[Ecommerce] MITI 's proposal for WTO E-Commerce Initiative

[Takeshi Muramoto]

Info
Global E-Commerce　Presets Digital Opportunity to Close the Divide Between
Developed and Developing Countries.

MITI’s Proposal for WTO E-commerce Initiative (2nd Draft)wards eQu

http://www.miti.go.jp/english/information/data/cw001019e.html


Background and Purpose

This draft proposal reflects our firm belief that the future of the Internet
and E-Commerce shall be for the betterment of all people and all nations.
E-Commerce is, and will become more, vital not only to business, but also to
society itself throughout the world. The "quality of life" of every person
in the information society is surely based on reliable and stable system of
networks. The confidence of ordinary people as well as business towards
activities on the Internet is our common public policy goal. In the Okinawa
Charter on Global Information Society, the G8 emphasized that Information
and Communications Technology (IT) is one of the most potent forces in
shaping the twenty-first century.

The Charter also states that the G8 renews its commitment to the principle
of inclusion: everyone, everywhere should be enabled to participate in and
no one should be excluded from the benefits of global information society.
E-Commerce presents opportunities for all consumers and small businesses to
obtain easy access to the world market via the Internet. In the past, the
world market was readily accessible only to large global companies located
mainly in developed countries. E-Commerce is a new and powerful medium which
can help close the digital divide among countries and achieve global
eQuality in the new world economy. This can only be accomplished if member
countries take balanced steps between consumers and businesses now and in
the future to ensure that an international framework related to E-Commerce
benefits both developed countries and developing countries. In undertaking
this initiative, member countries should take into consideration the
viewpoints of both consumers and the industries. "Digital trade policy" is
crucially important from these viewpoints.

This paper is the firstsecond draft proposal for a WTO E-Commerce initiative
crafted by the Ministry of International Trade and Industry (MITI) of Japan.
The primary purpose of this document is to present a list of issues to
facilitate domestic and international discussions at the WTO.



Benefit for Developing Economies


E-Commerce can have positive effects for all economies contributing to the
mutually supportive goals of sustainable economic growth, enhancing the
public welfare, and fostering social cohesion. It also can be instrumental
in helping developing economies participate in the multilateral trading
system. Benefits accruing to developing economies from the rapid growth of
E-Commerce will help them meet more effectively their vital development
goals, such as poverty reduction, health and education.


To achieve global eQuality in the information society by benefit from the
tremendous power of E-Commerce, the WTO Members should build a policy
environment on a global scale, not only to stimulate and facilitate the
transition to the information society, but also to reap its full economic,
social and cultural benefits.


At the same time, Members should recognize the need to build up the capacity
in developing economies to use effectively the opportunities presented by
E-Commerce which can help close the digital divide. In the Okinawa Charter,
the G8 reaffirmed its commitment to the efforts underway to formulate and
implement a coherent strategy to bridge the digital divide. The WTO Members
should contribute to this vital issue taking into account the diverse
conditions and needs of developing economies.


　

1. Trade Liberalization of E-Commerce Related Sectors

*Members shall identify and liberalize "E-Commerce Enabling Sectors" which
provide the essential infrastructure for E-Commerce.


*Though the existing GATS agreements and commitments apply to the services
provided through E-Commerce, "E-Commerce Contents Sectors" further trade
liberalization of these services shall be pursued to create a truly global
environment that enhances the development of E-Commerce.


*The definition and coverage of sectors need to be discussed in close
consultation with industries. International coordination among industries
also needs to be promoted. Interests of consumers should be taken fully into
account to improve convenience, choice and the range of transactions.


*Some products can be delivered both online and in physical form. Careful
consideration should be given to avoid favoring one form of delivery over
another.


　

2. Principles for Domestic Regulations


*When Members take domestic regulatory measures to achieve legitimate
domestic policy including avoiding fundamental risks to the Internet
society, each Member shall agree to the following principles concerning the
nature and extent of regulatory measures. These principles which are based
upon GATT, GATS (e.g. Article VI) and TRIPS, the principles of domestic
regulations discussed at the OECD and other fora, and elaborated by the
characteristics of E-Commerce.

