According to OECD data, by 2020 digital trade represented 25% of global trade, amounting to just under $5 trillion. Digitalization of economy is on the agenda for many national governments as they come to appreciate the transformative power of technology in reducing transactional expenses and improving the competitiveness of their economies.
In July 2024, a working group of more than 90 WTO member states completed work on the “stabilized text” for the Joint Statement Initiative of Electronic Commerce (JI). The stabilized text is not yet part of the WTO legal framework, however it offers a consensus view of a large portion of the 164 current member states on the regulation of global electronic commerce (ecommerce) and overcoming institutional barriers to digital trade. (While the United States has not supported the stabilized text as of now, the initiative received strong support in the EU and the UK.)
The JI text covers the following aspects of ecommerce in five main sections:
- Enabling Ecommerce: This section covers measures enabling recognition of electronic and paperless means of contract, electronic authentication and signatures, and electronic invoicing. Under the JI, the parties “shall not deny the legal effect, legal validity, or admissibility as evidence in legal proceedings of an electronic signature solely on the basis that the signature is in electronic form,” except in circumstances otherwise provided for under the national laws or regulations. The parties are also encouraged to make the import-export processes streamlined by establishing a “single entry point” for the electronic submission of the customs documentation.
- Openness and Ecommerce: This section incorporates a moratorium on customs duties on electronic transmissions: “No Party shall impose customs duties on electronic transmissions between a person of one Party and a person of another Party.” It also focuses on public access to government data. The parties are encouraged to make government data digitally available in a machine-readable and open format, searchable and retrievable, up to date, accompanied by metadata that is (to the extent possible) based on commonly used formats that allow the user to understand and utilize the data, and at no or reasonable cost to the user.
- Trust and Ecommerce: The JI acknowledges the goals of protecting consumers online and touches upon personal data protection and cybersecurity. It may be of interest to transactional lawyers to see how the JI defines the terms “misleading, fraudulent, and deceptive commercial activities,” “material misrepresentations,” and “unsolicited commercial electronic message.” The JI also outlines the goal for each party to establish a national authority for cybersecurity incident response and collaborate with the other parties on identification and mitigation of risks.
- Transparency, Cooperation, and Development: The JI promotes cooperation between the parties on digital trade and regulations and focuses on inclusion of developing and least-developed countries in digital trade. Particular areas for cooperation include protection of personal data, online consumer protection, security in electronic communications, competition, electronic authentication, cross-border logistics, and trade facilitation for cross-border ecommerce, including the use of customs warehouses or free zones, and regulatory cooperation in areas such as data exchange and product safety risk warning. These selected practice areas indicate that the working group appreciates that some further work needs to be done in such areas to address potential hurdles.
- Telecommunications: Finally, the JI emphasizes that telecom infrastructure is a key foundation for digital economy and fair competition. The parties are specifically encouraged to assign frequency bands for public telecommunication services “through an open process that takes into account the public interest” and “using market-based approaches, such as bidding procedures.” The JI also deals with anticompetitive practices in the telecom industry, including cross-subsidization and using information from competitors to restrict competition, and recognizes that competition may be affected by the scarcity of telecommunication facilities and resources, urging the parties to ensure “reasonable, non-discriminatory and transparent terms and conditions” of access to such facilities and resources and promote interconnection between providers. To ensure transparency and accountability in the telecom industry, the JI also sets forth that licensing criteria must be publicly available and national regulators should not have an interest in any of the providers.
While the text of the JI is nonbinding as of now and in many instances declarative, it provides insights into the potential direction of future regulatory developments in ecommerce worldwide and highlights the most critical issues for ensuring secure and reliable digital trade.