WTO Public Forum 2018

2 Oct 2018 to 4 Oct 2018
World Trade Organization, Centre William Rappard, Rue de Lausanne 154
Geneva, Switzerland

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Event report/s:
Marco Lotti

The session was moderated by Mr Felix Maonera (Deputy Head at the African, Caribbean and Pacific Group (ACP) Geneva Office) who started by explaining that the session will focus on the impact of technology on production and trade in small states, least developed countries (LDCs) and ACP countries. He stated that technology has the power to bring global and local markets together, and that innovation is an important resource for increasing  production in the manufacturing sector. He also highlighted that for such states, transferring technology does not simply mean exporting or importing specific technologies, rather, it should mean building local capacity for efficient use and development of the technology.

Mr Andrew Staines (Ambassador and Deputy Permanent Representative of the United Kingdom Mission to the UN and Other International Organizations in Geneva) explained that the UK is making efforts in ensuring that small states can participate meaningfully in digital commerce. He explained that the recently-launched UK development plan also considers new forms of trade, including the digital economy. He further illustrated the UK Mission’s efforts towards aiding LDCs: the UK supports capacity-building programmes such as DiploFoundation’s course on digital commerce, targeting Geneva-based diplomats from LDCs. Moreover, the UK has supported the launch of the Commonwealth Standards Network, namely a platform for Commonwealth countries to exchange ideas, share best practices and impart knowledge, aiming to facilitate trade and foster innovation across the Commonwealth through the increased use of international standards. He concluded by saying that the UK also supports other programmes aiming to link trade and development (i.e. ‘how to do development in a digital world’), to promote digital commerce as a key player in curbing the digital divide, and to promote financial inclusion.

Mr Frank Van Rompaey (Head of the UNIDO Office in Geneva, United Nations Development Organisation (UNIDO)) first considered that industrialisation is a priority for LDCs as a way to add value to communities and start participating in digital trade. He maintained that the main focus of LDCs should still remain on the manufacturing sector which, compared to the service sector, is the actual source of technological development. He explained that the ‘Industrial Revolution 3.0’ has already started; however, in LDCs this process has still not been fully accomplished. Technology has the power to allow global value chains to emerge. The outcome of the revolution is that labour costs are expected to rise and hence force labour-intensive industries to relocate to LDCs. He then maintained that we cannot yet speak of the ‘Industrial Revolution 4.0’ because this process has still not affected production chains. He concluded by affirming that the opportunities and risks of the digitalisation of the economy largely depend on the type of the industry under consideration. For labour-intensive industries, the impact will not be as drastic as some commentators ventilate. He explained that there is still a clear window of opportunity for LDCs within the 2030 development agenda, especially if they focus on the manufacturing sector. In order for ‘Industry 4.0’ to develop, cyber production systems, a high-level of energy supply and well-integrated systems are needed. LDCs do not have those factors yet and their economies need to transform structurally first.

Ms Marilia Maciel (Digital Policy Senior Researcher at DiploFoundation) considered that LDCs need to put policies in place in order to participate in the digital economy. At the same time, she said that LDCs need capacity-building programmes to allow them to also take part in policy discussions at the multilateral level.

She explained that DiploFoundation’s mission is to analyse, map, decrypt, and build information and knowledge around what is discussed in the ‘very scattered policy debate in Geneva’. She maintained that most of the sessions addressing capacity building at the WTO Public Forum target mainly small and medium enterprises (SMEs). However, she stressed the importance of not forgetting the policymakers, ‘those who develop the relevant policies for those who are on the ground’.

She then considered the three main challenges regarding capacity-development programmes for policy-makers:

 

  • First, there is an increasing intersection between digital and trade policies. Such an intersection was also present in the past (e.g. considering issues such as online consumer protection and privacy); however, the volume and the breadth of these issues are unprecedented. Moreover, such an intersection is not a language shift but a knowledge one: most of the regional trade agreements already have a clear digital component. And even if some countries are not part of such agreements, they are of importance to them as ‘when they want to be part of it in a later stage, the framework will have been already discussed for them’.

  • Second, there is doubt over if and how to engage in such negotiations. Negotiators will need to take their decisions based on facts, on the knowledge of the matter at stake. If we are talking about the digital economy, this entails a basic understanding on how the Internet works, its infrastructure, and the actors involved.

  • Third, trade negotiators need to find a point of common dialogue considered to be the existing asymmetries in digital development. Companies that are data intensive (e.g. Apple) have a budget that is higher than the economies of four LDCs together. She concluded by stating that this is precisely where capacity building comes into the picture. In the Digital Commerce course developed by DiploFoundation, the approach taken was factual, policy-based, and multidisciplinary as it comprised legal, policy and technical discussions.

Gilles D. Bana

The session was moderated by Ms Latifa Elbouabdellaoui (Directeur des Relations Commerciales Internationales, Ministère de l’Industrie, de l’Investissement, du Commerce et de l’Economie Numérique, Royaume du Maroc), who started by introducing the panellists. She said that there is a lack of infrastructures and digital skills in Africa. According to her, new technologies are present, but there is still so much to be done towards the development of the continent. In addition, Elbouabdellaoui said that when it come to digital trade, Africa is the least integrated continent. She argued that African countries must invest in education and digital infrastructures for better competitiveness.

Ms Marion Jansen (Chief Economist, International Trade Center (ITC) started by going through the ITC report, ‘SME Competitiveness Outlook 2018: Business Ecosystems for the Digital Age’. She talked about platform revolution and said that we are entering a new era of digital platforms. She pointed to the challenges and opportunities that this creates for small and medium-sized enterprises (SMEs). Jansen said that the information and communications technology (ICT) infrastrucure remains quite important for digital trade and that there are still many people offline, in places such as Nigeria, India, etc.

Jansen gave the example of Rwanda integrating ICT into logistics services, by using drones to deliver medicine. She noted the importance of building trust in the digital economy. According to her, big data has a great role to play in helping SMEs. She said that there is a need for a plan of action and for education in order to move rapidly into the digital age. In response to a question from the moderator, she emphasised the importance of the interoperability of technology. Finally, she talked about the issue of privacy and cybersecurity of enterprises. According to her, the key point for the SMEs is to have trust.

Mr Ajay Kumar Bramdeo (Ambassador, Permanent Representative of the African Union to the United Nations and other Geneva-based Economic Organizations) started by thanking the moderator. He highlighted the African Continental Free Trade Area (AfCTA) signed last March in Rwanda. He argued that Africa needs to integrate itself into the gobal digital market soon, as it would bring so many opportunities to the continent.

Furthermore, Bramdeo asked how we can shape the challenges of the digital economy to address the issues of development. According to him, four African countries (South Africa, Tunisia, Egypt, and Marocco) count for more than 80% of the exports. He emphasised the potential of e-commerce in increasing the competitiveness of the private sector, creativity, etc. He said that the integration of African countries in digital trade would help reduce poverty. In addition, he said that there is a need for co-operation between public authorities, the private sector, and international organisations.

Bramdeo pointed to issue of legislation when it comes to regulating digital trade. He said that it is often an obstacle to innovation. He also highlighted the role of the African Union in facilitating partnership between countries. Finally, he stressed that ownership of data is a big issue in digital trade in Africa.

Mr Diego Aulestia (Ambassador and Permanent Representative of Ecuador to the WTO and other economic organizations based in Geneva) asked what the context of digital trade in developing countries, such as Ecuador, was. He said that the benefits of digitalisation will not be automatic and that there is a need for economic growth, productivity, jobs, and transformation in international trade. How asked how developing countries could increase their share of the profits.

In addition, Aulestia noted that 57% of enterprises use a digital signature. He said that there are three major challenges: investment, regulation, and industrial policy. He further explained the development implications of e-commerce, for example, the transfer of technology, access to infrastructure, etc. Moreover, he mentioned that there is a need for digital capabilities, data sovereignty, industrial policy, tax policy, and articulation with manufacturing activities, etc.

Finally, he talked about the Agenda Elac2020 : improving digital infrastructure, digital government, regional digital market, etc. He said that Latin America, as a region wants more co-operation, for example, ‘South-South cooperation and Triangular’.


 

Gilles D. Bana

Mr Xinquan Tu (Dean and Professor, China Institute for WTO Studies, University of International Business and Economics) served as moderator of the session. He started by introducing the panellists. He said that the discussions would focus on the possible role of e-commerce in enhancing the inclusiveness of global value chains (GVCs).

Mr Xiangchen Zhang (Permanent Representative and Ambassador Extraordinary and Plenipotentiary to the WTO), started by explaining the transformation of e-commerce in everyday activities. He noted the potential of including micro, small, and medium-sized enterprises (MSMEs) and small and medium-sized enterprises (SMEs) into global trade.

In addition, Zhang stressed how e-commerce facilitates the inclusion of these enterprises in GVCs. He noted that e-commerce must have clear digital policies. We need infrastructure programmes for these countries. He also explained the role of the Chinese government in facilitating digital trade pointing out the dialogue between stakeholders.

Ms Arancha González (Executive Director, International Trade Centre (ITC)) explained the ‘smart way’ for companies to participate takes advantage of the possibility of trade without intermediation.  González said that 80% of online enterprises are micro-enterprises.

Furthermore, she noted the challenges of monopoly of the benefits of digital trade, electronic payment for services, consumer protection, logistics, national financial services, and product quality. Answering a question from the moderator, she said that China has worked on the eco-system approach to facilitate trade online. She also noted that the International Trade Centre (ITC) works with the countries in helping them to improve the online services and market.

Mr Ricardo Meléndez-Ortiz (Chief Executive, International Centre for Trade and Sustainable Development (ICTSD)), talked about the inclusiveness of MSMEs. According to a United Nations report, 52% of the world population is still offline. In addition, he said that the GVCs are largely based on physical infrastructures. He noted the complex issue of achieving connectivity without the necessary digital skills and human resources.

According to Meléndez-Ortiz, we need to work on facilitating trade using digital resources, for example, applications and platforms for the connectivity. More important, we need to improve gender equality for women. He said that we also need to resolve the deeper issues of security and privacy, and cross-border of data flows.  He emphasised the protection of the consumer as well.

Mr Jian Wang (Chair Professor of International Business and E-business, University of International Business and Economics), explained that rules are based on business practices and business models in China. He presented ‘the Cross-border E-commerce Innovation and Implication for Inclusive Trade: the Case of China’ He said that these transactions are very important for both exporter and importer. He noted the role of transactions in international trade. In China, cross-border e-commerce has an eco-system and market structure. According to Wang, there are immerging third-party platforms in China to facilitate trade. He emphasised the importance of business to consumer (B2C) trade. 

Furthermore, Wang gave the example of ‘Onetouch’ for paperless trading and integrated service.  He mentioned product quality protection, protection period, and payment protection as important concepts and talked about matching buyers with sellers. He noted the large role played by the Chinese government in facilitating the ‘Emerging Model of Private Single Window Integrated Service Platform’. This platform deals with e-registration, e-inspection, e-ports, etc.  He asked: how can we make sure that cross-border e-commerce is based on a secure, trusted global environment? He noted that we need stability, predictability, and consistency. He mentioned the role of an appropriate legal environment with mutual respect and co-operation in cross-border data flows.