*This approach avoids the situation in which a particular Member
unilaterally introduces excessive regulatory measures as "disguised trade
barriers" to the Internet world, or in which providers are obliged to cope
with individual Members' numerous and mutually contradictory regulations.

        (1) Transparency -- Each Member shall promptly publish all measures
of general application that are related to or affect E-Commerce at the time
the relevant measure enters into force, except in case of emergency.

        (2) Non-Discriminatory Treatment -- The national treatment and
most-favoured-nation treatment principles shall be applied.

        (3) Avoidance of Unnecessary Trade Restrictions -- In implementing
domestic regulations (e.g. consumer confidence), each Member shall not
utilize trade restrictive regulations that are more burdensome than
necessary. This is especially important for small and medium seized
enterprises in general as well as enterprises in developing economies
because they can provide cross border services and enter the "Global
Marketplace" more easily through E-Commerce. Therefore, to adapt these
measuresavoid unnecessary trade restrictions adapting domestic regulations
to the characteristics of the Internet without harming necessary consumer
protection, Members shall establishfocus on "commercial presence"
requirements, paper document requirements, face-to-face meeting requirements
and person designation requirements for supplying services on the Internet
that may not be justified.

        (4) Use of Internationally Harmonized Rules of Regulations and
Standards -- Domestic regulations and standards shall be based on
market-oriented principles that are internationally harmonized and reflect
market realities to the extent adequate and feasible. Members should also
pay attention to the role of standards to protect consumers and to
facilitate the dissemination of technologies to Members, particularly,
developing ones. Adopting of international rules and standards will have the
effect of increasing predictability for businesses and consumers.

        (5) Recognition of Equivalence of Foreign Regulatory Measures --When
internationally harmonized measures are not possible, necessary, or
desirable, the negative trade effects of cross-country disparities can be
reduced by recognizing the equivalence of trading parties'regulatory
measures or the results of conformity assessment performed in other
countries.


　

3. Creating a Pro-Competitive Environment in E-Commerce Related Market

*E-Commerce poses opportunities in which both small businesses and large
global corporations can conduct business in a world-wide market if we
successfully take balanced steps in the international public policy arena,
thereby mitigating the divide between developed and developing Members. On
the other hand, the failure to take balanced steps could allow this divide
to continue.

*To succeed in mitigating the divide, Members must do more than merely
liberalize domestic regulations. To ensure fair chances for entrepreneurs in
both developed and developing countries to succeed in the E-Commerce related
market, not only the liberalization but also a pro-competitive environment
which prevents the anti-competitive practices of market players shall be
needed. We should take into consideration network effects that could lead to
a dominance or monopoly, the power of which can be abused on a global scale.
Fair participation of developed and developing Members and fair reflection
of developed and developing Members' views are especially important for the
development of global E-Commerce. Pro-competitive environment in E-Commerce
related markets enhances the interests of consumers as well.

*In this context, building upon Article VIII and IX of the GATS, further
discussions are needed about what kind of impact the network effect has on
the development of E-Commerce, taking into account the following issues.

        (1) Access to Essential Facilities -- how to ensure access to and
utilization of essential facilities (tangible and intangible) which are
essential for the supplier/provider to compete in E-Commerce related market,
except where there is justifiable reason for denying access to or
utilization of these facilities.

        (2) Patent related issues -- taking account of the current concerns
over patents for software-implemented business methods, Members shall be
encouraged to discuss international programs which will contribute to
achieving harmonized patent protection for inventions in this technology
area, including build-up of a solid data base of prior art, as well as to
secure a competitive market. In the Okinawa Charter, the G8 welcomes the
joint work already underway among intellectual property authorities and
further encourage its experts to discuss further direction in this area.

        (3) Exclusive Practices in the Cyberspace -- further discussion on
the implications of exclusive business practices on the Internet, and their
adverse impact on E-Commerce related market. Any such discussions shall take
into account technological innovations.

        (4) International Framework for Cooperation -- Members will promote
bilateral, plurilateral or multilateral cooperation programmes to achieve
above mentioned objectives.

