved equal access to trade and labor market, like the ones doing the best, those 14 countries, global GDP would improve with $12 trillion. US dollars until 2025. That is 12 zeros. That’s a lot of money. So there’s an economic case for involving women as well. In the OECD, about 70% of self-employed women work in services, and we saw some figures from Africa as well. So, of course, there is a lot to do here. When I was working as trade commissioner, we started looking at this, and we published a strategy called Trade for All, where we sought to include, in a more inclusive way, citizens in trade and making it more transparent, focusing on values, focusing on small and micro companies, medium-sized companies, and on efficiency. And we discovered also that actually there were big inequalities when it came to women in trade, and this is something we tried to highlight. So what can you do? I mean, we heard some good examples here, but you need to, I want to emphasize what Caitlin said, you need to wear your gender glasses when you are engaged in trade, and also when you negotiate. And recent data by ICC, WTO, OECD, UNCTAD, IMF, World Bank, have arrived lately, and they all have increased public knowledge about the situation, because, of course, if you want to do something, you have to have the figures and the data. So what we in the European Union did was to include gender provisions in some of our free trade agreements, and that can be done. We have it with Canada, we have it with New Zealand, and we have general references in all of them, so that you commit with your partner that you will exchange best practices, you will share statistics, you will share data, you will engage in different projects, it could be everything from financing to training to coaching and mentorship, and that you will sort of check it regularly to see what are the results, how are you doing this. And, of course, in all trade agreements, I think most of them in the world, there is a reference to the importance of fighting discrimination and promoting equality. gender equality. Some member states of the WTO have included gender in their trade review mechanism, and that’s a very good way also to see how are things progressing. Ministers met for the Ministerial 2017 in Buenos Aires, and there was a joint declaration on women in trade. It was signed by 125 countries. That’s a lot, and they all agreed that more needs to be done to include women in trade on all levels. And a lot has happened. There has been a lot of workshops, of training, and conferences, and coaching, and programs, and exchange of experiences, but more needs to be done, and too little has happened. And we need to increase that, and at the last Ministerial, not much happened on this area at all. There were a few countries who were really pushing in the working group, Botswana, El Salvador, and Iceland, and they issued a joint statement, but it was not possible to have a broader agreement by the membership at that time. But I think many other countries were disappointed and are trying to do this. And to come back to the small companies, women, as we know, all over the world, not only in Africa and the developing world, are more likely than men to work in small companies. So support for small and medium-sized companies is support for women. That’s the best thing you can do. Increase in small companies raises women’s wages and increases economic equality. And in Africa as a whole, in the continent, 58% of all the small companies, as small as it means, are women-owned. But these companies lag behind compared to the ones that are owned or run by men, according to a study by the World Bank. And the biggest constraint here is finance. So this is something that needs to change. to be done. Sub-Saharan Africa has the highest level in the world of women involved in entrepreneurial activity. And Botswana, Ghana, and South Africa are the three leading countries. You know that, of course. So everything you read and hear about women entrepreneurs in Africa boils down to funding. Not only funding, but funding is extremely important. And that is, of course, very much true also in the digital sector. So in the African Continental Free Trade Agreement, this is a huge potential. You mentioned some figures in the beginning, and you also all refer to it. So of course, spreading the knowledge that is there, but also using the trade agreement. And there has been a lot of research and recommendations here. The United Nations have looked at it, and lots of other research organizations have provided suggestions on how to use the trade agreement in a more gender-inclusive way. Because also trade in Africa, of course, is biased in favor of men. And to take a figure from another country that has not been mentioned, in Rwanda, 74% of those engaged in cross-border trade are women. So the case you made for making it easier for phone call across the border, and making it also easier to transport, making it easier to have customs standards, standards overall, rules of origin, and so it’s so important for women. So you need to use the African Free Trade Continental Agreement to improve the financial literacy and access to capital for women, and also the digital literacy, of course. And inform the institutional framework and the regulatory environment to remove barriers, especially for women. You need to promote inclusion and participation, and you need to invest in girls’ education, because that’s, of course, where we. it start, and you need to remove the obstacles for services, and you need to look at labor rights. So there’s a whole list of what can be done, and I was just, before boarding the plane to Geneva, I was looking at the website of the Secretariat of the African Free Trade Contract, and I see that there’s so many initiatives, there’s actually a lot going on, and there’s a lot of proposals, and there are lots of different organizations and networks who are trying to work with it. So the potential is there, I think the awareness is there, we just need to put it in action, and I think the importance of having this dialogue between those who are really on the field working with the micro-micro-companies in the villages all across Africa, not only in the villages for that sake, and the Accra Secretariat and those who make the decision is very important. But I’ve seen only this short time that the agreement has been into force, of course we had COVID, but a lot of time was lost for everybody, there has been a lot of progress, because trade and trade agreements can actually be used as a leverage for women, but we need to be very aware of having the gender glasses on all the time, and this is a fantastic possibility. So thank you, Cedric, and to the Konrad Adenauer Foundation for trying to highlight this problem for a more systematic way.