Finally, he gave the example of the National Cross-border E-trade Pilot Zone (Integrated Pilot Zones, B2B) in 35 cities. He said that this business practice can be used by both public and private platforms. He stressed the exchange of information, willingness. and mindset needed in order to achieve cross-border e-commerce.

 

Katharina Hoene

Moderated by Ms Sanya Smith (Legal Advisor, Third World Network), the session explored 'the implications of the services domestic regulation disciplines being proposed at the World Trade Organization (WTO) in the context of rapidly evolving technology and technology enabled trade’.

The ongoing negotiations on domestic regulation disciplines relate to the General Agreement on Trade in Services (GATS) and the decision on domestic regulation, which ‘call upon WTO members to develop any necessary disciplines to ensure that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures do not constitute unnecessary barriers to trade in services’. In other words, the current debate is about, to what extent domestic regulations pose unnecessary barriers to trade; and if proposed domestic regulation principles ensure domestic regulations do not impose stricter rules than necessary.

 

Ms Vahini Naidu (Foreign Economic Representative, South African Permanent Mission to the WTO), underlined the importance of exploring the implications of the proposed domestic regulation principles. She detailed qualification requirements and procedures, technical standards, and licensing requirements and procedures, in this context. Typically, these stipulate what a foreign service provider needs to do in order to establish itself in a given market. The argument by proponents of the domestic regulation disciplines, is that domestic rules should be reasonable, and should not unduly impair the provision of services by foreign providers. Naidu pointed out that this debate concerns all levels of government, and can potentially impact the past and future of domestic regulations. She raised concerns that governments would be constrained in their ability to regulate, while domestic priorities and national objectives could also be constrained. The proposed domestic regulation disciplines would remove considerations for unique circumstances of each country. There are also fears that the future of domestic policies and developments would be severely constrained, especially in light of new technological developments. Naidu alluded that this might make it very difficult for African countries to catch-up, and make it even harder to move away from being consumers of emerging technology, to being producers.

 

Mr Parminder Jeet Singh (Executive Director, IT for Change), pointed out that proponents often argue that domestic regulation disciplines do not deal with substance, but only with structure. Yet, structure often becomes substance. He explained that the proposal mentions 'objective' and 'transparent' approaches, however, only in relatively stable contexts and worldviews, these keywords are attainable. Singh argued that in times of fundamental change such as these, there can be no creation of a reasonable global worldview. He argued that the digital revolution has the same level of impact as the industrial revolution, and the impact of digital technologies are being felt in all sectors. This means that domestic regulations need to be flexible and adaptable to changing circumstances. The proposed domestic regulation disciplines can prevent this. Singh was concerned by the fact that, when domestic approaches are compared to emerging global standards, many issues under domestic regulation principles may be found unreasonable.

Mr Andrew Cornford (Counsellor, Observatoire de la Finance), talked about his work as part of the United Nations Conference on Trade and Development (UNCTAD). This included, the Uruguay Round of multilateral trade negotiations in the late 1980s and early 1990s, and the Basel Accords (Basel II and III), dealing with banking regulation and standards.

 

Marilia Maciel

Ms Claudia Schmucker (Head of the Globalisation and World Economy Program, German Council on Foreign Relations (DGAP)), started by highlighting the important role of micro, small, and medium enterprises (MSMEs) in the global economy, including for promoting GDP growth. Trade policy can either hamper or facilitate the future inclusion of small and medium sized enterprises (SMEs) in global value chains (GVCs). However, SMEs are do not only react to the legal environment, they can influence it as well.

Mr Christian Diemer (CEO, Heitkamp & Thumann Group), stated that the impact of digitisation on SMEs depend on whether they are in the business-to-customer (B2C) or business-to-business (B2B) segment. In B2B, companies are less affected by digitisation, while B2C models need to change and adapt very fast. For a B2B company like Thumann, digitisation is just another step in evolution, and does not put into question the core business model. Nevertheless, there are new challenges for these companies, such as the rise in cybercrime. Small businesses often cannot afford dedicated IT security teams.

Ms Caroline King, (Senior Director, Government Relations, Global Head Business Support, Digital Government, SAP AG) noted that cycles of innovation are becoming faster, and company growth is usually happening through start-up and SME acquisitions. Large companies are interested in promoting incubators, innovation centres and capacity building.

Mr Robert Koopman, (Chief Economist and Director, Economic Research and Statistics Division, WTO) noted that SMEs are not well integrated into the global economy. There are barriers related to cross-border commerce, such as understanding the commercial and regulatory environments. MSMEs represent a large share of firms, but a relatively small share of global output (GDP) and exports.

Mr Ilja Nothnagel (Managing Director International Economic Policy, Association of German Chambers of Commerce and Industry (DIHK)), commented on possible opportunities and threats that digitalisation can pose for MSMEs. He noted that companies are hiring more workers, but in different sectors.

Schmucker asked the speakers to reflect on the role of WTO negotiators, and what they can do to facilitate trade, fight protectionism, and integrate SMEs in GVCs.

Diemer disapproved of over-regulation. He opined that the European Data Protection Regulation (GDPR) is too strict for MSMEs, and it slows down businesses. The WTO should help promote harmonised global standards that simplify the regulatory patchwork that companies are currently confronted with.

King opined that multilateral rules need to be stable, predictable, and harmonised. Markets need to be as open as possible for MSMEs and other companies.

According to Koopman, there is a general recognition that common legal standards would bring certainty, increased transparency, and lower costs for firms. The challenge is agreeing on specific standards. There are already agreements in place in the WTO that are important for MSMEs and digitisation, such as the Information technology Agreement (ITA) and the Trade Facilitation Agreement (TFA).

Questions from the floor were related to the role of the WTO in protecting MSMEs against Internet giants; national policies that demand local content and data localisation; costs of introduction of new technologies; and the importance of the Digital Geneva Convention proposed by Microsoft.

According to Diemer, small companies could be threatened by large Internet companies, but medium companies will not go out of business. Moreover, tech giants are buying creativity when they buy start-ups, which could also be positive. King reminded that Google, Apple, Facebook, Amazon, Alibaba, and Microsoft are just a part of the Internet economy. There are many other innovative companies being created. In Germany, while large companies are crashing, MSMEs are thriving.

Koopman, opined that there is a need to understand which regulations can be better introduced on national or international levels. There are economic benefits of regulatory coherence, and a Digital Geneva Convention laying out principles could be an useful development.

Diemer opposed regulation that requires companies to open offices in other countries. He explained that his company opened offices in some countries to comply with local content regulations, but it was very costly to operate and the offices were closed.

Ilia argued that protecting small companies from large ones is not a good path, because they lose dynamism and the capacity to compete. It is better to strengthen competition norms, and to introduce measures to support SMEs, such as helping them deal with border procedures. He mentioned that the introduction costs of new technologies and processes are lowering, but there is a lack of skilled labor, so human capital costs are going up.

Stefania Grottola

The event was organised by TechUK and addressed the rise of data flows, and technologies like additive manufacturing (3D printing) and their implications for global trade. The meaning of trade is changing, due to the evolution of cross-border data flows, worth trillions to the world economy, and the expectation of the global additive manufacturing market to grow rapidly through 2030. Developments in this field are challenging the notion of who is adding value, and where the value is added. Moderated by Mr Stuart Harbinson (Senior Consultant, Hume Brophy) the event was featured by a panel discussion.

The first panellist H.E. Andrew Staines (Ambassador and Deputy Permanent Representative, UK Mission to the UN and Other International Organisations, Geneva), talked about the trends of the last two decades. He argued that the expansion of service industries, in addition to the shift from analogue to digital, has created more intangible assets in the economy. Moreover, this shift has been characterised by a geographical shift, from the West to the East. As a result, there is an increase in waves of returns in intangible assets. He further added that latest trends have been affected by the fourth industrial revolution, the increased utilisation of data, and by the evolution of new technologies such as Internet of things (IoT), 3D printing, and others. Focusing on the UK, he argued that innovation is the foundation for competition in a revolutionised world of manufacturing. He concluded that in order to address challenges, rules need to be adapted to new scenarios, tackling issues such as freedom of data flows, and data tariffs.

The second panellist Mr Carlos Halasz (Customs Compliance Officer, Global Trade, HP Inc), gave an overview of the global manufacturing sector, which is becoming increasingly automatised. He explained that China has recently became the largest manufacturing hub in the world, while 15% of the EU's total added value comes from the manufacturing sector. With this regard, despite the slowing down trend in recent years, manufacturing continues to shift and centralise in specific regions of the globe. Halasz used the example of 3D printing, which was initially used for prototypes in its beginning stages, is being used for mass production since 2015. The technology is becoming more efficient and less expensive, therefore 3D printing has the potential to be as competitive as traditional manufacturing in the future. He concluded by stressing the importance of the sustainability of 3D technologies, which must able to produce goods without creating waste.

The third panellist Ms Karishma Banga (Senior Research Officer, ODI), focused on Africa, the challenges, and opportunities created by new technologies. She argued that the third industrial revolution created a wave of premature de-industrialisation in developing countries. With regards to the use of new technologies for manufacturing in developing countries; she pointed to an important digital divide that persists, for instance in the use of robotics and 3D printing capabilities. The impact of digitalisation in African countries is lower compared to global statistics. In terms of challenges, African countries are facing issues related to, reshoring activities; the limited future for offshoring; new goods and their related data being increasingly linked to pre-manufacturing; and the slow-down of convergence in manufacturing labor productivity. In terms of opportunities, they can benefit from the lower costs of production, trade and co-ordination, allowing participation in global value chains; and improvements in productivity that boost outputs, exports, jobs, and value. Finally, she concluded with a few recommendations to increase African countries’ competitiveness. There is a need to continue to boost traditional manufacturing, while at the same time, it is crucial to start the digitalisation of such manufacturing. In addition to this approach on traditional manufacturing, actions must be taken related to digital manufacturing, such as investments in Internet and digital technologies, and targeted skills development.

The final panellist was Mr Antony Walker (Deputy CEO, techUK) who gave a policy expert insight on the topic. He argued that the WTO agenda still uses the term e-commerce, despite the fact that the fourth industrial revolution has went way beyond that. He stated that discussions are inevitably politicised, and this could be found in the term revolution that implies dramatic changes, as well as winners and losers. Such discussions cover issues of privacy, children safety online, use of public data, artificial intelligence, and employment to cite a few. With this regard, he stated that while considering the potential to open up to new markets around the world, the aforementioned topics and concerns should be considered. Finally, he concluded by saying that there is a need to embrace the change, and that 'the old model is no longer applicable'.

 

Cedric Amon

The event, which was held in the exact room where the General Agreement on Trade in Services (GATS) had been negotiated before entering into force in January 1995, was organised by the Department of Communication and Media Research of the University of Zurich, the Global Economic Law Network, the Melbourne Law School, and the European Centre for International Political Economy.

The session was moderated by Mr William J. Drake (International Fellow and Lecturer, Department of Communication and Media Research, University of Zurich) and explored the challenges that growing considerations for data localisation policies might present to the international trading system, and the transition to a global digital economy. After a few introductory remarks, the moderator introduced talking points of the session, the costs and potential benefits of data localisation for developing countries; the extent of fit between data localisation and exception provisions in trade agreements; and the potential utility of informal intergovernmental, and inclusive multistakeholder dialogues can provide in data localisation that parallel and enhance trade community efforts.

