ICT Development Index and Disciplines on E-Commerce at the WTO
In 2017, at the World Trade Organization, members have had several exchanges on the issue of E-Commerce and disciplines in this regard. In 1998, members had agreed to a Work Programme on E-Commerce that included various areas that could be explored including interalia having a Development Component as a separate sub-heading. With 4th industrial revolution and the rapid rise of technology it is without doubt that the importance of E-Commerce in the retail sector in relation to trade is significant.
However, in relation to the development on rules on E-Commerce, there needs to be further discussions held in relation to its definition and scope and also whether disciplines on E-Commerce would contribute to global welfare gains or rather impede policy space for development by developing countries. The E-Commerce in relation to the General Agreement on Trade in Services (GATS) can to an extent be discussed under mode 1 commitments of countries under cross-border supply. However, for developing countries in particular small island states and least developed countries, there is immense digital divide that exists among the developed and developing countries.
In order to have a vibrant trade in E-Commerce, Internet access, internet infrastructure and skills related to the utilization of internet are three important components. The main objective of the ICT Development index is to measure (i) the level and evolution over time of ICT developments within countries and the experiences of those countries relative to others; (ii) progress in ICT development in both developed and developing countries (iii) the digital divide, i.e. difference between countries in terms of their levels of ICT development; and (iv) the development potential of ICTs and the extent to which countries can make use of them to enhance growth and development in the context of available capabilities and skills. (www.itu.int)
Using the ICT Development Index from the International Telecommunications Union (ITU), for the period of 2007-2017 of selected developed countries (Australia and New Zealand) and selected developing countries (India, Fiji, South Africa, Malawi, Nigeria, Egypt and Senegal), the table below highlights the difference in the ICT development index between developed and developing countries including the small island states and least developed countries. The data shows that developed countries have achieved a higher ICT development index in comparison to developing countries. In this regard major developing countries such as India, South African and Nigeria are also lagging behind.
Source: ITU database and authors own calculation.
Policy Recommendation
From the preliminary analysis using the ICT Development index, it is evident that developing rules of E-Commerce at the WTO multilaterals would only benefit the selected countries that have a higher ICT development index. Most developed countries have a higher ICT development index. As a result, there would be greater inequity through digital divide with constrained policy space for development of the developing countries at large. The most affected amongst these would be small states and LDCs. Given the differences in the ICT development index, if a rule is set on E-Commerce at the multilateral level, , there is greater tendency that the market share and market access benefits will be favoured towards the developed countries only. The members of WTO need to consider the development dimension of E-Commerce. In other words providing with technical and financial assistance to develop (i) Internet related infrastructure, (ii) internet accessibility (iii) internet skills and capacity for productive sector growth, prior to any rule setting or disciplines at the World Trade Organization at the multilateral level on E-Commerce regulations.
However, in relation to the development on rules on E-Commerce, there needs to be further discussions held in relation to its definition and scope and also whether disciplines on E-Commerce would contribute to global welfare gains or rather impede policy space for development by developing countries. The E-Commerce in relation to the General Agreement on Trade in Services (GATS) can to an extent be discussed under mode 1 commitments of countries under cross-border supply. However, for developing countries in particular small island states and least developed countries, there is immense digital divide that exists among the developed and developing countries.
In order to have a vibrant trade in E-Commerce, Internet access, internet infrastructure and skills related to the utilization of internet are three important components. The main objective of the ICT Development index is to measure (i) the level and evolution over time of ICT developments within countries and the experiences of those countries relative to others; (ii) progress in ICT development in both developed and developing countries (iii) the digital divide, i.e. difference between countries in terms of their levels of ICT development; and (iv) the development potential of ICTs and the extent to which countries can make use of them to enhance growth and development in the context of available capabilities and skills. (www.itu.int)
Using the ICT Development Index from the International Telecommunications Union (ITU), for the period of 2007-2017 of selected developed countries (Australia and New Zealand) and selected developing countries (India, Fiji, South Africa, Malawi, Nigeria, Egypt and Senegal), the table below highlights the difference in the ICT development index between developed and developing countries including the small island states and least developed countries. The data shows that developed countries have achieved a higher ICT development index in comparison to developing countries. In this regard major developing countries such as India, South African and Nigeria are also lagging behind.
Source: ITU database and authors own calculation.
Policy Recommendation
From the preliminary analysis using the ICT Development index, it is evident that developing rules of E-Commerce at the WTO multilaterals would only benefit the selected countries that have a higher ICT development index. Most developed countries have a higher ICT development index. As a result, there would be greater inequity through digital divide with constrained policy space for development of the developing countries at large. The most affected amongst these would be small states and LDCs. Given the differences in the ICT development index, if a rule is set on E-Commerce at the multilateral level, , there is greater tendency that the market share and market access benefits will be favoured towards the developed countries only. The members of WTO need to consider the development dimension of E-Commerce. In other words providing with technical and financial assistance to develop (i) Internet related infrastructure, (ii) internet accessibility (iii) internet skills and capacity for productive sector growth, prior to any rule setting or disciplines at the World Trade Organization at the multilateral level on E-Commerce regulations.
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