Moderator:
Thank you. Thank you. Thank you very much for these points. I would, before turning to you, dear audience, I hope you also have written some questions and points that you would like to share with us. Take the benefit of asking one more round of quick questions. So one that goes a bit to you, Cecilia, but also to Sarah, because there was one thing that you mentioned right at the beginning. it is hard to grasp the informal sector and so from a policy perspective how, so the question to Sarah more specifically would be if you have any tips and pointers because you know your work, you’ve done research on it, how for policymakers it could be made easier to know how and who they’re trying to make the policies for and to you Cecilia maybe if we’ve seen in some of the empowerment policies if there’s, I’m reflecting on what Sarah will hopefully share with us, kind of have as an idea of pointers for policy interventions that could really help because I like the statistic that you mentioned about women entrepreneurs, it’s the highest number globally in Africa but I also unfortunately a lot of them fail very quickly of these startups of these entrepreneurs and how we can sustainably keep them in the spirit of sustainable trade and trade for people, keep them and enable them. Thank you. Okay

Sarah Frimpong:
thank you very much Cedric. With respect to the informal sector I’m just going to sing a very popular song that we sing when it comes to research concerning Africa, data, data, data. The challenge lies with data and I believe that it is important to actually conduct extensive research into the informal sector to be able to put into proper perspective what the various layers are because Cecilia mentioned that there are a lot of interventions and programs and initiatives that have been designed for the implementation of the African continental free trade area but one challenge I see is that we seem to have put the informal sector into one bracket. and what works for an aspect of the informal sector might not necessarily work for another aspect because their needs are different, their levels are different, their skills and capacities are different, even though we’ve picked one big brush and painted all of them as the informal sector. So we need to critically look into what the informal sector is. It is very intricate. Bring the pieces apart, know what the individual needs are, and know what interventions would work for one and what interventions would work for another. So we need to do the hard work of collecting the data on the informal sector to be able to put everything into proper perspective and then kind of diagnose their problems to design the right interventions for the various levels. So that’s just.

Cecilia Malmström:
I think this is key, data, data, data. We need that all over the world because, of course, the informal sector is so broad and is so unknown, and it differs so much not only between countries but also within countries because there are different circumstances and different possibilities and so on. So it’s really hard to design general policies when it comes to that, apart from what we need, everybody knows. I mean, it’s digitalization, training, access to capital, removal of sort of formal discriminatory rules and laws and attitudes. That can be done. Of course, we can also hear in the WTO building. I mean, if we had a plurilateral agreement on e-commerce, for instance, we could do something to standardize e-contracts and e-signatures. I mean, this would be helpful for everybody, but the actual assistance for each and every company is very hard to design, and for that, we need a lot of research, such as the one you’re doing now in your PhD and others, to see what can happen. So I think that on a policy level, abolish the formal obstacles and make sure that you broadly engage. in leveling up the knowledge and the accessibility and, of course, access to capital. There have been experiments made now, of course, microcompanies are very, very small, so they’re not very much engaged in bidding and public procurement, but only by anonymizing applications on public procurement projects, and we see that all over the world. The amount of projects that goes to women increases all over the world, because there is some sort of hidden discrimination, you see it’s a man’s, okay, that’s probably more high quality. So, if you anonymize, these are lots of things you can do to sort of facilitate and to do this, but yes, data, data, data.

Moderator:
Wonderful. Thank you very much. Caitlin? Sarah? Princess? If you have some additional points that you might add to that, otherwise, I will open it to the floor, if you have some reactions.