Ms Mona Farid Badran (Digital Development Consultant, and Associate Professor of the Faculty of Economics and Political Science at Cairo University), who recently published her research on the “Economic impact of data localization in five selected African countries”, said that data localisation provisions would, as of now, affect developed nations more than it would affect developing nations, given their deeper interconnection with the global economy. Regardless, Badran said that data localisation would increase the cost of goods and therefore decrease national income, where these types of policies are implemented.

The economist further mentioned that benefits of data localisation in helping overcome economic issues, and solving privacy and data protection issues are often exaggerated. This is because storing data locally or nationally can be extremely costly in developing countries due to lack of infrastructure, electric power and other resources. She added that data storage policies would not facilitate creation of jobs but instead rely on very few high-skilled workers to be implemented.

The speaker presented the results of an empirical study which pointed to a potential 1,8% drop in the EU's GDP, if a limitation on cross-border flow of data were to be implemented. Therefore, imposing data localisation regulations tends to cut down the benefits of free flow of data, which reduces production costs; increases productivity; supports the creation of new global value chains; and is a driving force for the creation of new jobs worldwide.

In light of this, Badran highlighted the importance of striking a balance between privacy policies and maintaining cross-border flows of data. She mentioned the Asia-Pacific Economic Cooperation's (APEC) approach which enables free flows of data between APEC member states, even if governments do not formally recognise the other country’s privacy regulations, all the while guaranteeing a certain standard of privacy and data protection. This framework also suggests that businesses are held accountable for data protection by independent oversight entities. The EU-US Privacy Shield was mentioned as a further example of privacy protection models.

Finally, Badran underlined the necessity of well-drafted localisation rules, and reminded the audience that many African states had enacted laws on privacy and data protection this year.

Mr Daniel Crosby (Partner at King & Spalding) explained that in his view, no new regulations on data localisation were needed given that the GATS already covers the free flow of services, and data by extension. He mentioned that countries wishing to apply restrictions to data flows for specific reasons are already entitled to do so under the current GATS provisions as long as they are reasonable. He therefore saw no need for the creation of new regulations regarding data flows in the context of a WTO rule.

Additionally, he mentioned the risk of unfair treatment of other nations due to protectionist policies, and cautioned against the risk of countries trying to hide regulatory exceptions under the scope of data localisation.

Similarly to Badran, Crosby also explained that higher costs applied for data localisation would result in higher costs for consumers and businesses, and harm economies rather than help them. He further said that, especially in developing countries, infrastructure and equipment would also need to be imported, as hardware is usually not locally produced, further adding to trade imbalances.

Ms Lee Tuthill (Counsellor, Trade in Services Division, WTO) pointed out that data localisation laws do not necessarily solve concerns regarding fiduciary, law enforcement, privacy protection, industrial policy, cybersecurity and cyber sovereignty. She mentioned the Microsoft-Ireland lawsuit and explained that data localisation was not the main issue at heart, but that the solution rather lies with closer cooperation of law enforcement agencies.

With regards to exception rulings to WTO agreements, Tuthill explained that, no general statements about the acceptance or rejection of exception requests could be made, given that per WTO procedures, rulings on these requests are issued on a case-by-case basis with decisions are rendered by respective panels. The same procedures apply to regulations that might be used to veil restrictions for WTO members.

Ms Neha Mishra (Researcher, Global Economic Law Network, and Doctoral Candidate, University of Melbourne), spoke about the importance of understanding the institutional framework when analysing data flows. Given that these flows occur on so many different levels, locally and globally, it is important to take the complexity of the matter into account, and separate trade disputes from other fields.

The researcher pointed out that the debate about the benefits of data localisation is currently lacking empirical evidence, and is being carried out on a more ideological basis. Speaking about the costs of these policies, Mishra reminded the audience about the risks these policies posed to the open and free nature of the Internet, and cautioned against the fragmentation of the latter, due to increased difficulties in communication of information and collaboration mechanisms that benefit from the open nature of the Internet.

Similarly to the general debate about data localisation, Mishra mentioned that exception rulings should also rely on more empirical data. According to her, these findings are essential in measuring improvements, and determining whether they occurred in relation to stronger data localisation rules. Finally, the panellist highlighted the importance of WTO panels that do not shy away from these difficult discussions, avoiding forum shopping and creating a web of contradictory regulatory frameworks within different organisations.

 

Katharina E Höne

The panel focused on the various applications of blockchain within the context of trade and fostering sustainability. It debated current applications but was predominantly looking into both the short-and-long-term future concerning the applications and implications of the technology.

Mr David Shrier (Associate Fellow, Saïd Business School, University of Oxford; CEO, Distilled Analytics) focused on the possibilities of tracing supply chains using blockchain. He cautioned that a crucial point is the data that is fed into the blockchain application and that it will be important to ensure that the data is of high quality. He highlighted that there are five elements to describe data quality: relevancy, recency, range, robustness, and reliability. These five Rs ensure that the data going into the system when using blockchain for managing trade and supply chains is suitable and of high quality. He also pointed out that this can be made less labour-intensive by using artificial intelligence (AI) to automate the data input. In response to a question form the audience, he emphasised that the advantage of blockchain, in comparison to existing technologies, is that the information is stored in a distributed way. This means that many copies of the same data base are maintained and that the copy-holders communicate with each other when changes are made. This makes the system more fraud resistant. However, he also emphasised that blockchain is not magic; it will not solve the basic problems that are faced by every computer system, such as ‘garbage in and garbage out’.

Ms Zalfa El-Harake (Zalfa & Company) described herself as being an expert in supply chains, not in blockchain. However, she emphasised that the ability to understand when it is useful to apply blockchain to a supply chain is crucial. She used a case from the agricultural sector to illustrate the key advantages, such as traceability and sustainability, of blockchain. She emphasised that you cannot cheat or change a blockchain, unless many people can be convinced to do this at the same time. This makes the technology very useful for a number of applications. In terms of the uptake of the technology, she stressed that multinational companies need to be convinced with well thought-out proposals that clearly show the competitive advantage and a cost-benefit analysis of the application of the technology. All in all, El-Harake described blockchain as a new technical solution that can be easily implemented in the field via mobile phone access for example.

Mr Mac MacGary (Chairman Sweetbridge) described his organisation as an open source foundation that is building second layer protocols for blockchain. He explained how a couple of questions drive his current work, such as: How do we radically reduce costs throughout the supply chain (improving upon cloud and P2P)? How can we improve liquidity by freeing up capital? How do we make the trade system fairer, by using a distributed technology that alters the power balance within supply chains? He admitted that many cloud computing applications offer many of the same benefits as blockchain. However, blockchain offers additional advantages because it creates economic incentives to align behaviour across the supply chain, such as tokenising goods to ensure that a fair price is paid. Further, blockchain applications can be useful to eliminate intermediaries and share the resulting profit with consumers and producers. Similarly, bockchain might also be useful in eliminating foreign currency costs in trade transactions.

Mr Jazz Kang (Market Strategy Executive, Head of Trade Finance and Trade Logistic Solutions, Swisscom Blockchain) strongly advocated for the adoption of blockhain technologies. He emphasised that trust in the technology, which is still lacking, can be created by working through reputable organisations, such as Swisscom Blockchain. Kang went on to identify a few relevant use-cases for blockchain: supply chain management (auditing and managing changes), reducing the use of paper in cross border transactions and creating greater efficiency. He also stressed that one of the key issues lies in the adoptation of the technology, which requires bringing everyone, including competitors, to the table. In general, Kang predicts a wide uptake of blockchain technology, especially in the banking sector and that its use will become available for everyday banking customers within the next few years.

Mr Marcelo Garcia (Crypto Explorers) stressed that in business transactions, efficiency is becoming more and more relevant, especially where resources are very limited. Blockchain will be crucial with regard to trade (supply chains). He argued that the technology enables establishing a kind of automatable trust and stressed that ‘everything that can be automated, will be automated’, to for example, eliminate the need for intermediaries.

 

Cedric Amon

The session on digital trade was organised by the Confederation of Danish Industry (DI) and was moderated by Mr Peter Bay Kirkegaard (Senior Adviser, Confederation of Danish Industry (DI)). The session explored the rise of digital trade and the counter-evolution of digital protectionism, which is currently being observed by specialists. While digital trade increases productivity and provides better market access for small and medium sized enterprises (SMEs) on global markets, it also raises a range of concerns with regard to data security, privacy, and tech monopolies. In the absence of international rules to handle these issues, countries worldwide have introduced digital trade barriers hampering digitalisation and international trade. This is why governments and organisations increasingly demand multilateral rules that provide transparent and stabile regulation of digital trade.

Kirkegaard introduced the session by providing examples of businesses which are part of the DI, Denmark’s biggest confederation, which is privately owned, and showcased how data collected in one place of the world is being processed in another, in order to manufacture tailored products for their customers. He explained that certain members of the confederation voiced concerns about the evolution of the digital agenda in light of countries adopting more protective measures on data transfers and data localisation that could harm their business models. He mentioned that clients are in favour of international trade rules and that these same clients were also in favour of the EU’s General Data Protection Regulation (GDPR) because it enhanced consumer trust in their products and services.

Mr Erik Van der Marel (Senior Economist at ECIPE) and his team created an indicator for digital restrictiveness in trends, and spoke about the rising trend of digital trade policies. In general, it could be observed that information and communications technology (ICT) services have grown much faster than trade in goods and commodities. Additionally, he mentioned that many sectors are not digital but are undergoing digitalisation. The importance of data across all sectors is also reflected in a McKinsey study which shows that the contribution of data to global GDP already surpasses that of goods, and its impact will keep increasing with the rapid deployment of artificial intelligence (AI) enhanced technologies.

The indicator also identified privacy and data protection as well as data localisation policies as being most restrictive for trade. As observed by Van der Marel, data policies, especially policies regulating cross-border flows, are rising. However, the economist noted that according to their findings, countries with more restrictive data cross-border flow regulations are benefitting less from digital trade. In order to overcome these challenges, the panellist mentioned the importance of multilateral rules and the creation of an enabling environment for digital trade, particularly with regards to developing countries.

Mr Pascal Kerneis (Managing Director at ESF) acknowledged that certain countries are in need of the most basic infrastructure for companies to have a chance of prospering in digital trade. These needs range from a continuous power supply to road infrastructure, and are not only the basis for digital trade, but trade in general. To that, he added, legal frameworks and access to finances are essential.

He further stated that 'digital trade is about services' and that 'data is a service', given that trade in general could not operate without the varous data produced, starting from the ICT infrastructure required to operate transactions, to the information analysis which is based on benchmark results.

Kerneis reminded the audience of the WTO’s precursory role in 1998 when it adopted a programme on electronic commerce and said that no progress had been made since. He is therefore in favour of the joint initiative on electronic commerce that 71 sates pledged to during the Buenos Aires round of negotiations, and would allow willing countries to move forward with an agreement on e-commerce. In that context, he also encouraged negotiators to look into free trade agreements that already adopted provisions on digital trade and data flow principles, such as the agreement between the EU and Canada (CETA), the EU and Japan (EPA), and the newly negotiated USMCA. According to Kerneis, localised data would prove to be an extremely costly solution that would only increase costs for consumers and businesses alike.

