Canada’s Future World Trade Organization (WTO) Negotiations on E-Commerce

Backgrounder

What is e-commerce?

Electronic commerce, or e-commerce, is the production, distribution, marketing and/or sale of goods and services by electronic means.^{Footnote 1} E-commerce first became possible in 1991 when the Internet was opened to commercial use. The development in the 1990s of web-based search engines, security and application protocols, and the introduction of broadband Internet access further contributed to the advancement of e-commerce. Today, e-commerce forms an integral part of the daily experiences of businesses and consumers across the global economy as innovative information technologies (e.g. cloud computing) eliminate distances between commercial suppliers and their customers.

E-commerce has emerged as an alternative and increasingly widespread platform for doing business across all sectors of the economy—and by extension for conducting international trade. E-commerce can cover everything from the purchase and sale of merchandise goods through online retailers to the purchase and sale of digital products^{Footnote 2} through online platforms (e.g. mobile applications, or apps), the marketing of a company’s goods and services online (e.g. advertising on websites and social media platforms), telecommunications services that electronically deliver digital products, the distribution and transportation networks that move merchandise goods purchased online, or other trade in goods or services facilitated by electronic means (e.g. architectural building designs).

E-commerce at the WTO

E-commerce was first discussed at the World Trade Organization (WTO) in 1998, when the WTO’s second Ministerial Conference directed the WTO General Council to establish a comprehensive work program to consider the trade-related issues related to global e-commerce. A second outcome of this conference was that ministers agreed to continue not imposing customs duties on electronic transmissions for the next two years, subject to further consideration at the third Ministerial Conference. This became known as the moratorium on e-commerce and has been extended for two-year periods at each subsequent Ministerial Conference. For more information, see the WTO Work Programme on Electronic Commerce.

Since 1998, the Work Programme on Electronic Commerce has continued to examine a variety of trade-related aspects of e-commerce as the digital economy has grown. However, aside from the moratorium on e-commerce, which has been extended every two years, WTO members have been unable to reach consensus on any lasting commitments in this area.

Consequently, at the WTO’s 11th Ministerial Conference in December 2017, a group of members, including Canada, issued a joint statement (WT/MIN(17)/60), agreeing to hold plurilateral exploratory discussions on e-commerce in an effort to reach an outcome at the WTO. In March 2018, the first exploratory discussions were held and were open to any WTO member who wished to attend or participate. In addition to those members who signed onto the joint statement, over 80 members have now participated in the exploratory discussions, demonstrating the interest of members in this area.

In March 2018, the first exploratory discussions were held and were open to any WTO member who wished to attend or participate. In addition to those members who signed onto the joint statement, over 80 members have now participated in the exploratory discussions, demonstrating the interest of members in this area.

The key areas that members have suggested could be explored further as a basis for negotiations at the WTO can be classified under the following themes:

• customs and trade facilitation
• customs duties on electronic transmissions
• market access (e.g. goods and services)
• flow of information across borders
• access and non-discrimination
• business trust
• consumer trust
• intellectual property
• transparency
• infrastructure gaps and the digital divide
• cooperation

Canada has included commitments in the electronic commerce chapters of its comprehensive free trade agreements relating to most of these themes, and sees benefit in discussing these issues in a broader WTO context. While the scope of future negotiations has yet to be determined, as well as timing for a potential launch of negotiations, Canada is conducting these consultations at this early stage in order to better understand the types of e-commerce commitments Canadians would like to see achieved at the WTO.

Furthermore, in terms of participation, while negotiations involving all WTO membership would be the preferred scenario to ensure the most comprehensive and inclusive outcome, current dynamics suggest that a possible future WTO negotiation on e-commerce would more likely be a plurilateral initiative, involving a subset of WTO members (i.e. similar to the 1996 WTO Information Technology Agreement and its 2015 expansion).

Most recently, on January 25, 2019 a subset of like-minded WTO members,   announced an intention to launch negotiations on e-commerce as stated in the joint communique (link to follow).