Efforts to cobble an ambitious agenda for free data flows and sweeping reforms at the global trade body by major industrialized countries suffered a setback at the G20 trade ministerial summit that concluded Sunday at Tsukuba, near Tokyo.
Trade ministers from several developing countries called for balanced approaches in both electronic commerce and proposed reforms to be discussed at the World Trade Organization. Several trade ministers at the meeting spoke about the systemic crisis at the WTO’s appellate body following the repeated blocking to fill vacancies by the US during the past two years.
“We agree that action is necessary regarding the functioning of the dispute settlement system consistent with the rules as negotiated by the WTO Member," the G20 ministerial communiqué issued at the end of the two-day meeting in Tsukuba emphasized.
Given the divergent approaches to the two important issues--digital trade and WTO reforms, the chair of the conference Hiroshige Seko, Japan’s minister of trade, industry and economy, issued a chair statement that expressed “serious concerns" about the trade tensions triggered off by the US.
On free cross-border data flows, several developing countries expressed sharp concerns. “From our perspective, the security of electronic transactions and the rights of businesses and consumers to have their data secured are crucial," Indonesia’s trade minister Enggartiasto Lukita told his counterparts at the meeting, according to an Indonesian official who asked not to be quoted.
“Warning about predatory practices of bigger digital platforms towards the smaller ones," the Indonesian minister called for “the right balance between the free flow of data on one hand, and appropriate protection of certain types of data on the other hand."
Trade ministers from Japan, the US, and Australia among others pressed for an ambitious agenda of commitments in the e-commerce centering around free data flow and removal of restrictions for storing data in foreign servers. Japan has advanced the concept of “data free flow with trust" at the meeting. The US and Japan want sweeping commitments in electronic commerce at the WTO.
Against this backdrop, trade ministers from several developing countries spoke about the growing pitfalls in the e-commerce agenda that is being sought to be pushed by major industrialized countries. The developing country trade ministers underscored the need to address digital divide and digital dependency before discussing ambitious commitments in e-commerce.
In the face of divergent approaches among the participating countries, the final G20 trade ministerial communique reaffirmed the importance of the ongoing 1998 work program on electronic commerce as demanded by India, South Africa, and Indonesia among others at the meeting.
India had all along demanded that the 1998 work program on electronic commerce which has tasked members to study all the aspects of e-commerce must remain at the core of e-commerce negotiations. India and South Africa have submitted a proposal last week to reassess the fiscal and other implications for continuing with the moratorium for not imposing customs duties.
The G20 trade ministerial communique merely mentioned about the so called joint statement initiative on electronic commerce that was launched by industrialized countries at the WTO’s eleventh ministerial meeting in Buenos Aires in December 2017.
Sharp differences also came to fore during the meeting on the approaches to be adopted for the WTO reforms. The US has called for denying special and differential flexibilities to developing countries such as India, South Africa, and other developing countries in the current and future trade negotiations. But trade ministers from developing countries rejected such divisive approaches to be adopted at the WTO, said a G20 official who asked not to be quoted.