Frank Matsaert (CEO, Trademark East Africa) spoke about the transformative power of digitisation for trade, which creates a robust inclusive and sustainable operating framework for trade besides the creation of innovate disruptive models of operations. It also introduces data-driven, and automation-enabled trade systems and procedures. Additionally, Matsaert mentioned the redefinition of geospatial differences and the blurring of physical borders as results of these transformative powers.

According to Matsaert, the downside of these developments is the risk of increasing the digital divide due to many sectors of the economy in developing countries being weak and informal. In these contexts, alternative technologies are often accompanied with cybersecurity risks or cannot be supported effectively due to the lack of infrastructure. He also mentioned the lack of appropriate legal frameworks as being a limit to regional cross-border trade, for example due to restrictions imposed on cross-border money transfers. He therefore identified the risk of developing countries being locked into commodities and labour sectors of trade.

He further said that in order to avoid the digital divide becoming a permanent situation, solutions must be found to incorporate informal sectors into digital trade. Herein, he identified regional and shared regional capacities as being a good way forward. Bilateral agreements, especially on money transfers across borders, could also alleviate the situation. Additionally, Matsaert explained that incorporating these sectors would also increase efficiency and help reduce corruption.

Dr Burcu Kilic (Legal and Policy Director at Public Citizen, Access to innovation, Knowledge and Information Program) pointed out that data should be analysed differently than regular commodities, given that it is created and produced by us, and often comprises sensitive information about our lives. This is particularly important as 'whoever controls our data, controls the future', in particular with the rise of automation and AI.

Kilic explained that we find ourselves in a similar situation as with the first emergence of personal computers. People understood that great changes and technological disruption was to come, but nobody was able to fully understand and foresee how this technology would affect their lives. In this context, AI might be the next big disruption that we cannot fully understand and whose effects on our everyday lives we cannot forsee.

She further noted that 'your rights do not flow with the data' and warned that cross-border flows of data do not sufficiently ensure the protection of privacy. She therefore spoke about the necessity of governments aligning to increase consumer protection and of the need for trade decision-makers to incorporate consumer protection frameworks in future agreements.

 

Marilia Maciel

The moderator of the session, Mr Rajeev Kher (Distinguished Fellow, RIS), assessed that developing countries are currently at a disadvantage in the digital economy, due to the lack of capacity and access to technology. He emphasised some of the challenges that countries face with the increasingly important role of platforms; the rising value of data; the difficulty to clearly define concepts which are relevant for competition policy and law, such as the relevant market; and pricing challenges in the context of network externalities.

Ms Rashmi Banga (Senior Economic Affairs Officer & Officer-in-Charge, Unit of Economic Cooperation and Integration among Developing Countries, UNCTAD) spoke of key findings from the ‘Trade and development report 2018: power, platforms and the free trade delusion’. According to her, trade is increasingly concentrated in the hands of big firms, which have become leaders in global value chains (GVCs). Capital share and profit are rising, but labour share is falling, even in developed countries. This will contribute to more social inequality in the future. Network effects will create ‘super platforms,’ strengthened by data that is given to them for free. If there is no competition regulation, the potential benefits for developing countries will be reaped by large platforms in reality. Competition policy has been historically introduced to protect consumers, but currently, it should protect and preserve market structures. Banga recognised that some countries do not have the capacity to economically explore their own data. Against this background, UNCTAD is proposing a ten-point progressive South-South Digital Cooperation for Industrialization: A Regional Integration Agenda. She warned that economic divides could widen in the future, if developing countries do not get access to digital capacity and infrastructure.

Ms Vahini Naidu (Foreign Economic Representative, South African Permanent Mission to the WTO in Geneva) emphasised that the digital economy and e-commerce are highly asymmetrical. The ‘winner takes most’ or ‘winner takes all’ dynamics and network effects benefit first-movers and standard-setters. She mentioned that there are voids in legislation and oversight, sharing insights from the African context. In South Africa, the impact of disruptive technologies, such as over-the-top technologies (OTT), can be felt in sectors like broadcasting, and there is a tendency of ‘replacing' or ‘displacing’ traditional industries by making them redundant, as the example of Uber shows. She opined that initiatives to regulate tech giants, put in place in the EU for example, are positive, but would be out of reach for smaller African countries. She concluded that the debate at the WTO needs to be refocused on how to promote development.

Mr Ansgar Koene (Senior Research Fellow, Horizon Digital Economy Research Institute at University of Nottingham) addressed the potential that algorithms and machine learning have to influence market behaviour. Algorithms make it hard to identify collusion, for example. Third party sellers use algorithms to set the prices they charge on Amazon.com, which can produce characteristics of undue coordination. Negotiations at the WTO, such as forbidding forced access to the source code, should not negatively hamper measures taken to enhance the transparency of algorithms as a side effect. Koene mentioned various examples of discrimination that reveal historical bias embedded in datasets. He also alerted for the dangers of ‘code reuse’ by programmers. Reuse multiplies the sneaky introduction of bugs and vulnerabilities that can span across different products.

Mr Abhijit Das (Head, Centre for WTO Studies, India) focused on anti-competition and market-distorting practices; using big discounts given by platforms; financial assistance provided by platforms to vendors; and platforms determining some strict conditions to vendors, such as the use specific packaging, as examples. Some practices could be tackled by current competition law, while others would require an update in competition law.

Das mentioned that innovators in India suffer when they refuse to sell their businesses to large tech companies. These companies usually provide start-ups with non-expensive access to data and cloud services, but withdraw their support if start-ups refuse to sell.

Questions were asked from the floor on the role of competition authorities, the ways in which the WTO could tackle digital monopolies and competition, and the possibility to consider some digital resources as ‘public commons’, which could be used by different players, even if they are competitors.

Banga opined that in a scenario of uncertainty, countries should not abide themselves by new rules; they should preserve their policy space and first try to understand the effects of platforms and the digital economy on markets.

Naidu mentioned she was not aware of work that has been done at the WTO on digital competition. Proposals tabled by member states in the context of the plurilateral discussions on e-commerce have not included competition issues.

Koene agreed that there is need for a mapping of the elements that should be considered public utilities in the digital space.

 

Gilles D. Bana

The session was moderated by Mr Derek O’Halloran (Head, Future of Digital Economy and Society, Member of the Executive Committee, World Economic Forum (WEF)), who stressed the role of digital trade as the main instrument for achieving economic development. According to O’Halloran, without solving problems of inequality in Internet access, we will not be able to benefit fully from the fourth industrial revolution. We must ensure that digital skills and infrastructures are accessible to the different regions.

Mr Jarno Limnéll (Professor of Cybersecurity, Aalto University) said that cybersecurity is a real issue for everyone, everywhere. He pointed to ‘digital security’ as the main instrument of the digital economy. He highlighted the issue of trust which he identified as the key point in cybersecurity. Limnéll stated that cybersecurity is an issue of attitude. Security must be the first point to think about when it comes to digital development. He stressed two points; strategic issues, and the leadership issue. If there is no leadership, we have a crisis. When we are talking about the future of cybersecurity, we must combine those two points. He said that we have to remember that there is no difference between physical and digital security. We have to adapt a comprehensive attitude on cybersecurity issues. Limnéll noted the importance of education and the need to train youth with the necessary digital skills.

Mr Rauk Rikk (Programme Director of National Cyber Security, e-Governance Academy) joining remotely, started by explaining the role of governments in digital services. He said that his academy consults various governments around the globe on cybersecurity issues. He explained their work on mutual recognition of electronic identities. He noted trust as the real issue of digital trade. Rikk talked about creating trust and ensuring security between different entities, and gave the examples of regulations in e-ID and trust services for electronic transactions in the digital market.

According to Rikk, we have to start with the digital identity of enterprises. It is something that we cannot avoid in digital trade. He highlighted the role of identification for good co-operation between companies in everyday activities. In addition, he said that countries usually start to think about cybersecurity after incidents occur. The problem of security is a point of management as well as a political field. He also talked about the important role of leadership in tackling cybersecurity issues. Finally, he noted the advantages of using the digital materials. For example, in Estonia, Internet voting costs less than physical voting procedures.

Ms Eneken Tikk (Lead of Strategy and Power Studies, Cyber Policy Institute) said that we are worrying about cybersecurity because we realise that economy develops faster by using digital materials. According to her, cybersecurity an instrument that benefits all countries.

Tikk explained that in the UN meetings, there are many points of view on cybersecurity. She said that a country like Estonia has a major role in helping other countries maximise the positive aspects of the digital economy.

Mr Karol Mattila (Head of Government Relations, Nokia) started by explaining the activities of Nokia, and highlighted key priorities to improve digital trade. According to him, the goal of his company is to work on achieving sustainable development goals (SDGs) by using technology. He added that international organisations and civil society must come together to tackle the issues of cybersecurity. Finally, he said that cybersecurity must always respect the rule of law and the fundemental rights of consumers and citizens.

Katharina E Höne

The moderator, Ms Burcu Kilic (Legal and Policy Director at Public Citizen, Access to Innovation, Knowledge and Information Program), opened by stressing that artificial intelligence (AI) is arriving fast, and that we need to engage with the questions it raises for policymaking, decision making, and societal consequences in general.

Mr Asgar Koene (Senior Research Fellow, Horizon Digital Economy Research Institute at University of Nottingham) talked about his work, which focuses on bias in algorithmic systems. He cautioned against the term AI, which might be misleading in its future-focus and imprecision. He argued that all decision making is biased and this is unavoidable. The important point is that the bias is justified and intended. Koene went on to outline a number of causes of algorithmic bias such as: insufficient understanding of the context; improper identification of optimisation criteria; lack of explicit justification for the chosen criteria; using justifications that are not acceptable in the given context; and, systems not performing as intended due to implementation errors and unreliable input data. He used a number of examples to highlight current issues with algorithmic decision making such as face recognition, which encountered problems due to an insufficient training data set, and algorithms used in making medical decisions, that failed to account for certain types of medical issues. He concluded by highlighting that there are no AI standards in place, but that there are current initiatives from the Institute of Electrical and Electronics Engineers (IEEE), the International Organization for Standardization (IOS), and China. Further, a number of countries have or are initiating AI strategies. However, these focus on national leadership regarding the technology, while questions of ethics, regulation, and standards remain untouched.

Mr Francisco Vera (Advocacy Officer, Privacy International) focused on digital trade in the context of privacy and consumer protection. He argued that it is important to address power imbalances that are emerging due to new technology. AI is good for analysing data and inferring data from existing data. More specifically, machine learning applications are useful for discovering patterns in data. However, the crucial point, according to Vera, is the input data. Input data and data sets are based on personal and private information. In this regard, there is a lack of meaningful consent from users and consumers. A further problem relates to the lack of high-quality data, or biases in the data sets used. Vera cautioned against blind faith in technology, and an uncritical approach to the free flow of information. He also pointed out that decisions should not be taken by machines without meaningful human involvement. The key task for the future is to recognise and address these problems in trade agreements.

