The Ministry of Commerce interprets the WTO e-commerce negotiations: China is an important participant and main sponsor of the negotiations, and has put forward nine proposals

On December 20, Singapore, Japan, and Australia, the conveners of the WTO e-commerce negotiations, issued a tripartite ministerial statement, announcing that 90 WTO members, including China, the United States and Europe, had substantially concluded some negotiations on global digital trade rules.

On the 25th, according to information on the website of the Ministry of Commerce, the head of the WTO Department of the Ministry of Commerce said that the negotiations aimed at formulating high-standard digital trade rules. Participants have reached a basic consensus on 13 topics covering three broad areas, including promoting digital trade facilitation, opening up the digital environment, and enhancing business and consumer trust.

The person in charge of the WTO Department of the Ministry of Commerce said that in the next step, the participants will continue to promote the development of issues such as tariff exemption for electronic transmission, electronic payment, telecommunication services, information and communication technology products using cryptography, and other issues as soon as possible, and strive to reach high-level rules. The convener announced the substantive conclusion of the consultations on some issues, aiming to lock in the existing achievements and lay the foundation for promoting the resolution of the remaining issues and the full conclusion of the negotiations in 2024.

13 topics in three areas

The rise of digital technology has led to the vigorous development of the global digital economy, creating new opportunities for international trade. The WTO has formed a relatively complete system of rules in the fields of trade in goods, trade in services, and intellectual property rights, but has not yet established special rules in the fields of digital economy and digital trade.

The head of the WTO Department of the Ministry of Commerce said that in order to respond to the demands of the industry, promote the multilateral trading system to keep pace with the times, and help members, especially developing members, better integrate into the international trading system, in January 2019, 76 WTO members including China, the United States and the European Union jointly issued a joint statement to start negotiations on trade-related e-commerce issues. Singapore, Japan and Australia are the conveners of the negotiations.

So far, the number of participants in the negotiations has expanded to 90 members, covering more than 90% of global trade, including 38 developed members, 47 developing members and 5 least developed members.

The head of the WTO Department of the Ministry of Commerce said that the participants have reached a basic consensus on 13 topics, covering three major areas: First, promoting digital trade facilitation. Specific rules include encouraging the adoption of principles consistent with the UNCITRAL Model Law on Electronic Commerce to develop a legal framework for electronic transactions, recognizing the legal effects of electronic invoices and electronic contracts, promoting paperless trade and the construction of "single window" systems, improving the efficiency and transparency of international trade, and further promoting digital transformation and development.

The second is to open up the digital environment. Specific rules include encouraging members to open up government data that is allowed to be disclosed by law, and promoting the development and application of relevant data.

The third is to enhance business and consumer trust. Specific rules include strengthening the protection of personal information and online consumer rights and interests, preventing spam electronic information, etc., by establishing a corresponding legal framework and promoting international cooperation, so as to jointly maintain a healthy environment for digital development.

China actively participates in the formulation of rules

In recent years, the mainland has developed rapidly in digital trade and has become an important digital trade country in the world. According to WTO data, in 2022, the scale of service trade that can be digitally delivered by the mainland will reach 2.5 trillion yuan, an increase of 78.6% from five years ago, and the import and export scale of cross-border e-commerce will reach 2.1 trillion yuan, an increase of 30.2% from two years ago.

The head of the WTO Department of the Ministry of Commerce said that the WTO e-commerce negotiations emphasize the principles of openness, inclusiveness and transparency, and are carried out on the basis of members' proposals. China is an important participant and main sponsor of the negotiations, participated in the consultations on all issues with a positive and constructive stance, and put forward nine proposals on more than 20 specific topics, most of which were included in the consensus.

The head of the WTO Department of the Ministry of Commerce also said that during the negotiation process, China maintained close communication with other participants, facilitated talks at key stages, put forward practical solutions to key issues on many occasions, and took the initiative to bridge the differences between all parties. China has also played the role of a bridge to address the concerns of developing members and promote negotiations to reach an outcome that is beneficial to them. The Chinese side has played an important and constructive role in the negotiations, which has been highly praised by all parties.

Strive to achieve a high level of rules

According to the information on the website of the Ministry of Commerce, Wang Wentao, Minister of Commerce of China, pointed out in a written speech that promoting the digital and green development of trade has become a global consensus. Digital trade is the new engine of global trade growth in the 21st century. The WTO Joint Statement on E-Commerce Negotiations initiative is the core platform for global digital trade rule-making. China hopes to reach high-standard, balanced and inclusive digital trade rules as soon as possible, so as to help developing members seize and benefit from relevant development opportunities.

On the 20th, the tripartite ministers of Singapore, Japan and Australia, the conveners of the WTO e-commerce negotiations, said in a statement that the participants have reached a basic consensus on 13 topics such as electronic signatures and authentication, online consumer protection, paperless trade, electronic transaction frameworks, and electronic contracts, and will promote the formation of consensus on issues such as electronic payment, telecommunication services, information and communication technology (ICT) products using cryptography, and development, and strive to make high-level commitments on the exemption of tariffs on electronic transmission, and increase the commercial significance of the agreement.

In the future, the participants will continue to discuss data flow, localization of computing facilities, source code, and horizontal issues, and conclude negotiations as soon as possible.

The WTO's e-commerce agenda dates back to 1998, when parties agreed to avoid tariffs on then-fledgling digital trade. Since then, WTO members have agreed to renew the moratorium at the biennial ministerial meetings.

In 2022, the Work Plan on Electronic Commerce agreed at the 12th WTO Ministerial Conference (MC12) only extended the temporary exemption of tariffs for electronic transmissions to the next Ministerial Conference (MC13).

However, at MC12, some members, including India, disputed this, arguing that the boom in the Internet over the past 30 years justified a reconsideration of whether the temporary tariff exemption for electronic transmissions was still in the economic interest of members.

Cui Fan, a professor at the School of International Business and Economics at the University of International Business and Economics and director of the research department of the China World Trade Organization Research Association, said in an interview with the first financial reporter that although MC12 has determined the practice of maintaining tariff-free, it does not give a clear definition of "electronic transmission", which is also the focus of controversy on this issue.

Cui Fan said that for example, the European Union and other countries advocate the exemption of electronic transmission tariffs, and its definition includes not only the electronic transmission services themselves, but also the content of their transmissions, but developing countries such as India have advocated the imposition of electronic transmission tariffs in the MC12 discussions, and some other countries also have different views on whether the scope of exemption applies to electronic transmission content.

On December 7, the International Monetary Fund (IMF) and others jointly released a report on digital trade. The report, titled Digital Trade for Development, shows that WTO members' current practice of not imposing tariffs on electronic transmissions, known as "tariff moratoriums," has a limited impact on government revenues.

The report acknowledges that there are uncertainties about the scope of the tariff moratorium and the definition of electronic transmissions, and that the potential revenue that can be collected from e-transmission tariffs is currently estimated to be between 0.01 and 0.33 per cent of total government revenue for developing countries.