India fears that the new global e-commerce rules could provide unfair market access to foreign online retail firms, hurting the rapidly growing domestic start-ups
Geneva: India has rejected fresh efforts by a clutch of countries led by the European Union (EU), Japan, Canada and Australia to negotiate new global e-commerce rules under the aegis of the World Trade Organization (WTO).
During an informal meeting at the WTO on Monday, the EU, Canada, Australia, Chile, Korea, Norway and Paraguay, among other countries, circulated a restricted draft ministerial decision to establish “a working party" at the upcoming WTO ministerial meeting in Buenos Aires and authorizing it to “conduct preparations for and carry out negotiations on trade-related aspects of electronic commerce on the basis of proposal by Members".
India fears that new rules could provide unfair market access to foreign companies, hurting the rapidly growing domestic e-commerce platforms. A key demand by the developed countries is to make permanent the current ban on customs duties on global electronic transactions—they were suspended in 1998.
Presumably playing on India’s mind is the previous WTO deal on the Information Technology Agreement, under which it agreed to abolish tariffs on hardware, squeezing the domestic electronics manufacturing industry.
Responding to the latest proposals by the developed countries, India asked the sponsors to stick to the existing mandate set out in the 1998 electronic commerce work programme.
“According to us (India), negotiations on rules and disciplines in e-commerce would be highly premature at this stage and like a leap in the dark, especially given the highly asymmetrical nature of the existing e-commerce space," India’s trade envoy J.S. Deepak said during the meeting, according to a person who asked not to be identified.
The one-page draft proposal circulated by the developed countries and reviewed by Mint, says, “The Working Party shall establish its own procedures and shall report periodically to the General Council".
Prior to the latest proposal from the EU and other members, Japan and Russia also circulated their respective submissions seeking to establish a “working group".
Japan claimed that all “existing WTO Agreements apply to electronic commerce". According to it, even issues such as the free flow of data located on computer servers without data localization requirements, permanent moratorium on customs duties, non-disclosure of source code and prohibition of forced technology transfer will come under the purview of future negotiations as and when they are launched.
Several issues raised by the US overlap with the arguments posed by Japan. However, on Monday, the US refrained from joining the debate.
Deepak said that India wants to continue with the current work programme of 1998 because it remains “exploratory and non-negotiating".
More importantly, India has linked the extension of moratorium on e-commerce transactions till 2019 to “a similar renewal of moratorium on TRIPS non-violation and situation complaints". TRIPS is an agreement on trade-related aspects of intellectual property rights.
A large majority of developing countries supported India’s stand. The African Group of more than 50 countries, while rejecting any new institutional arrangement, said that it was willing to “agree to continue the exploration of issues under the 1998 Work Programme".
Rwanda, which spoke on behalf of the African Group, said the proponents for e-commerce negotiations made a flawed case by “advocating for new multilateral rules on new issues such as e-commerce". By suggesting a “false narrative", the sponsors seem determined at “kicking away the development ladder" as set out in the Doha Development Agenda. “The multilateral rules as they are, are constraining our domestic policy space and ability to industrialize," Rwanda argued. “In our view, the Work Programme has not been tested to warrant a change in its structure."
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