Mr Felipe Sandoval (Senior Advisor, Trade Law and Negotiations, ICTSD) approached the topic from his experience as a trade negotiator and trade lawyer. He argued that trade negotiators do not approach the issue from the technological perspective, as they are not technological experts. The key concern of trade negotiators relates to questions of data. There are concerns about the protection of private data, and how to balance it with the free flow of data. Sandoval argued that these principles are not necessarily in contradiction, but it is important and possible to find a balance between them. He stressed that regional and national policymakers need to act, but existing treaties give an uneven picture, at times even a contradictory one, when it comes to the appropriate treatment of private data. Sandoval pointed out examples, the US-Mexico-Canada Agreement (USMCA), China, and the EU who all take substantially different approaches. This causes issues for the relations between these and other countries that are part of different treaties. There needs to be a dedicated process to look at privacy, consumer protection, and the value of free flow of data. Stronger frameworks on the issue of consumer data need to be integrated in trade agreements.

Mr Rodrigo Polanco (Senior Researcher and Lecturer, University of Luzern) pointed out that e-commerce and digital trade provisions in preferential trade agreements (PTAs) are not a new phenomenon, and that the number of PTAs with such provisions is growing substantially. They are mostly found in bilateral treaties and not all of them are binding. There are few general provisions on data flows. Further, Polanco compared the USMCA and the Korea-Central America Free Trade Agreement with regard to their provisions on e-commerce, digital trade, and data flows. He highlighted that USMCA has provisions on open government data, which is a new element for this type of treaty.

In the discussion, panellists stressed that the solutions to political questions cannot be produced by technological approaches. Political debate and decision making, including in trade agreements, need to take place to address privacy and consumer protection in the context of algorithmic decision making.

 

Katharina E Höne

The moderator, Mr Eloi Laourou (Ambassador, Permanent Mission of Bénin in Geneva), started the session by stressed that a lot needs to be done to support small and medium sized enterprises (SMEs) in least developed countries (LDCs), and that the benefits of supporting local communities and countries are substantial.

Ms Elodie Akotossode (FounderEd Tech Women and Ed Tech Academy) described her personal story of advancing her knowledge regarding new technology. However, she also noticed a lack of women in the field, and decided to establish an organisation to address this gap. The trainings offered have a local focus, are geared towards small vendors, aiming to enable them to make the most of their online presence. Trainings include web design, building online shops, product presentation, and logo design, among other topics. Akotossode stressed the need for personalised training, starting by identifying the needs on the ground in order to tailor the training as much as possible; she emphasised the importance of empowering women to make the full use of technology in order to avoid being left behind.

Mr Denis Deschamps (General-Director, Conférence permanente des chambres consulaires africaines et francophones (CPCCAF)) began by describing the work of the organisation. The standing conference aims to be a space for sharing experiences and information among member countries. The CPCCAF provides support for economic development and the business sector in member countries. It aims to foster partnerships among African countries and beyond. Deschamps explained that the CPCCAF also works with SMEs, in particular related to topics in communication and information technology (ICT). He stressed that Africa has the potential to leap forward using new technologies, such as drones and geo-tracking, and emphasised that the first goal behind these efforts has to be to feed people and contribute to their subsistence. The key, according to Deschamps, is to provide adequate content that meets the needs of people, and information that enables entrepreneurship, since there is no development without information.

Mr Carlos Foradori (Ambassador, Permanent Mission of Argentina in Geneva) highlighted that there are challenges as well as opportunities when it comes to technology and SMEs in LDCs. Challenges include the fact that LDCs have low Internet penetration rates, lack of communications infrastructure, high administrative costs for businesses (that want to take advantage of global markets), and lack relevant skills. However, he stressed that e-commerce and new ICTs also generate new opportunities. He mentioned the Global Trade Help Desk, and the Foreign Trade Information Centre as examples that try to empower SMEs in developing countries, allowing them to take advantage of e-commerce opportunities and global markets.

Ms Arancha González (Executive Director, Centre du Commerce International (ITC/CCI)) argued that it is time that LDCs move from being consumers to becoming producers of technology, technology needs to be a lever of development. González argued that technological innovation and digital progress is not only for the Global North, the Global South also has best practices that illustrate the incredible speed of transformation taking place. Institutions that focus on trade and investment promotion have an important role to play to transform big data to knowledge, and provide user-friendly intelligence based on big data, ‘big data for small businesses’. González stressed that it is crucial to zoom in on the ecosystem required for people in the Global South to participate meaningfully in e-commerce and make the most use of available technology. She argued that it is important to investigate difficulties faced by enterprises, to become more effective globally. Ultimately, the key, according to González, is to connect SMEs to digital markets.

 

Katharina E Höne

Chaired by Mr Marcos Troyjo (Director, BRICLab Columbia University), the panel discussed options to better equip trade negotiators to represent their countries’ interests and level the global playing field at various trade negotiation tables. It explored opportunities for trade curators to interact with technology leaders for the development of trade-related artificial intelligence (AI tools). In particular, the panel discussed the Cognitive Trade Advisor (CTA), a new tool in the area of AI-powered tools for (trade) negotiations that comes out of the work of the Intelligent Tech & Trade Initiative (ITT).

Mr Daniel Feffer (Chairman, ICC Brazil) emphasised that developing countries still face inequalities at trade negotiation tables. Since increased trade means increased prosperity, it is crucial that these countries step-up their efforts and that other countries intensify their efforts to support them. Feffer argued that if we are observing the advances in AI, and in particular the contributions that IBM Watson, an AI platform, was able to make in the field of medicine, we also need to wonder how AI can support the work of negotiators, especially in the field of trade. Feffer described how the CTA was developed as a prototype. IBM Watson was taught to ‘read’ trade agreements and to be able to answer queries from trade negotiators. The intention is that trade negotiators can save time on research and spend more time on building the agreements. With this kind of augmented intelligence, Feffer argued, better trade deals and win-win solutions have become more achievable.

Mr Bonapas Onguglo (Head of Trade, Analysis Branch, UNCTAD) argued that it is important to encourage the UN to use new technologies. He pointed out that trade and technology are a catalyst for the sustainable development goals (SDGs) and that AI needs to be explored in this context in particular, as far as it allows developing countries to benefit. Countries need a permanent supporting mechanism for trade negotiations in order to level the playing field when financial and human capacities are insufficient. Trade negotiators in particular face the challenge of having to be aware of a vast amount of technical details within complex agreements that can often span more than a thousand pages. Similarly, the institutional memory of past negotiations needs to be preserved in cases where negotiators often change. AI can be a factor in addressing these challenges.

Ms Ana Lizano (Counsellor, Permanent Mission of Costa Rica to the WTO) brought her perspective as a negotiator to the table. In terms of trade negotiations, she observed a fast evolution and continuous disruptions by technologies such as blockchain and AI. She argued that new technology can play a big role in finding better trade agreements, automating ports and borders, reducing shipping costs, and increasing bilateral trade. In terms of negotiation support, AI-powered tools, she argued, can present suggestions and scenarios to enable humans to make better decisions. She also raised potential points for consideration, such as preserving the knowledge of experienced negotiators, engaging in meaningful public private partnerships, and designing new tools collaboratively and making them available to the wider WTO-membership.

Ms Julia Seiermann (Associate Economic Affairs Officer, UNCTAD) emphasised the need for levelling the playing field between developed and developing countries, and to work towards greater equality. Technology can help with this, but there is also the danger of exacerbating existing inequalities. There is a need to address the lack of resources, especially on the side of small and developing countries. The CTA could save resources and enable a more productive use of existing ones for trade negotiators and countries. The key, according to Seiermann, will be to make the technology and the data available to everyone and to tackle areas where data is lacking. Lastly, Seiermann emphasised that it will be up to humans, not machines, to decide which outcomes – such as trade, economy, or tackling inequalities – should be the main focus.

Mr Gabriel Petrus (Executive Director, ICC Brazil) argued that technology can build trust in the multilateral system of trade negotiations by addressing the lack of transparency (through public and open source tools). It can help in the reform of the WTO and enable a new kind of trade negotiation. The CTA is a tool that uses advances in AI to increase the productivity of trade negotiators. Petrus pointed out that the tool is useful in helping negotiators prepare better, building better strategies, and saving time in preparation and research for the negotiations. At the moment, the CTA focuses on so-called 'rules of origins' in the trade treaties, but there are plans to extend the tools to other areas with high relevance for trade negotiations. Petrus also stressed that the tool is ultimately always shaped by human intelligence.

Additional comments provided by Ms Lucia Maduro focused on the need for modernising the rules of origin within MERCUSOR. She argued that the CTA can be a useful tool in tackling the challenge of complexity and to ultimately develop a new model for rules of origin in trade treaties. Ms Sandra Rios pointed out that the benefits of the tool need to be clear, as well as the ambitions with regard to the scope of the tool. She emphasised that the tool itself does not provide results, but that it can help in levelling the playing field. Mr Nikolaus Schultze stressed that the CTA can be a big help for developing countries with smaller negotiation teams.

Questions raised during Q&A included: Who controls the data and who owns the data? Is the source code publicly available? Given that there is a fundamental problem with trust in algorithmic decision-making, does this make the tool potentially untrustworthy or unreliable?

 

Stefania Pia Grottola

The workshop was organised by the Permanent Mission of the Islamic Republic of Afghanistan to the WTO, and the Economic Research and Statistics Division of the WTO. It addressed the post-2009 financial crisis that left developing countries with persistent and large trade finance gaps, and aimed to discuss the eventuality of new technologies such as e-payments, blockchain, fintech, and helping bridging the gaps.

Moderated by Mr Marc Auboin (Counsellor, Economic Research, WTO and Secretary, WTO Working Group on Trade, Debt and Finance), the session was introduced by Mr Mohammad Q. Haqjo (Ambassador and Permanent Representative of the I.R. Of Afghanistan to the WTO, Chairman of the WTO Working Group on Trade, Debt and Finance). He structured his speech around two key areas: the reasons behind the discussions on trade and finance in the WTO; and the role and mandate of the Working Group on Trade, Finance and Debt. First, he explained the reasons behind the trade, finance and debt discussions at the WTO. There is a deep interlink between trade and finance; 8% of today’s global trade has been financed through financial institutions. At present, everything is divided and institutionalised to facilitate trade, including for those struggling in accessing finance. Second, he talked about the Working Group on Trade, Finance and Debt which was established at the ministerial meeting in Doha, with the aim of studying how trade can best contribute to solving the problems of debt and finance. The group is currently focusing on ways to address the financial gap in developing countries, due to the following problematic variables: 60% of rejections in accessing finance are to small and medium sized enterprises (SMEs), moreover, banks have decreased their presence worldwide, creating a financial service gap, while regulations have become stricter, decreasing bank-to-bank transactions and relations. As a result, less money has been exchanged. The market is only for local banks, however, local banks in developing countries are lacking in human and institutional capacity. With this regard, he explained how a dialogue platform with private banks has helped in providingé loans for developing countries, and to the efforts put in place by the WTO in training professionals in 85 countries worldwide. Finally, he stated that the knowledge gap and digital divide are still the main obstacles in front of the implementation of technology for trade finance.

