The WTO Joint Statement Initiative (JSI) on e-commerce
As the key policy player in modern global trade, the WTO has established a system of agreements which provides the legal architecture for the liberalization of international trade. At the WTO, discussions on e-commerce are taking place in two parallel tracks: the WTO Work Program on Electronic Commerce (WPEC), launched in 1998 with a non-negotiating and exploratory nature, and the Joint Statement Initiative (JSI) on E-commerce, which aims to produce a binding agreement among its members. The JSI on e-commerce encompasses both traditional trade topics (e.g. trade facilitation) and several digital policy issues, such as cross-border data flows and data localisation, online consumer protection and privacy and network neutrality.
What is a 'Joint statement Initiative' (JSI) in the context of the WTO?
JSIs are a negotiating tool initiated by a group of WTO Members who seek to advance discussions on certain specific issues without adhering to the rule of consensus decision-making involving the whole WTO membership. They are open to any WTO Member. At the present, there are several active JSIs. On the occasion of the 11th WTO Ministerial Conference, in 2017, JSIs were created on the following issues: e-commerce, investment facilitation for development; micro, small and medium-sized enterprises (MSMEs); domestic regulation in services; trade and women’s economic empowerment. In 2020, two new initiatives were launched on trade and the environment, focusing on environmental sustainability and plastics pollution. In 2021, members of the Joint Initiative on Services Domestic Regulation concluded negotiations.
Some Members see JSIs as key mechanisms to make progress on trade liberalization, in a context in which consensus on rulemaking has been harder to achieve on a multilateral basis. Other countries argue that JSIs go against consensus-based decision-making and weaken multilateralism at the WTO. India and South Africa, in particular, introduced a communication in February 2021 (WT/GC/W/819), questioning the legality of JSIs and their outcomes.
When was the Joint Statement Initiative on e-commerce launched?
The first Joint Statement on Electronic Commerce (WT/MIN(17)/60) was released at the 11th Ministerial Conference in Buenos Aires on 13 December 2017. The 71 signatory members to the statement announced their goal to ‘initiate exploratory work together toward future WTO negotiations on trade-related aspects of electronic commerce.’
In 2018, members involved in the first JSI on e-commerce met on an almost monthly basis. Proposals for issues to be added to the agenda were tabled by both developing countries (e.g. Argentina, Brazil, Colombia, Costa Rica, and Singapore) and developed countries (e.g. Australia, Canada, the EU, Japan, New Zealand, and the USA).
During the 2019 World Economic Forum Annual Meeting in Davos, 76 members announced a Second Joint Statement (WT/L/1056) expressing the participating members’ intention to begin negotiation at the WTO on ‘trade-related aspects of electronic commerce (…) that builds on existing WTO agreements and frameworks with the participation of as many WTO Members as possible.’ The co-facilitators of the JSI on e-commerce are Australia, Japan and Singapore.
What is the relation between the JSI on e-commerce and the Work Program on e-commerce?
E-commerce discussions in the WTO currently take place in two parallel tracks. The first is known as ‘the multilateral track’, which was launched in 1998, following the Ministerial Declaration on Global Electronic Commerce. The second involves a subset of WTO members, which are currently part of the WTO JSI on e-commerce.
The 1998 Ministerial Declaration on e-commerce launched the Working Program on e-commerce (WPEC) and put in place a moratorium on customs duties on electronic transmissions, by stating that Members would “continue their current practice of not imposing customs duties on electronic transmissions”. The moratorium has been renewed roughly every two years at the WTO Ministerial Conference. The last renewal took place in 2019 by means of a General Council decision (WT/L/1079).
The WPEC was mainly designed to build understanding around the trade-related aspects of e-commerce, without a pre-set objective to negotiate new rules. Its main goals are: a) to examine all trade-related aspects of e-commerce; b) to examine the relation between e-commerce and WTO agreements; c) to give consideration to the economic, financial, and development needs of developing countries.
While the WPEC involves all WTO Members and has an exploratory and informative nature, the JSI involves a subset of WTO members and is aimed at achieving a high standard negotiated outcome that builds on existing WTO Agreements and frameworks with the participation of as many WTO Members as possible.