Princess Puskas:
Not really, but I think as they are talking about the data, data, data, it is important to have a balance between the regulation and the supervision, right, because it’s through this and the regulation and supervision of the financial technologies, because this would be able to enable innovation and it will as well safeguard the financial stability, because that’s what every country needs, and then it also would contribute significantly on ensuring consumer protection. So, I believe that in a conclusion, that is also important, because that’s when we would be able to achieve the single digital market, if each economy works together, you know, in Africa, we would be able to ultimately have the single digital market for Africa. Thank you.

Cecilia Malmström:
And I’ll just jump in quickly, Cedric. I wanted to maybe lay out what we view as sort of best practices from a digital services trade perspective, and I think this is a message really for the AFCFTA. Because I think what we’ve discussed today is, you know, the undisputed sort of case for digital and how it helps to facilitate, you know, economic growth, diversification, inclusion of women, entrepreneurs, small businesses into the economy. And the pandemic, you know, again, has really accelerated digitization, crystallizing the importance of having high standard digital trade and services rules that can ensure that the benefits of digital tools and new markets really reach those who can benefit from them the most, women and MSMEs. So I wanted to just outline a couple of ideas as we think about how to open markets and create greater access to digital tools and services. First, high standard provisions for data flows and disciplines on data localization across sectors, including financial services. Secondly, prohibitions on requirements to localized facilities. I think this is critically important from the trust perspective that I spoke about a bit earlier and ensuring that services really benefit from best-in-class cybersecurity fraud prevention tools. Third, the use of internationally accepted standards to help facilitate interoperable technologies across borders. This goes back to the small business acceptance use case I spoke about in terms of small businesses being able to leverage low-cost technologies to accept payments, you know, from domestic buyers or international ones. And also, nondiscriminatory treatment of different service providers so that you can really see different types of solutions and services flourish. Of course, I come from traditionally the card industry, but we’ve seen mobile payments play such an incredibly transformative role in the African market. context. I’ll leave it there, Cedric. Thank you. Thank you. Thank you very much. So now

Moderator:
I would like to turn to you, dear audience. You’ve been listening to us for the past almost hour and some. And if you have some questions, please raise your hand. I will try to take a quick round of three questions. I will start in the back. I have you that I see right there. I have you as well. Wait just a quick moment. And then we’ll take three and then we’ll come

Audience:
next for the next round. It’s more of a comment, you know, because India offers many of the discussions which you have already been discussing and problems highlighted with respect to language, digitalization, financing. Oconfor, which is recently being introduced, is an MSME financing solution. So it’s O-C-E-N, Oconfor, which has been tested out for the last two years, pilot study done, and they find it very successful. And it will be online going soon, I think, any time in a couple of days. So that’s one solution which India can offer. And you could always extend your consultation with Indian officers and persons involved in the activities. See, there are various other options also, digitalization, because we have also started this UPI scheme, United Payment Interface, which actually does mobile transfers of money. And you know, it’s like almost like no payment or zero payment. So the transaction fees are very low. So there are multiple solutions which India as a country can offer to the WTO and the participants here who are looking for solutions. So I’m from Centre for WTO Studies as an introduction, Murali Kallumal.

Moderator:
Please. No, you. Yes. Thank you.

Audience:
Thank you, and good morning to everyone. I’m happy to say thank you to our panelists who have really delved into the real situation happening, the fact that they talked about the African continental free trade and what it has to offer, especially to women, the SMEs. And I’d like to share a few thoughts on what Ghana is doing. Ghana, on the basis of the National Trade Facilitation Committee, has created what we call the Trade and Gender Committee, with its terms of reference. And what it does is to be in contact with the women, one, sensitization. First of all, if they do not know about the African continental free trade, they will not be able to assess what is there for them. So it was very important for us to sensitize them in the form of training to expose them to the African continental free trade and what they can benefit from it, because it was very important. Then the second thing we did was to sensitize the border agencies, especially for the cross-border trading, because not all the border agencies are gender sensitive. So we have identified the problems that they experience at the borders. So we have sensitized the border agencies and created what we call gender champions. These gender champions were selected on the basis of how they interact with the women traders, and how they will appreciate and help them when they are finding it difficult. Because one of the things that the women do find difficult is documentation. We have created what we call… simplified trade regime, that women with less than $5,000 worth of goods should be made to pass through easily, without any difficulty. And with the border champions, what we are trying to do is to sensitize them and train them on what is gender, what is gender-based violence or harassment, and how they, as an institution, for example, we have the customs, we have the immigration, we have the food and drug standards authority, and all those agencies, government, both the regulatory and the private sector. So that when the trader comes, a woman trader, an SME, small, medium-scale entrepreneur, you assist that person to go through it simply. And the next stage that we are trying to do is to bring all of them, the trader, the border agency, and then the logistics and transport users, I mean, providers, so that together we can sit at one table and discuss it thoroughly. That is coming on later in the year. But these are some of the things that we have put in practice, and it’s working fine. With that, we go back to, as it were, review and monitor what we’ve done, the training we have done for the traders, and to see how they have imbibed it and how they are using it, because we believe that the training is very important. So let me say thank you.