The second panellist, Mr Jean-François Lambert (Chief Executive Officer, LambertCommodities Inc.), talked about challenges small businesses in developing countries face. He shared his concerns regarding the capacity gap of local banks in providing access to finance. He argued that the trade gap persists as well, since currently the main lending activities are made to the same big companies, stating that 'banks have forgotten big parts of the world'. Moreover, he continued by saying that large banks do not want to take the risks and responsibilities that come with supporting local banks, and that political instability present in certain developing countries could also be a factor. Concluding his speech, he expressed his view saying that the current obstacles and challenges are not only represented in the financial gap, but also by a cultural gap.

The third panellist Ms Michelle Chivunga Nsanzumuco (Regional Advisor, British Blockchain Association; Executive Education Manager, University of Surrey Business School), addressed the topic of bridging the financial gap with new technologies, especially blockchain. The opportunities that blockchain creates are strictly related to the concept of creating value. She argued that blockchain is an enabling technology for everyone: it allows people to create their own value, such as M-Pesa did in Kenya; opening the market to local people; providing identity to people, and SMEs with digital identities, allowing them access to the market. Finally, she stated that despite the fact that blockchain is in its initial stages, there are significant uses already in place, and the way business is done will be increasingly affected by such technology.

The fourth panellist, Mr Vinay Mandonca (Global Head of Products, HSBC Trade and Receivable Finance), expressed the need for a paradigm shift in the way credit is assessed. The digitalisation of transactions through blockchain has positive effects on credits assessment, as 'visibility is a proven point'. He argued that it comes down to the concept of transparency of flows. Consequently, a question could be raised: Who is going to share the information, and with whom? In this context, blockchain represents a good opportunity because it does not require a database, and utilises decentralisation and democratisation for all processes. It creates the possibility of having a network of networks. Singapore’s new National Trade Platform is already using blockchain and benefiting from it.

The final panellist, Ms Emmanuelle Ganne (Counsellor, Economic Research, WTO), briefly commented on the points raised during the discussion. She argued that blockchain can be extremely helpful in building trust between actors, and providing more accurate traceability. However, traditional trade finance has not yet completely moved to the application of such technologies. With this regard, Ganne stressed two main points. First, blockchain technology guarantees the information that has been uploaded, but it does not guarantee the authenticity of such information. Second, is the question of interoperability; there are various blockchain technologies that are not interoperable with each other. Blockchain works best when the information is shaped through the same model.

After this overview of blockchain technology, she addressed the topic of new technologies enabling traders to move to a peer-to-peer model, without engaging with a bank. She argued that there are already fintech that leverage technology, and help SMEs to build their trade history; however, despite the new opportunities that technology creates, we are still trying them with the aim of benefitting from the intrinsic characteristics of such technologies.

 

Gilles D. Bana

The session was moderated by Mr Alexandre Daniltsev (Head, Trade policy institute (TPI) of Higher School of Economics (HSE)), who started by briefly highlighting the historic journey of international trade between countries. According to Daniltsev, digital trade is a great instrument for regulating trade in services, market access, and co-operation. He stressed that we have access to the digital economy in our homes. He also mentioned the General Agreement on Tariffs and Tariffs (GATT) as a big achievement which took ten years to negotiate. Daniltsev asked how many years of negotiating do we need on digital trade issues? According to him, there is the obstacle of protectionism and the risk of technological development. He gave the example of the trade facilitation agreement (TFA) as a model for fulfilling the obligations of digital trade. He reinforced the role of digital materials. He then went on to ask the two panellists to talk about developping rules for the future economy and the regulation of access to digital trade.

Mr Phil Rourke (Executive Director, Centre for Trade Policy and Law (CTPL), Carleton University/University of Ottawa) started his presentation by explaining the main challenges to digital trade: to promote free Internet, data flow, consumer protection, encryption, cybersecurity, market access, stakeholder engagement, etc.

Rourke said that governments want to know how to tax online transactions, which could cause barriers to digital trade. He gave the example of 3D printing as being important for the future of digital trade. He said that data is essential to 3D printing, and that the impact of 3D printing on economic development is great and affects: business models, employment, increase in competition between the data’s owners, etc. He asked what the chapters on digital trade in the regional trade agreements (RTAs) are? For example, is the United States-Mexico-Canada agreement (USMCA) going to improve to the economy of these countries in digital trade? In addition, he noted the challenge of domestic reforms.

Ms Rosemina Nathoo (Senior Trade Law Advisor, CTPL, Carleton University/University of Ottawa) started by thanking the moderator for the invitation. She highlighted the role of the CTPL in the practical experiences of digital economy. She gave the example of African countries and the Canadian Policy Agenda for the Digital Economy, and the steps they took to tackle the obstacles that came up.

According to her, a key priority is inclusive trade and growth. She mentioned the WTO Director-General support of a comprehensive and inclusive trade agenda in order to improve digital trade.

In addition, Nathoo said that African countries must change the way they are doing trade. Different countries are in different positions to take advantage of digital trade’s opportunities. According to her, migration and the question of identity could be solved by a digital identity. She mentioned that Indian citizens are digitally indetified. She said that nothing is moving forward on the multilateral level and mentioned the importance of enforcing digital trade rules, and the complementarity between the regional and international trading systems. Nathoo remarked that policymakers have to catch-up to technological development. She said that the new rules have to take the positive aspects of the old rules for the progress of the digital economy.

Finally, according to her, digital trade will have an impact on domestic, regional, and international levels. She reinforced the role of digital skills, data flow, and data protection in order to make socio-economic progress.

Mr Bekzada Abilkassymov, joining remotely, started by explaining how the digital economy helps the civil services in his country, Kazakhstan. He said that digital trade has grown in the last five years.

In addition, he mentioned various cybersecurity problems in Kazakhstan, for example, with the digital signature, online payments, etc. He stressed the problem of Internet access in the developing countries. He stressed that there should be a kind of ‘justice’ in the digital trade.

Cedric Amon

The session was organised by the International Trade Union Confederation (ITUC) and the Trade Union Advisory Committee to the OECD (TUAC), and focused on issues and opportunities for workers and union members in light of digitalisation.

The moderator, Mr Georgios Altintzis (Policy Officer, International Trade Union Confederation (ITUC)), opened the session by sharing the news of Amazon’s recent decision to grant their warehouse workers in the US, a minimum hourly wage of USD$15. This decision came after persistent pressure from both the unions and the public. However, the company decided not to extend these salaries to delivery workers.

Altintzis further introduced the idea that greed will be an issue to be addressed in e-commerce. From a union’s perspective, he called for 'making unionisation sexy again', and for more governmental involvement in issues created by digital developments. The moderator urged governments to keep e-commerce out of trade agreements, at least for the time being.

Other issues identified by Altintzis included, the market power concentration being a threat to economic freedom; the creation of financial bubbles; the impact of social networks on humans; and the effects of digitalisation on democracy.

Ms Anna Byhovskaya (Policy Officer, Trade Union Advisory Committee (TUAC) to the OECD) said that there are three layers of data which need to be kept in mind:

  • How is data collected (i.e. through online communication, sensors, etc.)?
  • How is data processed?
  • How is data repurposed?

She further spoke about the fragmentation of value chains due to digital enhancements, and identified the trackability of services as a great improvement, but also a threat to workers’ rights. Workers are now constantly exposed to their performance being tracked and analysed. Use of data can become relevant for human resource processes, since this information can be used as grounds for hiring or firing an employee. The challenge posed by this development is that workers currently have very limited capacities to defend themselves against these practices, as they have no clearly defined rights of accessing this data.

With regards to global value chains, Byhovskaya spoke about the opportunities that blockchain technology brings, and the improvement in transparency it could bring to value chains around the globe.

Given the short-lived and rapidly changing nature of digital developments, the speaker highlighted the importance of being able to create ex ante regulations; citing expert views which criticise the EU general data protection regulation (GDPR) for already being outdated on certain points just shortly after having been adopted. Another regulatory measure that Byhovskaya identified was the enforcement of transparency standards under which companies have to disclose the use and purpose of collected data.

Mr Victor Figueroa (International Transport Workers’ Federation) mentioned the use of sensors and other information for enhanced trackability, and spoke about their extensive application in the transport and logistics sectors. These massive amounts of information can be used to discipline workers; benchmark workers against each other; and lead to a new form of efficiency maximisation technique, also referred to as 'digital Taylorism'.

However, Figueroa stated that labour itself is no longer a simple productive task, as it creates data. This information emitted by employees’ work must be compensated, especially in a context where data is used to analyse which processes to automate. He further explained that artificial intelligence (AI) will also have a great impact on the workforce, creating new kinds of problems, such as the question of how to interrogate a machine-based decision.

The moderator led the discussion towards the lack of worker protection within the business models of online platforms - such as UBER or Airbnb - which put consumers in direct contact with the service provider. Besides the risks, such as the absence of social security plans, tax deficits or training deficits, Byhovskaya identified the lack of portability of data of self-employed workers from one platform to another as a further problem. Figueroa explained that this phenomenon is due to platforms by big companies attracting customers with free services, but making it difficult to leave for another service. He stated that there is a 'supercharged tendency towards monopoly in the field of digital'. This dynamic is also applicable to service providers, given that an UBER driver for example, might not be able to transfer his ratings and recommendations to another operator.

The panellists agreed that these barriers are issues that need to be addressed by governments in order to force companies to take responsibility for their workers, be it through stronger competition laws, the application of national jurisdiction and taxation to services delivered in a country, or - in countries where it is not already the case - by giving self-employed workers the right to unionise.

Figueroa mentioned that in the UK, they are considering models for the greater democratisation of data. Ideas range from the creation of a digital Commonwealth - under which a databank would be made accessible to public institutions and startups for a cost - to the creation of a network similar to the BBC which would have an oversight mechanism; and various types of social media platforms being regulated by an ethical charter.

 

Gilles D. Bana

The session was moderated by Ms Nadira Bayat (Programme Director, Global Economic Governace (GEG) Africa), who started by stating that digital trade is growing very fast, expanding businesses, and empowering women. However, this growth has a lower impact for women, as they are not fully benefiting from the Internet. She stated the need to examine the approach of the African Continental Free Trade Area (AfCTA) in balancing human rights values and digital trade. Bayat underlined that human rights principles are very important in addressing issues related to information and communication technologies (ICTs), and the access to ICTs by women and youth.

Ms Peggy Hicks (Director, Thematic Engagement, Special Procedures and Right to Development Division, Office of the High Commissioner for Human Rights (OHCHR)) started her presentation by asking: What is the link between human rights and digital trade? She explained that the relationship between technology and trade is essential for the development of countries. There are many opportunities in digital trade, however, one of the big tensions is the lack of regulation in digital trade. According to Hicks, governments are not fully prepared to take on the new challenges of digital trade, while allowing small and medium-sized enterprises (SMEs) to do global business. She said that Africa needs to look at the models of best practices of developed countries, and to try to do better in moving towards effective regulation of digital trade. Hicks said that as a society, we need to invest in technology, and that 25% of African countries are working on increasing Internet access to tackle the digital divide. She emphasised the importance of technological investments, and access to jobs through digital materials. In addition, she gave the example of mobile payment system M-pesa in Kenya, that empowers women to do business.

