Opening Remarks, E-Commerce Conference, ITC

Opening Remarks, E-Commerce conference, ITC

31/10/00

• It is a great pleasure to be here with you today. At the WTO we, like everyone else, are facing up to the huge opportunities and challenges that the electronic-commerce revolution brings.

• Although the WTO is increasingly involved with electronic commerce, our responsibility for it is limited and specialised. We are not in the business of regulating the Internet and we never shall be. The huge potential of electronic commerce may be yet stifled by over-regulation and interference by governments. But if that happens, it will be despite, not because of, the WTO.

• The WTO system is a series of agreements between governments. It involves a set of rules, freely negotiated and accepted by a consensus of our member governments, which limit governments' ability to interfere with trade. These rules apply to trade in electronic commerce as they do to other forms of trade. The disciplines that already exist in the WTO system aim to facilitate electronic trade, and that would also be the purpose of any new disciplines that might be negotiated at the WTO.

• The work programme on electronic commerce now in progress at the WTO aims to provide the answers to three questions. First, how do existing WTO agreements impact on e-commerce? Second, are there any weaknesses or omissions in the law which need to be remedied? And third, are there any new issues not now covered by the WTO system on which members want to negotiate new disciplines?

• Among the existing WTO agreements the most relevant to electronic commerce is the GATS, the agreement on trade in services, because it contains the disciplines which guarantee the right to do international business electronically. As far as international trade is concerned, electronic commerce essentially means two things. First, it is an important channel for retailing and wholesaling goods and services. Rights to provide retail and wholesale distribution are covered by the GATS. Second, and probably more important, electronic commerce is the delivery of services direct to the consumer in the form of digitised information. The GATS covers the delivery of services by any means, including electronic. It is obvious that commitments to allow the supply of a service which did not guarantee the ability to supply it electronically would be largely meaningless.

• I spoke just now about the electronic delivery of services in digitised form. I did it deliberately, although I know there is a debate about whether some products, even in electronic form, should rather be classified and treated as goods. The point here is that if governments can agree that some digitised products — computer software, for example — should be classified as goods and that GATT rather than GATS obligations should apply to them, that is fine. But that must not be allowed to create doubt as to whether the electronic delivery of services is covered by GATS. Services are already supplied electronically in vast quantities. The only legal guarantees that such supply will continue to be permitted are in the market-access commitments WTO members have made under the GATS.

• Our work programme is tightly focused and strictly related to trade. We are considering the application of all our disciplines — GATT, GATS and TRIPS, the intellectual property agreement, in particular — to e-commerce. It will consider the extension of the moratorium on import duties on electronic transmissions. Although this is only a political understanding, it is an important symbol of members' commitment not to impede the development of e-commerce.

• But there is another dimension to our work programme that must not be overlooked: the development dimension. The Internet offers new opportunities for people to better their lives: linking distant markets and creating entirely new ones, bringing remote people together and helping people share more information. But we should be under no illusions about its ubiquity. The growth of the Internet can also increase the marginalisation of the world's poor, unless we take steps to ensure they get access to the Internet too.

• Even in the United States, many people do not own a PC and two in five people do not have access to the Internet. The risk for developing countries is that they will be left behind in the Internet economy. It is wonderful that Indian software programmers can work for US companies using the Internet, or that Kenyan farmers can check the price of tea on the Internet. But they are the exception, not the rule. Many people in developing countries can scarcely read, let alone use the Internet. And most of those who are literate do not have access to the Internet.

• Excluding South Africa, there is one Internet host for every 80,000 people in subSaharan Africa. In India, there is one for every 55,000 people. In the United States, there is one for every seven people. This digital divide is much greater than the one in living standards. Without further services liberalisation, this chasm between North and South can only grow.

• One of the purposes of the WTO's work programme is to ensure that developing countries can derive maximum benefit from the technology and are not left behind by the speed of developments. To participate effectively in e-commerce three things are needed.

• The first is access to computers and the other hardware at world prices, which means, among other things, removing excessive import duties on it.

• The second is to have efficient, low-cost telecommunications, which normally means reform and liberalisation of national monopolies. The WTO's Information Technology and Basic Telecoms agreements, both signed in 1997, help promote e-commerce by eliminating duties on computer hardware and liberalising the telecoms services on which the Internet depends. Further telecoms liberalisation is being negotiated in the services negotiations that are now under way. I hope that a second Information Technology agreement that extends the range of hardware that is traded duty-free can be concluded soon.

• The third requirement is to have trained personnel, where the WTO unfortunately can do little to help, but where governments and private industry can do a great deal.

• The Internet is a wonderful thing. We at the WTO aim to do our best to promote rather than hinder its development and to help the poor as well as the rich benefit from it.

Thank you.