India cautions against attempts to formulate e-commerce rules outside WTO framework

India has warned that attempts by developed countries to frame rules on e-commerce outside the World Trade Organization (WTO) framework could undermine the consensus principle at the multilateral body, as there is an existing mandate for similar discussions to take place within the WTO.

In a statement at the informal trade negotiating body meeting at Geneva, India’s WTO ambassador J.S. Deepak said that though proponents are suggesting that these are new pathways and approaches to multilateral agreements, India does not see the advantages of this approach and feels that this would further undermine multilateral work, mandates and the consensus principle.

During the Buenos Aires Ministerial of WTO in December last year, 71 members led by countries like China, Japan and the US in a joint statement said they would initiate exploratory work towards future WTO negotiations on trade-related aspects of electronic commerce.

India plans to bring out a national e-commerce policy in next three months as lack of a domestic policy prevents it from taking a firm stand on the matter at WTO.

South Africa and India in a submission to WTO have proposed that “electronic transmission” under e-commerce be clearly defined as the present moratorium on customs duties on electronic transmissions could imply a loss of competitiveness for developing countries who have higher tariffs on physical products while the same products in digital form attract zero duty.

Deepak said India believes that while e-commerce can bring transformational changes and opportunities in trade and investment, it also poses significant infrastructure, regulatory and other challenges, particularly for developing countries which will not benefit from the opportunity due to the huge digital divide.

India also opposed the introduction of new issues such as investment facilitation and MSMEs (micro, small and medium enterprises) in the WTO agenda till existing mandates have been addressed.

Somewhat miffed with the WTO secretariat for not following a member-driven process while deciding the work programme, Deepak said: “The work of the secretariat should be based on mandates rather than areas for which funds are available. We would not like to see the day where the golden rule in the WTO becomes: one who has the gold, makes the rules! Or even decides the work programme or the areas on which we work!”