Mr David Luke (Director and Coordinator of the African Trade Policy Centre at the Economic Commission for Africa) highlighted the work of the African group in the World Trade Organization (WTO). He said that the African Union (AU) is cautious about the work done in the e-commerce programme.

He talked about the conference on digital economy, organised in July 2018, in Nairobi, Kenya. He gave national examples on supporting digital trade in countries such as the Ivory Coast, Senegal, Rwanda, and South Africa. These countries are developing competitiveness of technical skills in digital trade. He pointed to Rwanda as a good example in helping and engaging youth in hub technology in order to tackle the digital divide.

Luke also said that there is no consensus on e-commerce policy issues between the member states of the AU. He pointed to the role of AfCTA, signed last March in Kigali, Rwanda, to help the continent deal with digital trade issues. He said that the agreement will cover goods, services, payment issues, and more. According to Luke, the gender divide needs to be examined carefully in order to develop ICT competences of women. He mentioned the lack of data regarding trade-related issues that women in business face.

Ms Ololade Shyllon (Human rights lawyer, and Head of Democracy, Transparency and Digital Rights Unit at the Centre for Human Rights, University of Pretoria, South Africa) clarified the legal issues related to digital trade. She talked about hard laws and soft laws, and explained that African countries adopted an agreement on data protection in 2014. However, according to her, many of the countries are not ready to ratify the agreement due to challenges in privacy, data protection, and data localisation, among others.

Shyllon highlighted the Protocol to the African Charter on Human and People’s Rights on the Rights of Women in Africa (Maputo Protocol). She mentioned that digital trade brings many opportunities, but that we also need to pay attention to the lack of digital skills in Africa. According to her, African countries are faced with challenges related to digital literacy, and language barriers while using the Internet.

The moderator concluded the session with remarks on the huge role of human rights in empowering women in the digital trade. She said that technology and human rights are not separate topics.

 

Katharina E Höne

The four panellists focused on the opportunities as well as challenges brought about by e-commerce for micro, small and medium sized enterprises (MSMEs), and set out to explore ‘digital de-colonisation for social benefit and successful global cross-border trade’.

Mr Andrew Ure (Head of Trade and Economic Affairs, Google Asia-Pacific) focused on the digital innovations that drive MSMEs, and argued that it is now easier to reach global markets. He mentioned that various digital innovations allow for easily available current market information, making it easier for MSMEs to find and integrate this information into their supply chains. Increases in computational power, combined with the low costs of cloud computing, further support these businesses. Platforms are crucial to reach customers around the world, and there is a symbiotic relationship between these platforms and MSMEs.

Ms Rupa Ganguli (Founder & CEO, inclusivetrade.com) pointed out that MSMEs often lack the resources necessary to access global markets, in particular the right information, routes of access, and tools that are tailored to their size and specific needs. She emphasised that collaboration is key. For instance, working through one platform can save MSMEs important resources, while increasing trust of global customers. In principle, digital tools allow for shops to stay open 24/7, and reach customers worldwide. However, many barriers for MSMEs still exist, such as a lack of customised banking solutions. Many regulations and tools for business are still geared towards big business, especially when access to global markets is concerned. There is also a prevailing assumption that businesses grow locally and only go global after they have reached a certain size. However, this is no longer true and new solutions for MSMEs are needed.

Mr Jake Colvin (Executive Director, NFTC's Global Innovation Forum) pointed out that there is a fundamental change taking place with regard to who benefits from global trade. MSMEs have started to benefit, and make important contributions by creating jobs locally through doing business globally. They increasingly use Internet-enabled technologies to run their businesses efficiently. Colvin highlighted the importance of connecting globally minded entrepreneurs with policymakers. Some key questions were: How do governments get to hear about this new perspective that emerges from MSMEs empowered by digital tools? How can they support MSMEs by fostering the right policy landscape?

Ms Kimberley Botwright (Community Lead, Trade and Investment, World Economic Forum) began by pointing out that the future of trade lies in e-commerce. However, trading costs for small businesses that wish to become global players are still substantial. She highlighted five key pillars to enable e-commerce: logistics, payment, digital customs, regulatory coherence, and e-transaction rules. She also emphasised the need for increased collaboration in regulatory landscapes, technical assistance, and public-private partnerships. Botwright identified these as systemic problems, and noted the importance of scaling up support for MSMEs, in order to achieve systemic effects. One way of doing this is by learning from how other systemic challenges have been tackled.

The moderator, Ms Lucy Hockings (host and presenter, BBC), highlighted that collaboration and connectivity stand out as key elements in creating better solutions for MSMEs and within this context, the panellists pointed to further challenges and solutions. Rupa mentioned that MSMEs need to be able to sell single products, rather than being forced to wholesale on global markets, and that digital solutions play a key role in this. Colvin emphasised how platforms can be used to create visibility and trust in MSMEs. Botwright pointed out that one of the challenges is understanding various problems faced by MSMEs when the issue is sometimes so complex that entrepreneurs have been prevented from exploring global markets in the first place. Ure mentioned challenges in affordability, and Rupa highlighted additional costs related to unconnected banking solutions, and inappropriate regulatory frameworks.

Questions from participants also pointed to issues of regulatory coherence. Challenges regarding a demand for free data flows in the context of developing countries who are just emerging in e-commerce were also highlighted. One commentator suggested to look at cases in which existing solutions for physical issues related to trade can also be applied to digital space.

 

Gilles D. Bana

The aim of this session was to discuss how digital trade rules can help African countries to benefit from e-commerce.The moderator of the session, Mr Alastair Tempest (CEO, Ecommerce Forum Africa), started by mentioning that the transformation of the digital economy is happening, but that trust is a big issue when it comes to e-commerce in African countries. He highlighted the role of mobile connections in developing e-commerce. Tempest stressed that we must transform our economy but that we can not jump on a ‘moving bus’ of digital economy. He noted that Africa has initiated the African Continental Free Trade Area (AfCTA). He encouraged doing business to business (B2B), business to consumer (B2C), and further facilitating entrepreneurship.

Mr Ibrahima Nour Diagne (Administrateur Général, GAINDE 2000; Co-Founder, The African Perfomance Institute) started by explaining that e-commerce in Africa needs the necessary technological infrastructures. He noted that legal issues are still obstacles in facilitating e-commerce development. According to him, African countries need to add value on products. In addition, he highlighted the importance of data and data localisation issues in understanding consumer behaviour. He pointed to the lack of digital skills on the continent; adding that if things continue the way they are, Africa will be marginalised in global digital trade.

According to Diagne, Africa needs to take advantage of the opportunities that e-commerce brings for creating jobs. He said that it is time for governments to exploit the positive impact of the digital economy. Diagne said that business is moving ahead, but asked how e-commerce can be used to help small and medium-sized enterprises (SMEs) in Africa? According to him, Africa needs to come together and be more engaged in e-commerce discussions.

Ms Lydia Makau (Country Manager, Safe.Shop, Kenya) emphasised the fact that e-commerce is perceived as an issue pertaining only to big companies in Kenya. She said that there are still gender barriers which prevent women from maximising the advantages of e-commerce. She talked about the role of the online platforms in reducing the unemployment levels in Africa, and explained that buying online can reduce costs for consumers. According to Makau, access to computers is a big issue in rural regions. In Kenya, they are developing the trust of consumers through the Safe.Shop initiative, and said that small businesses need that trust.

Mr Kwame Acheampong (Head of Africa, Mall For Africa) noted that e-commerce is a huge opportunity for young people in Africa, adding that e-commerce can become a threat if the digital divide is not bridged. According to Acheampong, governments need to examine the payment, logistics, and delivery issues.

He talked about the issue of trust in doing business on African platforms, saying that we should encourage local businesses to become a part of e-commerce, saying that we need to tackle the taxation issue and that the public sector needs to focus on the infrastructure of e-commerce.

Finally, the moderator closed the session by thanking the participants and saying that input from African governments are needed.

 

Gilles D. Bana

The moderator of the session, Mr Pascal Kerneis (Managing Director, ESF), highlighted the issue of the rules of the e-commerce multilateral initiative. He stated the need for a commitment from the member states of the WTO, and flexibility on e-commerce debates.

Mr Alvaro Cedeno Molinari (Ambassador and Permanent Representative of Costa Rica to the WTO) noted the historic journey of e-commerce, starting with the WTO's Work Programme on E-commerce that was launched in 1998, and the impact the Nairobi Ministerial conference (MC11) had on e-commerce initiatives in 2015. He also higlighted the goals of the e-commerce multilateral initiative, which are skills and capacity development in ICTs and e-commerce.

Molinari emphasised the fact that small and medium-sized enterprises (SMEs) have major challenges, and said that e-commerce is going beyond the electronic transaction services. He mentioned that although the same language is being spoken during discussions on e-commerce, the true problem lies in the lack of implementation of the decisions taken. According to Molinari, developing countries do not need to go though the same long journey taken by developed countries. He concluded by mentioning that facilitators of trade were technological materials, such as software and artificial intelligence (AI).

Ms Xiaolin Chai (Director of Trade in Services Division, WTO) started by explaining the role of telecommunications in making e-commerce development possible. She said that during the first years of e-commerce debates, technological issues were present. However, now the challenge for governments lies in tackling e-commerce policies. She pointed that during MC11, they discussed e-commerce, but there is still a difference in implementation levels.

According to Chai, MC12 would be the occassion to tackle the problem of momentum on e-commerce, stating that transparency is good for e-commerce debates between member states. E-commerce can be developed with commitment on infrastructure, and financial services. She concluded by emphasising the important role of e-commerce in the economic development of both developing and developed countries. Generally, there is flexibility for developing countries to allow implementation of the Trade Facilitation Agreement (TFA).

Mr Hosuk Lee-Makiya (Director, The European Centre for International Political Economy (ECIPE)) said that there are many reasons to discuss e-commerce issues in multilateral meetings. According to Makiya, e-commerce is already multilateral; whether it is data protection, digital channels, payment for services, or other topics. He added that we need to recognise the impact of the US-Mexico-Canada agreement (USMCA), in affecting the future of e-commerce debates.

He mentioned areas that needed focus, such as data usage and localisation and connectivity, as well as specific digital taxation to digital trade. Makiya said that digitalisation needs to be viewed beyond e-commerce, emphasising that we can not resist the digitalisation of the economy. He noted that it is helping SMEs grow their businesses, and concluded by stating that AI is not a concept, but a real digital material that can transform the global economy.

Mr Adriaan Scheiris (EU Public Affairs Manager, UPS) started by explaining the SME trends in e-commerce, noting that there is a rise in businesses every year because of lower transaction costs, higher Internet penetration rates, and the impact of the WTO TFA.

He posed the question of how to enable and support e-commerce globally and concluded that data flows, privacy, simplified documentations, but most importantly, trust, were the crucial answers.

 

Gilles D. Bana

The moderator, Mr Roberto Azevêdo (Director-General, WTO), welcomed the panellists and talked about how the lack of Internet access is a barrier to trade in many regions, especially in developing countries. He stressed the need for engaging in the debate and the importance of inclusiveness for the digital revolution. He also emphasised that the group of 71 member states of the WTO submitted proposals aimed at advancing exploratory e-commerce work.

