The origins of the joint statement initiative (JSI) can be traced back to the 11th Ministerial Conference that took place in December 2017. At this conference 71 WTO members agreed to start an exploratory work towards the future of the trade negotiations of e – commerce. Then in January 2019, 76 members of, WTO confirmed in a joint statement to work towards these negotiations. As of now, February 2023 there are total 86 members participating in these discussions among which India is one of the members. This initiative is co – convened by Ambassador George Mina (Australia), Ambassador YAMAZAKI Kazuyuki (Japan) and ambassador Tan Hung Seng (Singapore). [1]
WTO discusses e – commerce on two parallel tracks, that is through Work Program on Electronic Commerce and Joint Statement Initiative. The WPEC was launched in 1998 with non – negotiating and exploratory nature whereas JSI produces binding agreements on its members. JSI seeks to advance the discussions on negotiating tools without adhering to the rule of consensus decision making. JSIs were created on the following issues: JSI on e – commerce, JSI on investment facilitation for development, JSI on service domestic regulation, informal working group on small and medium sized enterprises, informal working group on trade and gender. In 2020, two new discussions on trade and environmental sustainability and plastic pollution and environmentally sustainable trades were added.
WHAT IS DISCUSSED IN JOINT STATEMENT INITIATIVES?
As the technological world keeps on evolving the number of issues faced because of it increases exponentially. These issues are also sometimes related with the trade negotiations and digital policies related to e – commerce. These issues are reflected on and discussed with in depth reality in the agendas of the JSI committees. Here not only traditional issues such as trade facilitation but also contemporary issues such as data flow, localisation, data protection, cybersecurity and spam are also discussed.
After the emergence of the COVID-19 pandemic, JSI meetings began incorporating hybrid and virtual formats. Negotiations now occur in various settings, including small groups and monthly plenary sessions. These small groups work concurrently, addressing a diverse array of topics, such as consumer protection, spam, e-signatures, electronic authentication, paperless trading, digital trade facilitation, source code, open government data, market access, customs duties on electronic transmissions, and open Internet access.[2] Additional small groups are formed as necessary. For instance, in May 2022, new small groups were established to focus on privacy and updating the telecommunications reference paper. Furthermore, in September, a small group specifically dedicated to information and communication technology (ICT) products that utilize cryptography was formed. The implementation of a small groups approach was intended to enhance efficiency by allowing parallel work and minimize divergent perspectives on specific issues where rapid progress is more feasible.
SCOPE AND COVERAGE OF JSI
The objective of the WTO E-commerce Joint Statement Initiative (JSI) is to establish a set of shared regulations concerning various aspects of electronic commerce. These include facilitating e-commerce activities, fostering transparency and reliability in online trade, addressing overarching concerns, ensuring telecommunications access, and enhancing market entry for e-commerce enterprises. Although there is no universally accepted definition for e-commerce, the WTO Work Programme defines it as the use of electronic means to engage in activities such as producing, distributing, marketing, selling, or delivering goods and services to consumers. The initial Joint Statement Initiative on e-commerce was issued by WTO members during the WTO Ministerial Conference in 2017. However, it wasn’t until January 2019, at the World Economic Forum in Davos, that 76 WTO members released a Joint Statement on Electronic Commerce, expressing their intention to initiate negotiations on e-commerce’s trade-related aspects. Subsequently, in 2020, a consolidated text was formulated and has served as the foundation for ongoing negotiations among 86 WTO members. The consolidated draft negotiating text of the JSI builds upon six fundamental areas that arose from the preceding rounds of negotiations.
- Enabling e-commerce:
- These areas include electronic transaction frameworks, electronic authentication and e-signatures, electronic contracts, electronic invoicing, and electronic payment services.
- The consolidated draft negotiating text of the JSI also addresses additional vital aspects related to digital trade facilitation and logistics, paperless trading, de minimis thresholds, customs procedures, trade policy enhancements, single windows data exchange and system interoperability, logistics services, and advanced trade facilitation measures.
- Openness and e – commerce:
- Non-discrimination and liability – Ensuring fair treatment of digital products; regulating liability for interactive computer services; addressing infringement issues related to interactive computer services.
- Flow of information – Facilitating the transfer of information across borders through electronic means; determining the placement of computing facilities; addressing the handling of financial information and the location of computing facilities for financial service providers covered by the regulations.
- Custom duties on electronic transmissions
- Access to internet and data – Promoting the availability of government data to the public; upholding principles of open Internet access and usage for electronic commerce and digital trade; ensuring access to and appropriate use of interactive computer services; and fostering competition in relevant markets.
- Trust and e – commerce:
- Consumer protection – Incorporating measures for online consumer protection, as well as addressing the issue of unsolicited commercial electronic messages.
- Privacy – Safeguarding the privacy and protection of personal information or personal data.
- Business trust – The underlying code of a software application, commonly known as source code; information and communication technology (ICT) products that utilize cryptography.
- Cross – cutting issues:
- Transparency, domestic regulation and cooperation – Promoting transparency in trade-related matters, including the electronic availability of trade-related information; managing domestic regulations; fostering cooperation among stakeholders; establishing mechanisms for effective collaboration.