Moderator:
Thank you. Thank you very much. Very impressive. I have you in the back, sir, and then I’ll collect the question from you and then bring it back to the panel.

Audience:
Hello. My name is Ruben Alendo. I’m from the United Kingdom, but I have Congolese heritage in me. And what I really want to discuss is young people. people in politics and in power, essentially. Because one of the things that you did mention was that the government should be very collaborative to make sure that they bring everyone on board. And as you’ve mentioned, that there’s discrimination in regards to women, but there’s mostly discrimination in regards to young people in general. With the lack of representation of young people, I was at the London School of Economics Africa Summit, and they really showcased the lack of youth policies in regards to African countries and how the youth are really being neglected around this area. And I was having a discussion with someone yesterday, and I saw that what they said is that young people have to create their own tables in order to be noticed and to also be shown some sort of respect. So my question is, essentially is, do young people have to create their own table so that their voice can be amplified? And how are you going to target young people in general? Thank you very much.

Moderator:
Thank you, and then we’ll collect the second question and bring it to the panelists.

Audience:
Oh, hi, my name is Nelly Cheboy from Kenya, and I work on digital inclusion. So I’m training people in the village how to access remote work, how to work for Upwork, how to, and what I’m constantly seeing is that someone can build a website, but when it comes to hosting their website, they don’t have a visa card, so they can’t host their website. Someone is working really hard on Upwork, they have made a lot of money, probably like $400, which is transformation of our money, all of a sudden their account is blocked. So I think the problem is that, so the people on the ground, they have the tools, they have the tenacity, but what is constantly happening is that they’re being blocked, either by not having access to visa cards, or they just earn money and their account is just frozen for some reason. So I don’t know if that is in your forte, Caitlin, but I’d love to hear what you think about that.

Moderator:
Thank you very much. I have the two comments, if any of you want to react, and also two questions, one creating the own table for the youth, and seeing some of the, I’ll very broadly call them technical and hard issues on mobile payment, such as visa in that case, specifically.

Cathleen McDonalds:
If it’s okay, maybe I’ll just jump in first, given the specific question, and thank you for raising some of the challenges that you’ve seen, because I think that sounds like not a very good customer experience, and so it isn’t quite within my wheelhouse to understand what might be happening technically, but I’d love to catch you after the session here a little bit more, and see what we can do to be supportive. And then I would just acknowledge it was really interesting to hear from the government of India and government of Ghana what you’re doing to help facilitate digital financial inclusion. I think in the case of India, in your G20 host year, we saw a huge focus on this element and the concept of digital public infrastructure, and how that could be scaled, so congratulations on such a successful G20 host year, and look forward to seeing how that carries forward. And in the case of Ghana, it sounds like you’re working on interventions that really spoke directly to some of the elements that the young African trade experts mentioned. And on the youth element, I would just congratulate the trade experts for their real focus on bringing young women into the conversation and elevating their voices from those who are seeing the world from a fresh perspective. Thanks.

Audience:
Just to clarify really quickly. Sorry. My question was, I think to, let’s say like if you want to have a card, you need a bank, and most of these youth are on mobile payments. So how can someone with mobile payments, with M-Pesa account, not really a bank account, be able to have a Visa card? That was the question. Sorry if it wasn’t clear.