Azevêdo also noted that the business community has a big role to play in addressing e-commerce and data flow issues. He said that there is still a gap between the developing and developed countries. He thanked the World Economic Forum (WEF) and asked their president to speak on cross-border e-commerce.

Mr Børge Brende (President, WEF) noted that this initiative is not the solution, but that it gives e-commerce the opportunity to evolve. According to him, there is inequality in debates and engagement in e-commerce, however efforts are being made to overcome this. Brende highlighted the role of the Centre for the Fourth Industrial Revolution, and said that they support public-private sector collaboration on e-commerce development priorities. He emphasised that we need to shape the fourth industrial revolution to benefit everyone and meet the objectives of the sustainable development goals (SDGs).

Mr Jack Ma (Executive Chairman, Alibaba Group) representing the Electronic World Trade Platform(eWTP) started his speech by thanking Azevêdo for the opportunity to participate in this event. He mentioned that in the last two decades in China, e-commerce was crucial in developing the country's economy. Ma stated that globalisation and digital technologies have contributed to e-commerce, to the point that small businesses can now reach global consumers. E-commerce will be beneficial to 80% of the developing countries in 2030 and beyond.

We need to reform to create a more business-friendly future, and e-commerce needs WTO member states to decrease regulation to make global business thrive. According to him, inclusiveness gives small and medium-sized enterprises (SMEs) more opportunities to conduct effective business. The future rules should be driven by the business and private sectors. Finally, Ma noted that in order to make sure that e-commerce is developing, we need to build logistics, digital payments, and other aspects of infrastructure.

Mr Mukhisa Kituyi (Secretary-General, United Nations Conference on Trade and Development (UNCTAD)) noted that we need to advocate for digital trade and investment, and against the digital divide. He mentioned initiatives for entrepreneurial young people and their role in the digital economy. Kituyi also noted the positive impact of mobile money for consumers in Kenya. He said that leadership is very important to highlight the importance of e-commerce for developing countries. Connectivity without digital skills is a waste of opportunity.

Ms Frances Lisson (Ambassador and Permanent Representative of Australia to the WTO) said that they are developing national policies in order to make sure e-commerce is moving forward. She noted that the digital divide is still a reality in the Pacific region. She also noted that the WTO has a central role in helping tackle the challenges in e-commerce in developing countries.

Mr Robert Dufter Salama (Ambassador and Permanent Representative of Malawi to the WTO) said that the least developed countries (LDCs) face many challenges in e-commerce. According to Salama, there is a need to create jobs for young Africans, and this can be done by bridging the digital divide. In developing countries, the lack of power and electricity, which is a barrier to Internet access; a big gap in digital skills; and inadequate exchange of currency, are major roadblocks in front of e-commerce.

As an example, Salama pointed to the postal system in Malawi which is not well organised, and to the need for a master plan for Africa to tackle e-commerce issues. He concluded by stating that LDCs need to put in place information and communication technologies (ICT) capabilities to take better advange of e-commerce opportunities.

Marilia Maciel

The moderator, Mr Andreas Klasen (Head of Institute for Trade and Innovation (IfTI), Offenburg University), started the session by reading a statement on behalf of the director of the International Islamic Trade Finance Corporation (ITFC), highlighting the important role that trade plays in economic growth and development, and explaining the mission of the ITFC. He emphasised that the use of technology in global value chains (GVCs) is able to support agriculture, by facilitating transportation and traceability; reducing information and coordination constraints; and reducing the cost of trade.

Klasen asked Mr Torbjörn Fredriksson (Chief, ICT Policy Section, United Nations Conference for Trade and Development (UNCTAD)) to comment on the impact of digitisation on GVCs. Fredriksson started by highlighting the importance of the agriculture sector in many developing countries. According to him, there are three types of digitisation:

  • Thin integration, which is the use of digital technology facilitation for better coordination of the GVCs. However, it does not deeply transform the activity (e.g. use of e-mail, mobile, spreadsheets by actors).
  • Platform-based integration applied to price dissemination. In this case, ICTs support the dissemination of information in agricultural exchanges. They tend to be more successful when they offer additional access to a broader range of services, and capacity building assistance.
  • Full digital integration, which means creating data-driven value chains. It enables easy tracking of payment and risk of frauds, among other benefits. However, there is need for more research on the effects of these practices on inclusion. Trade unions, co-operatives, and other actors may be displaced in a scenario of full digital integration. Capacity building, training and technical assistance are necessary to avoid exclusion.

Mr Daniel Annerose (CEO, Manobi), stressed the need for not only market data collection, but the know-how to utilise data solutions to increase value in agriculture GVCs. In a chain, it is important that every player is known. There is scant data on farmers, how they produce, and their challenges for example. Data needs to be appropriated and used in a way that can specifically help the agriculture sector in least developed countries (LDCs).

An ITFC representative from the audience explained the mission of the organisation, which is to provide instruments to finance trade. Finance of agriculture represents 12% of the portfolio of the bank. However, some years ago, the ITFC mutated into a trade solution institution, that promotes trade development activities. Topics of interest to the ITFC's  include: ways to improve agriculture and increase the volume of trade through collection of data, precision farming, and geo-mapping. He also spoke of the soil-mapping exercise conducted in five countries with the support of the ITFC.

Mr Henry Monceau (Permanent Observer of the Organisation Internationale de la Francophonie to the United Nations Office in Geneva), addressed the importance of technology for development. He highlighted that technology has broken down thematic compartmentalisation and silos, creating challenges. Developing countries also face difficulties storing data, and extracting value from it locally. Africa has a low retention capacity, and treats data in the regional level, for example.

Dr Ratnakar Adhikari (Executive Director, Executive Secretariat for the EIF), commented on the possibilities technology creates to positively transform the lives of farmers. Unfortunately, it is still developed countries that are reaping most of the benefits. For developing countries, there are challenges that need to be overcome, such as infrastructure, logistics, trade facilitation methods, payment solutions, and skills limitations.

 

Stefania Pia Grottola

The opening plenary debate of the WTO Public Forum 2018 was introduced and moderated by Mr Roberto Azevêdo (Director-General, WTO), who delivered a keynote speech on what trade will look like in 2030, while covering some of the topics that will be discussed during the forum, such as ways in which trade could become more sustainable. He argued that digital platforms are creating more ways of doing trade. Thus, a question could be raised: Is today's global trading system equipped to face the changing environment we live in? With this regard, the basic principles of the WTO apply, however, they are not enough. The evolution of technologies such as quantum computing, artificial intelligence (AI), 

and blockchain is challenging the trade system by creating gaps in the current legal frameworks. Following this line, Azevêdo argued that 'we are not going to stop the evolution, but we can shape it'. Concluding his speech, he stated there is a need to start shaping technology, without waiting to completely understand all its specific elements.

The first panellist, Mr Erik Solheim (Executive Director, UN Environment, Under-Secretary-General), addressed the following question: How can trade help environmental sustainability? He stated that trade and environment are deeply interconnected, as both rely on the best use of resources. With this regard, Solheim gave the example of solar energy producing more energy than non-renewable sources in 2017, underlining that this could have not been done without trade. Despite the fact that global poverty has been reduced almost by half, the general perception is that it has doubled. This is due to a lack of publicity of data and achievements. Moreover, he advocated in favour of a triple win solution with benefits for people, by creating jobs; the environment, by promoting sustainability; and health. He stressed his point by using two examples; the introduction of ecotourism in Botswana, and the initiative in India to stop using plastic by 2022. Finally, he stressed that it is important to stop the fight between trade and environment.

The second panellist, Mr Jack Ma (Executive Chairman, Alibaba Group), addressed the question of trade in 2030 and shaping our perspectives. He shared his willingness to stop the fight between trade and environment, and adding that we need to stop worrying about the future and the evolution of technology. Ma argued that trade will definitely be different in 2030, but this should not represent a concern. He took the example of globalisation to show how at the beginning only few companies benefited from it, while today the percentage of businesses benefiting from globalisation has grown on a large scale. Following this line, he argued that in 2030 goods will not be referred to by which specific country they are made in, instead they will be referred to as 'made in the Internet' goods. Furthermore, he argued that e-commerce will be the leading force, and the service industry will create more jobs in the future than expected. For this to happen, it is important for small business to reach the market, logistics, technology and training. Finally, he concluded by stressing that we cannot stop technology, we need to embrace it: 'change yourself, but do not change technology'. During the Q&A session, Ma strongly argued in favour of innovation as a solution to current problems, stating that 'it is not the regulation that solves the problem, it is innovation'. By doing so, he underlined what, in his opinion, are the wrong ways of interference by governments. Solheim complemented the answer by showing the Norway system; where legislations are created after having open consultations with tech companies for an extended period, before implementation. With regards to the current US-China economic relations, Ma argued that tension is 'not good for anybody'. Tensions would affect not only US-China trade relations, but other countries as well. There is a need for collaboration in the creation of new jobs, and trade should not be the weapon to fight against each other.

The third panellist, Ms Laura Behrens Wu (CEO and co-founder, Shippo), addressed the question of how small businesses can be competitive. She explained how the idea of her business came into practice. One of the biggest challenges in e-commerce can be the shipping mechanisms for e-commerce stores. However, with the help of technologies in place, people can now ship directly from their online location to national and international locations. E-commerce does not have boundaries and technology represents a leverage for success.

The fourth panellist, Mr Tunde Kehinde (Co-founder, Lidya), addressed how to make finance available for small businesses. Explaining how technology can improve access to finance for small players, he talked about Lidya and its ability to finance small businesses within one day, using existing data. He stressed this point by saying that as long as small businesses in developing areas are good actors, and there is data to show that, they can get access to the bigger market. Finally, he argued that governments should create legal and policy frameworks that allow better clarity for engagement in the private sector.

The final panellist, Ms Christine Bliss (President, Coalition of Services Industries) talked about trends, collateral effects, and dangers of technology transforming trade by 2030. She argued that small economies will not grow unless trade and investment allow that. With regards to the service industry, she stated that services are integrated in all sectors, from insurance to financing. Moreover, with the advent of the Internet and the digital economy, there will be an increase in the importance of services for trade due to the evolution of AI, online platforms, and big data analytics, to cite a few. In terms of the collateral effects, the explosion of data flows should not be underestimated, with its close links to privacy and cybersecurity concerns. Answering to a question from the audience, she further stated that services will represent the new jobs of the future.

Finally, the Q&A discussion covered different topics, such as the future of currencies, and the use of cryptocurrencies in the future. It was stated that they will have to be supported by governments.

 

[Update] The Summary Report is now available.
Download to read a thematic summary of the discussions related to digital policy.

The WTO Public Forum is an annual event which provides a platform for discussing the latest developments in world trade and promotes ways to enhance the multilateral trading system. Over 1500 representatives from civil society, academia, business, media, governments, parliamentarians and inter-governmental organisations annually gather at the event.

The main theme of the 2018 edition of the WTO Public Forum will be 'Trade 2030' with the sub-themes being: sustainable trade, technology-enabled trade, and a more inclusive trading system.

The event will be held on 2-4 October 2018; registrations are open until 16 September 2018.

For more information, visit the event webpage

 

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