Which countries are part of the JSI on e-commerce?
Currently, the total number of WTO members formally participating in the e-commerce JSI negotiations is 86. They account for slightly more than half of all WTO members and 90% of global trade. With regards to the participation of developing countries, some regions remain notably underrepresented. There are six WTO members from Africa: Benin, Nigeria, Côte d’Ivoire, Kenya, Cameroon, and Burkina Faso. There are four participants from LDCs, namely: Benin, Lao PDR, Myanmar, and Burkina Faso. The regions that are least represented in the JSI are Africa, and the Caribbean, which has no participants. In addition, none of the developing Pacific Island countries are part of the JSI on e-commerce.
What is being discussed in the JSI on e-commerce?
Over recent years, an increasing number of digital policy issues have been included under trade negotiations on e-commerce at the WTO, and also in the context of Regional Trade Agreements (RTAs). This reality is reflected in the negotiating agenda of the JSI on e-commerce, which includes not only traditional issues, such as trade facilitation and market access, but also a wide range of digital policy issues, such as data flows, localisation, data protection, cybersecurity and spam.
The themes advanced in members’ proposals have been aggregated in six sections in JSI’s negotiating document: A. enabling electronic commerce; B. openness and e-commerce; C. trust and e-commerce; D. cross-cutting issues; E. telecommunications; and F. market access. Click on "expand" to access a table that provides an overview of the themes and the related issues and sub/issues currently considered in the JSI negotiations.
How are discussions being carried out?
Following the COVID-19 pandemic, JSI meetings started to take place in hybrid and virtual formats. Negotiations take place both in small groups and in monthly plenary meetings. There are 10 small groups working in parallel, covering the following issues: i) consumer protection; ii) spam; iii) e-signatures and electronic authentication; iv) paperless trading; v) digital trade facilitation; vi) source code; vii) open government data; viii) market access; ix) customs duties on electronic transmissions, and x) open Internet access.
The adoption of a small groups approach aimed to increase efficiency (since the groups work in parallel) and reduce differences of view on the specific issues for which quick progress is more likely to be made. Consolidated negotiating texts - working documents that capture the progress made in the negotiations and serve as the basis for further work - are periodically produced by the chairs. The first consolidated text was published in December 2020 (INF/ECOM/62.rev1). The second and latest document (INF/ECOM/62.rev2) was published in September 2021.
Most of the documents introduced by Members and produced by the chairs - including the consolidated negotiating texts - are accessible only to members of the WTO. A proposal introduced by Canada, New Zealand and Ukraine in 2020 (INF/ECOM/42/Rev.2), aimed at enhancing transparency in the JSI by making negotiating summaries public, did not lead to any visible change in procedure.
What is the status of negotiations?
Regular updates on the negotiations are issued by the three co-coordinators of the JSI. According to these updates, negotiators have reached convergence in a few areas. In February 2021, the facilitator of the small group discussion on spam announced that the group had finalised a ‘clean text’ – in which brackets were removed, and convergence was reached among members. In April 2021, a clean negotiating text on the issue of electronic signatures and authentication was finalised. In September, JSI participants reached agreement on the topics of consumer protection and open government data. A clean text on ‘transparency’ has been ‘parked’ for the time being, subject to the final scope and legal structure of the negotiated outcome.
What are the expectations for the JSI in 2022?
In the last months of 2021, JSI members intensified work in order to narrow differences before the 12th Ministerial Conference (MC12), which was scheduled to take place from 30 November to 3 December. According to a communication from 10 November, facilitators of small group discussions reported that work has intensified to find common ground in the areas of e-invoicing, cybersecurity, customs duties on electronic transmissions, open internet access (a topic more widely known in digital policy circles as net neutrality) and paperless trading. According to them, convergence is within reach for the latter two areas.
On 26 November, the WTO General Council decided to postpone MC12 indefinitely, due to the tightening of COVID-19-related restrictions. In spite of that, the co-conveners of the JSI remain optimistic that it will be possible to achieve convergence on the majority of issues in the negotiations by the end of 2022. At the same time, many developing country members are pushing to reinvigorate the WTO Work Program on Electronic Commerce.