Digital Trade Enters New Era

The prospect for significant growth in global e-commerce and other digital trade has received a big boost. It follows the conclusion of an agreed text by a majority of states through the World Trade Organisation’s (WTO) E-Commerce joint initiative.

Altogether, 91 countries (which account for 90% of all global trade) have initially signed up to the deal, including the UK and EU member states.

Officially called the Agreement on Electronic Commerce, the first steps on its journey were taken at the WTO Ministerial Conference in 2017, with negotiations beginning in 2019.

The OECD calculates that exports of digitally delivered services were worth £5 trillion in 2020, that equates to 54% of all services exports, according to the WTO.

The BCC has supported the successful conclusion of these negotiations for several years, in our Trade Manifesto and Global Britain reports. The deal can drive expansion in e-commerce among UK businesses of all sizes.

Once it has entered into force, the agreement will help growth in digital trade in several ways:

• By moving to eliminate paper-based documents and committing to electronic formats in facilitating trade – including imports, exports, and transit.

• By setting out common standards for countries to establish single trade windows. This would provide a single-entry point in each participating country, for all electronic submissions of goods documentation.

• By stopping customs duties on the electronic transmission of goods and services. Over four-fifths of the UK’s services exports are digitally delivered to customers across the world. This would be a huge cost saving.

• By making it easier to set up contracts and invoicing by electronic means. As well as providing further support for the usage of e-signatures and interoperable e-authentications.

• By enabling easier e-payments, through access to clearing and payment systems operated by public entities.

• By strengthening rules on online consumer protection and improving cyber-security.

As the digital trade environment evolves, this agreement is likely to grow, a process which is built into the text.

Some key actors in global trade have yet to indicate support for the proposals, such as the US, Brazil and Indonesia. But the hope is that all WTO members will, in time, join the Agreement.

Then maximum certainty can be provided – by permitting its inclusion in the WTO rulebook to create a stable long-term platform for digital trade.

The BCC would urge all countries to recognise the benefits of moving to electronic trade documentation.

This could be done by adopting similar legislation to the UK’s Electronic Trade Documents Act. As more countries embrace the benefits of paperless trade the easier it becomes to use – generating more cross-border commerce, and global economic growth.

This Agreement is a win-win for consumers and e-commerce exporters. Allied with measures to roll out single trade windows for digital cross-border goods movements, it could lead to real gains in UK economic growth.

Now is the time to broaden support for it and use it to turbocharge growth in global trade.