Digital Trade priorities: the E-commerce Moratorium

Against a backdrop of challenges and uncertainties, Business AT OECD (BIAC) has set out the OECD's top trade trends by highlighting opportunities in the field of digital trade. Ensuring a permanent moratorium on customs duties on electronic transmissions appears as a priority.

Digital trade - the e-commerce moratorium
Pablo Barrionuevo

Pablo Barrionuevo

Reading time: 5 min

Over the past few years, the multilateral trading system has experienced serious difficulties. Since the COVID-19 crisis, international trade has been threatened by multiple calls for economic nationalism, unilateralism, and protectionism, leading to a decoupling of global value chains. Given the adverse consequences this may have on the standard of living of people around the world, this should be a cause for concern.

An international trade context fraught with challenges

According to the latest WTO trade forecasts published on 5 October, world merchandise trade growth projections in 2023 have been lowered. The volume of world merchandise trade is expected to grow by just 0.8% this year. There is no doubt that these data do not encourage optimism.

That is why, despite the proliferation of bilateral or regional trade agreements and initiatives, which are undoubtedly positive for the parties, it is important to continue to emphasize the value of the multilateral trading system and its fundamental principle of non-discrimination.

Recently, Business At OECD (BIAC) has published the document  Trading better, Living better, in which it sets out the OECD’s trade priorities underlining the OECD business community’s shared vision on trade by offering specific recommendations for both the OECD and governments. The regulatory frameworks that govern international trade must adapt to the realities and business needs of the twenty-first century in many respects.

Digital Trade as an opportunity

 Digital Trade, understood as the trade of goods and services facilitated by digital means, is one of the main trends in International Trade. Worldwide, e-commerce sales were estimated at €3.2 trillion in 2019, with around 1.5 billion people shopping online.

Businesses need policies that promote digital commerce. They should ensure non-discrimination, strengthen transparency, facilitate interoperability, leverage international standards and avoid unnecessary trade restrictions

Innovation involving digitalization and automation continues to change the way global value chains, supply chains, and production networks are organized. There is evidence that  an increase in digital connectivity has an impact on the increase in trade in goods and services. Indeed, digitalization makes it possible to increase efficiency, resilience and opens up new opportunities for new business models.

But in the field of Digital Trade, there are also difficulties that translate fundamentally into the reaffirmation of the potential risk of a fragmentation of the Internet into its different layers, and in the imposition of barriers to the free cross-border flow of data. That is why ensuring a permanent moratorium on customs duties on electronic transmissions must be a priority. Failure to renew the Moratorium would increase legal uncertainty and diminish trade, and tariffs on electronic transmissions would reduce competitiveness. The detrimental effects would be most pronounced in low and middle income countries. In short, the end of the Moratorium would be counterproductive.

Strengthening the OECD’s role in Digital Trade

The OECD’s work on digital trade must remain central to enshrining the principles of opening digital markets. For this reason, it is important to insist on continuing to make progress towards  the conclusion of the WTO negotiations  on the Joint Initiative on electronic commerce, including the revision  of the Telecommunications Reference Paper.

In addition, the OECD’s cross-cutting work and instruments for digital policy, such as data governance and security, will be important to facilitate reliable digital trade and ensure a level playing field in the development of the digital economy.

BIAC members have the responsibility to define the future of digital commerce and its impact on economic growth, sustainable development and jobs. For their part, policymakers need to make better use of the essential role that digital trade plays in the smooth functioning of modern supply chains, promoting innovation, digital trade and data flows.


Communication

Contact our communication department or requests additional material.