- Cybersecurity
- Capacity building – Exploring various avenues for capacity building and providing technical assistance.
- Telecommunications:
- Updating the WTO papers on telecommunication services – The extent and coverage of regulations; explicit explanations of terms and concepts; protective measures to ensure fair competition in interconnection; provision of universal service; processes for licensing and authorization; establishment of a Telecommunications regulatory authority; allocation and utilization of limited resources; recognition of essential facilities.
- Network equipment and products – Network equipment and products relevant to electronic commerce.
- Market access:
Facilitating market access for services; addressing temporary entry and stay of personnel involved in electronic commerce; ensuring market access for goods.
IMPACT OF JSIs ON INDIA
Rapidly endorsing trading obligations may limit the opportunity to develop suitable policies. However, refraining from participating in trade negotiations would result in India missing out on chances to actively shape these regulations. China and Indonesia, on the other hand, expressed their intention to influence the rules from within the initiative instead of observing from the side lines. Engaging in negotiations does not necessarily entail compromising. For instance, it is possible to negotiate exceptions to digital trade rules, such as those pertaining to “legitimate public policy objective” or “essential security interests,” in order to safeguard policymaking when necessary. Drawing inspiration from the Digital Economy Partnership Agreement (DEPA) among Singapore, Chile, and New Zealand, India can advocate for a framework where countries have the flexibility to select and adhere to specific modules according to their preferences.
Reasons of resisting JSI could be:
- Weakens multilateralism – India and South Africa have appropriately highlighted that the JSI violates the consensus-based structure of the WTO, which ensures that every member has equal representation and voting rights, regardless of their economic status.
- Fear of arm-twisting developing countries – Despite the fact that JSI participants represent more than 90% of global trade and the initiative is open to new members, a significant number of WTO members, primarily from developing nations, choose not to participate in these negotiations. Their concern stems from the apprehension of being coerced into accepting global regulations that are primarily shaped by developed countries.
- Sovereign right of states to frame policy – Numerous nations have implemented data localisation requirements, which enforce the storage and processing of data within their own borders. Developed countries argue that these mandates raise compliance expenses, impede innovation, and can be seen as unfair protectionism. Similarly, a dispute arises concerning domestic laws that mandate the disclosure of source codes. Developing countries believe such transparency is crucial for algorithmic fairness and transparency. Data sovereignty is advocated as a method to counteract “data colonialism,” and any policy in this area should benefit not only major entities in developed countries but also smaller players in developing countries.
LOOKING AHEAD
The issue of customs duties on electronic transmissions has sparked extensive debate in the e-commerce sphere. This debate revolves around the WTO e-commerce moratorium, which has prohibited the imposition of customs duties on electronic transmissions since 1998. While the term “electronic transmissions” lacks a detailed definition, the WTO Work Programme on Electronic Commerce broadly defines “electronic commerce” as the electronic-based production, distribution, marketing, sale, or delivery of goods and services. However, some argue that this definition should also encompass digitizable products such as software, e-commerce, online search services, online advertising, motion pictures and video/audio activities, as well as data hosting, processing, and communication.
The debate on customs duties primarily highlights a north-south divide, with developing countries, led by India and South Africa, expressing concerns about the adverse impact of the moratorium. They argue that it leads to a loss of tariff revenue, other charges, and taxes, affects industrialization efforts, and has repercussions on sectors like manufacturing that utilize digital technologies like 3D printing. Although India and South Africa are not members of the Joint Statement Initiative (JSI), they submitted a proposal to the WTO, urging a re-evaluation of the moratorium in order to address these concerns. They advocate for an inclusive and development-oriented digital transformation agenda, arguing that the current discussion within the JSI excessively focuses on binding rules that could marginalize developing countries. They also cite a research paper by UNCTAD on Bridging the Digital Divide to support their stance.
On the other side, developed nations believe that the benefits of the moratorium outweigh the loss of tariff revenue and other impacts.[3] They contend that customs duties could hinder e-commerce growth by increasing costs and creating technological challenges. WTO members, including Australia, Singapore, and Switzerland, submitted a paper to the WTO advocating for a broader discussion that considers their perspective. They argue that lifting the moratorium would not have the desired effects on government revenue but would instead result in high costs for consumer welfare and export competition. They also refer to a research paper by the OECD to support their arguments.
In preparation for the 12th Ministerial Conference (MC12), there are agreed-upon texts already proposed concerning spam, electronic signatures and authentication, e-contracts, online consumer protection, and open government data. A text on transparency is in the making which will consist of the final scope and legal framework of the final decision of the MC12. The discussions which were held here led to the common interest of the members such as e – invoicing, cybersecurity and custom duties on e – transmissions. Agreement is potentially attainable, particularly on issues related to open internet access and paperless trading. Non – discriminating treatment of digital products and the newly submitted proposal of addressing.
[1] (Joint Initiative on E-commerce, n.d.)
[2] (The WTO Joint Statement Initiative (JSI) on e-commerce, n.d.)
[3] (Joint Statement Initiative on Electronic Commerce, n.d.)
Author: Vedansh Jinde
Juris Centre 