Princess Puskas:
Just in the interest of time, why don’t I connect you offline. Thanks. Okay. All right. Thank you so much. I guess, like for example, although she’ll take you offline, I’ll give you an example that we have Orange Money, right, that is also one of the mobile payments. It has a card. You know, it’s only that currently because they are limited services, the costs are a bit too high. It’s something that we’re advocating for, that let’s have less costs because, and as much as it’s a good thing because you don’t need an account, a bank account, it has its own Visa card, right? So you can actually pay, you can transfer money, you can buy electricity. You know, it’s actually a good thing. So I guess because it’s a starting point, ultimately we’ll all get there to a point where you can actually have a Visa card and not necessarily without having a bank account. And going on to the first speaker about the OECN in India, I guess you mentioned forming the United Payment Interface and helps with lowering transaction costs. I feel that’s very commendable, like Kausalyn said, given that that also is contributing to the Sustainable Development Goals, TARGET 10C, which aims at reducing costs by 3%. So I feel that you guys are on the right track and it’s actually commendable on what you’re doing. And relating to Ghana, I feel still it’s commendable and not wanting to take away the fact that the African Export-Import Bank had partnered with the EFCFTA that we keep on talking about. And what is important that I feel maybe did not come out is having them launch the Pan-African Payment Settlement System. that is actually helping develop and to boost intra-African trade by transforming and facilitating clearing and settlements for cross-border trade, as you had mentioned what you are doing for Ghana. So I feel that is also commendable. Lastly, we need to sit around the table and have our voices heard, because we live in a time where things are not done the way they were done in the past. So in as much as we may have the elders back then to come and help, they could guide us, but the youth need to sit down. We need to have our voices amplified, because we understand what is happening right now. So we need to actually even guide where necessary, because we are the future. So if we allow for that gap to happen, who is ever going to fill it? So I feel it is about time where we sit down and have our voices amplified, get to look at what is happening and how is it that we can improve the digital technology space. So I feel you have a valid point, and yes, to the youth, we keep on saying women, women, women. We are actually having a conversation, I think yesterday, with the ambassador of Germany. Like we are saying women, and my colleague here has said, it is like, what do you call it? It is not balanced, right? So we keep on saying women, women, women, women, but don’t you have a balance between the males and the females? It is not like we are living out the males in this case, and I love the fact that you put it on the broad perspective that it is the youth, they are also part of it. It is only that we realize there is more need to lean towards the women, because we see that there are problems there, right? But that does not mean we are living out the other agenda. Thank you so much.

Audience:
Thank you very much for answering my question.

Moderator:
I will take a last round of three questions. I have one over there. I have Hannah who has been waiting, and if I have a last question, otherwise we will take… Over there in the back, so I will start in that order if you want to start on the right and then or from my right.

Audience:
Hello there, wonderful panel, thank you. So we have heard today of many instances of women businesses and entrepreneurship, which is wonderful. But my question has to do with, has consideration been made for women laborers and how would digital trade and finance impact women workers who are not entrepreneurs?

Moderator:
All right, thank you very much.

Audience:
Thank you so much for that, Cedric. My name is Hannah Norberg and I am the very, very, very proud initiator and the president of the Trade Express. And so I have one comment and one question for the panel. So we are talking entrepreneurs, we are talking women, we are talking youth, and that is all really, really great. And we are talking about all the knowledge that is out there. But we also have to make sure that this knowledge is embedded in the coming leaders. And so that is why the Trade Express last year launched Yates, the Young African Trade Express. And we really, really, really hope that we can continue doing this. We are a not-for-profit, all-volunteer organization. And so we want to find ways of doing that going forward. But this is really a testament to how much you can do, not only in getting women a seat at the table, youth at the seat of the table, entrepreneurs at the seat of a table, but you have to get them ready for that seat. it’s not easy to just be thrown in there so the best description that i have gotten about the trade experts is that we shortened the road to the podium and i think these ladies have just been in this program for one year last year it came here on shaky legs on their first trip to geneva and they’re owning it now uh… i think that’s a really really important uh… position to know here right and that they’re on a freaking panel with the feeling i’m from right like nobody get to do that and in that so uh… that really i’m so proud of you lately my question and i do have one uh… is about the e-commerce moratorium which is a project that we need to express have been of angling with um… the e-commerce moratorium uh… in danger uh… so for those who might not know it it’s about that we don’t pay tax paris on digitally delivered services and we haven’t done that for the first twenty five years to get out of a misnomer because it sounds like amazon goods but it services digitally delivered services and we went around the world and um… collected stories about how that works but i would love to take the opportunity uh… to get the uh… input from the fifteen panel at from caitlin and princess and sarah on that but you’re seeing that the e-commerce moratorium have done and uh… if it was scrapped what that would mean uh… on the ground in africa

Moderator:
thank you and we have one final question of the day

Audience:
my name is jay so my question is how could we make it to become more practical because in a way for me from kenya it looks like the company is already moving mpsa is here everything is here but policy is still stuck in our own world right and then we come later we want to make rules for them but how could we pick these success stories which already exist and make them into data and then scale up and make other organization become more sustainable. Thank you.