        　

4. Cooperation with Relevant International Organizations

*With regard to the formation of international rules, including intellectual
property rights, contract law, electronic signatures and authentication,
consumer protection, jurisdiction and others, E-Commerce issues have been
addressed in other international fora such as WIPO(World Intellectual
Property Organization), UNCITRAL(United Nations Commission on International
Trade Law), the Hague Conference on Private International Laws,
ISO(International Standard Organization) (including COPOLCO(Consumer Policy
Committee), OECD and others. Each forum should continue to work on these
issues as they relate to specific areas of expertise.

*The WTO should pay attention to such work, and consider such work in its
own efforts to address various E-Commerce issues.

*When an international agreement has been made in other international fora,
the WTO should harmonize its own efforts through provisions such as: "When
relevant international rules exist or are to be established in the relevant
international organization, Members should reflect the international rules
when introducing their own domestic laws and regulations."

　

5. Capacity Building of Developing Countries

Members that fails to keep up with the accelerating pace of growth of the
information society will not have the opportunities to participate fully in
the information society and enjoy benefits presented by E-Commerce. Members
should pursue contributions by the WTO to achieve Global eQuality
recognizing the diverse conditions and needs of developing economies.
Emphasis should be made in the following areas.


*Technical cooperation -- Developed Members will undertake technical
cooperation (e.g. setting up the hard and soft infrastructure, human capital
for E-Commerce, trade facilitation) intended to achieve wider use of
E-Commerce in developing Members and share the benefits of global E-Commerce
with developing Members. We highlight the establishment of a global legal
framework for E-Commerce in the WTO.


*Infrastructure requirement -- To enhance the use of E-Commerce, developing
economies should focus on enhancing infrastructure. Assistance from the
international community should be required in development and improvement of
infrastructure for E-Commerce combined with technical cooperation. To pool
intellectual and financial resources the WTO should cooperate closely with
international and regional organizations such as World Bank, ADB(Asian
Development Bank), IDB(Inter-American Development Bank) and UNDP(United
Nations Development Programme).

*Demonstration -- Successful experiences of enhancing E-Commerce in
developing Members shall be presented at the Committee on Trade and
Development for the purpose of sharing information and experiences.


*Policy dialogue -- Members should promote policy dialogue among partners to
facilitate the sharing of information and experience between developing
countries and other partners, and raise the global awareness of the
importance in closing the digital divide.


*International framework for cooperation -- Members should pay attention to
recent developments in APEC(Asia Pacific Economic Cooperation) and other
fora for capacity building in the field of E-Commerce.

　

6. Promotion of Private Sector Initiatives

*Private sector initiatives such as self-regulation to deal with social
issues should be promoted. Self-regulation shall be strengthened through
public policy support.(Co-regulation)

*Governments should pursue this initiative with close dialogue with private
sector-led fora such as GBDe(Global Business Dialogue on e-commerce),
GIIC(Global Information Infrastructure Commission) and consumer groups. The
Okinawa Charter states that the G8 welcomes contributions from the private
sector to the bridging the international digital divide.

*Members should consider a scheme that effectively reflects the views of
industries and consumers in developing economies.

　

7. Other

*Moratorium on Customs Duties -- Members should ensure that the current
moratorium on customs duties on E-Commerce is maintained. Discussions on the
further extension of the moratorium should take place at the 4th Ministerial
Conference.

　

Procedure for discussions


The discussion focusing on Trade Liberalization of E-Commerce Related
Sectors should be included in the on-going service negotiations. We welcome
reinvigoration of the Work Programme on E-Commerce which reflects to the
activities in the four subsidiary bodies. Cross cutting issues which are
related to GATT, GATS, TRIPS, and developmental aspects should be discussed
at a horizontal task force under the auspices of the General Council.

The task force can build upon, not duplicate, the work already done in the
four subsidiary bodies. The outcome of discussions at the task force shall
be input into the service negotiations if necessary. The task force will
help the WTO more effectively to catch up with rapid technological change,
share information and understand broad aspects that traverse all WTO
disciplines in a coherent manner. It will also reduce burdens on the
delegations, particularly, those delegations from developing economies which
now have to attend the four subsidiary bodies. Members should take into
account messages from inter-governmental and inter-industrial fora such as
APEC and GBDe which call for setting up a horizontal task force as soon as
possible.

---Takshi Muramto (CLNN)



  Takshi Muramoto