WTO's Roberto Azevedo comes calling with global e-commerce rules on agenda

World Trade Organization (WTO) Director-General Roberto Azevedo. Photo: Reuters
With the World Trade Organization (WTO) Director General Roberto Azevedo set to begin his two-day  India trip from Wednesday, the government is yet to disclose the agenda of the meet.

However, both government officials and trade experts said under conditions of anonymity that Azevedo’s visit indicated the issue of e-commerce was taking centre stage. The proposed global rules on e-commerce have been pushed by developed nations to sideline the older development-based issues from the Doha round of negotiations, which developing nations consider their priority.

Apart from having a series of talks with the government in New Delhi, Azevedo will also attend discussions on e-commerce with the industry.

The WTO's brush with the subject had started way back during the second ministerial conference in 1998 whereby it had been decided to put a moratorium on customs duties imposed on digital transactions.

There are significant business interests involved with global e-commerce giants looking for an official route to tap the lucrative markets of the developing world, especially India.

"While India should accept technology as it comes, we need to know which segments it will hurt most. A disruptive move like this will see tech-driven commerce displacing a significant number of players in the traditional market, like small traders, as behemoths stand the chance of gobbling them up." Biswajit Dhar.

"In 2015, internet penetration in the least developed and low income countries were about 12.6 per cent and 9.4 per cent, respectively. Even for low middle income countries, the figure was well below the global average. These disparities in internet penetration should make it clear as to who would be the likely beneficiaries from e-commerce rules.” he added.

However, Commerce and Industry Minister Nirmala Sitharaman has refused to accept that the agenda of the visit is driven by the proposed global rules on e-commerce. Instead, the minister said that India would discuss ways to implement the agenda of the last ministerial level meeting held at Nairobi in 2015.

"Everything that has been agreed to in the Nairobi ministerial should be implemented," she said, adding that older development-based issues from the Doha round of negotiations needed to be addressed first.

In fact, negotiations are still continuing for a permanent solution on the issue of public stockholding for food security purposes, which has been repeatedly demanded by India. However, WTO has recognised developing members' rights to have recourse to special safeguard mechanism (SSM) as envisaged under the Hong Kong ministerial declaration.

The SSM, a long-standing demand of developing nations, allows countries to temporarily raise tariffs to deal with surging imports and subsequent price falls.

Also, a declaration on export competition saw all countries reducing export subsidies paid to farmers. While developed members had started cutting subsidies immediately, developing countries like India, which are expected to be hit harder, shall have to start by the end of 2018.

Sitharaman had earlier stated that India is not averse to discussing the new issues but strongly supports their inclusion into any discussion agenda only after consensus among WTO members.

India has to keep up pressure on the Doha issues which have seen little movement in the past few years, a senior government official said under conditions of anonymity.

"Also, it would not be difficult for us to discuss the subject comprehensively since the government is yet to come out with a clear policy on the matter," he added.

Specific rules in the sector could also curtail the space available to the government to regulate the market to protect consumer interests, addressing anti-competitive practices and preventing market failures, Abhijit Das, head of the Centre for WTO studies, has said.

According to the WTO, in 2015, global e-commerce in goods and services was about $22 trillion and has grown the fastest in emerging economies.

WHAT’S IN THE CART?
  • Developed nations have been pushing for adoption of proposed global rules on e-commerce, which aim at easing restrictions, increasing access to key markets like India
  • India has stated the issue should be included in the official agenda, only after consensus among members
  • India will be looking to discuss issues regarding food, agri emanating from the old Doha round of negotiations
  • Discussion on e-commerce will gain significance before the ministerial conference in Argentina, later this year

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