Moderator:
I’ll squeeze in exceptionally one quick question and then hope that we don’t get

Audience:
thrown out of the room. Good morning, my name is Mohamed Tamoura, managing partner at LPF Council in the Kingdom of Morocco. It’s a law firm and arbitration boutique and I would like to comment on a sister from Kenya issues of payment. I have experienced in the past that GAFA suspended the payment by visa top-up card and I think we need to work with the GAFA on having local partners in order to enable African to pay in local currency and also to access to paying services directly without going through a hard currency or mobile visa payments because GAFA are thinking that the only way of paying such services that are sold worldwide is through the the normal visa cards but we do have other type of visa card that are unfortunately not accepted. So I think there is a work to do on that to enable African to get access to such services.

Moderator:
Thank you. Thank you very much. So a broad range of question. The consideration of women laborers and we have the moratorium, the endangered moratorium I shall call it and also a bit of the if you want to react to the gatekeeping I will call it to GAFA to use the EU term for it. Do I have volunteers for any of the questions?

Cecilia Malmström:
Thank you for your question on women’s labours. It’s a little bit outside today’s topic, but it doesn’t mean that it’s less important. And what we see in most modern trade agreements is that that is actually included, that there is reference to the ILO core conventions giving rights for women and men to unionise, certain non-discriminatory, the right for wage negotiations and so on. So that is in all of the European Union’s trade agreements, for instance, and it’s also in the CPTPP agreement, and it’s coming more and more in other agreements as well. So that is being highlighted. So that, of course, what could be done on the general level, then it’s to the different companies to implement it. But from the European Union side, we work a lot with ILO also on the ground to try to highlight when there are systematic abuses and so on. It doesn’t mean that all is fine and fancy. We’ve seen terrible violations of this in Rana Plaza in Bangladesh 10 years ago. But that also led to an awareness that I think at least something is moving. So it’s a super important question, but it was slightly outside the scheme of today.

Sarah Frimpong:
Okay, Cedric, may I attempt to answer Hannah’s question? Okay, from all the hard work that the trade experts have done with respect to the moratorium, I think that we should take cognizance of the fact that renewing the moratorium, the cost that comes with renewing it is minimal comparing it to the gains that would actually be made if we renew the moratorium. So in the interest of women and even the discussions that we’ve had, the gains that we stand to make, I think that I am of the view that putting African women and considering African women and even women in general, renewing the moratorium tends to include women in the trade specter and we get to gain more than we lose.

Moderator:
Thank you very much. Yes, if you want to jump in.

Cathleen McDonalds:
Sure, I’ll just jump in quickly and I think the theme of the panel has been how access to more services and digitally enabled services is a net benefit for economies, for diversification and particularly for women and MSMEs, so I think Sarah put it quite well, but in terms of the moratorium, we certainly would view, if it were not to be extended, that that could have a downward negative effect on the offerings and availability of certain digital tools and services that are so key to inclusion. And just maybe to quickly respond to the comments on payments, one, I would just note that in a number of jurisdictions, including in the African continent, we do offer what’s called Visa Net Settlement Service, which means our services are provided in local currency when domestic services and I think couldn’t agree more with your observation that perhaps more competition in payments is a good thing and that is certainly something that we like to see. It helps make us stronger, helps us focus on investing in innovation, security, drives down costs and importantly, provides a greater suite of options to consumers and small businesses and others that are interacting with the digital economy through payments. Thanks.

Moderator:
All right. With this, I would like to invite you to join me in thanking our wonderful panelists and also thank you for attending this session. I hope you will stay true to us and please be in touch with us, come and see us. Let’s follow, and that’s what I wrote down, let’s keep the conversation going. So thank you very much for joining and have a wonderful WTO public forum.