Quick Win No. 2
Promote the use of international standards in digital trade
During the COVID-19 crisis, many firms rapidly adopted and implemented different e-commerce strategies to ensure their survival. Customs departments also increased the use of digital technologies, promoting paperless trade to ensure the flow of essential goods, especially those related to health, food, and medicines. The United Nations Conference on Trade and Development reports that in 2020, the share of online retail sales as a percentage of total retail sales grew from 16% to 19%, and e-commerce sales rose 4% between 2018 and 2019, representing $26.7 trillion dollars, or 30% of global GDP.
As the global economy shifts toward a world led by digital trade, institutions must provide the necessary rules so that the ever-increasing opportunities brought about by e-commerce can materialize. This transition presents dangers and can ultimately hamper digital trade-led growth if each country or regional trading block designs its own rules without care for coordination or convergence with other trading partners at the multilateral level. Importantly, new and evolving initiatives promoting the adoption of international standards have been announced by both private and intergovernmental institutions, such as the International Chamber of Commerce, the World Customs Organization on Cross Border E-commerce and Data Model, the WTO and the World Economic Forum.
The WTO Trade Facilitation Agreement also promotes the general adoption of international standards, encouraging members to use them as a foundation for their import, export, or transit formalities and procedures. Some regional agreements also promote the use of international standards targeted at objectives, including the adoption of national legislation to permit cross-border paperless trade. However, regulatory fragmentation, interoperability of different data models, lack of recognition and trust in electronic transferable records, among others, still pose challenges that can hinder these benefits.
To this end, e-commerce can certainly contribute to trade facilitation and enable multiple positive outcomes such as the reduction of costs, lead times and environmental impacts. There has been significant progress on the acceptance of trade-related e-documents including: IATA e-Air Waybills for airfreight, which are expected to reach 100% adoption by the end of 2022; e-bills of lading for maritime transportation, although only 1.2% of the bills of lading issued in 2021 were digital; and e-certificates of origin (e-COs).
Although several success stories have been noted, uncertainty remains when it comes to the legality of these e-documents. This is due either to the lack of domestic legislation recognizing the use of trade related e-documents or the lack of compatibility across paperless trading systems. Similarly, global alignment could also be achieved on trust services once the draft of the UNCITRAL Model Law on the Use and Cross-border Recognition of Identity Management and Trust Services is available for adoption.
Therefore, we call on the WTO to adopt strong commitments in the e-commerce negotiations, including paperless trading systems and e-transactions, to ensure that members increasingly use international frameworks such as the UNCITRAL Model Law on Electronic Transferable Records and the UNCITRAL Model Law on the Use and Cross-border Recognition of Identity Management and Trust Services. Such a commitment will broaden the implementation and benefits already demonstrated by successful practices already in use, especially if partnered with increased capacity building and technical assistance commitments to help developing and least developed countries. Moreover, the adoption of legal frameworks consistent with the model laws, would best reflect international standards and build on the principles of non-discrimination for the use of electronic means, functional equivalence, and technological neutrality.