Proposed E-Commerce Agreement Text Released at the WTO: Key Provisions and Next Steps5 August 2024

For the past five years, over 90 World Trade Organization (“WTO”) Members have been negotiating a so-called ‘plurilateral agreement’ on electronic commerce under the auspices of the Joint Statement Initiative on Electronic Commerce (“E-Commerce JSI”). On 28 July 2024, the three co-convenors of the E-Commerce JSI – Australia, Singapore and Japan – announced that the participants have agreed a “stabilised text” in the negotiations, titled the Agreement on Electronic Commerce.

The finalisation of E-Commerce JSI is a momentous step for the WTO, showing the ability of plurilateral initiatives to continue to drive new global trade rules even as the WTO more generally grapples with serious obstacles to its effective functioning. The stabilised text is also a clear win for business and consumers, and once implemented will help to set clear and consistent global rules and norms around digital trade.

However, there are serious hurdles to bringing the stabilised text into force as a legally binding agreement under the auspices of the WTO. Overcoming these will be the key focus of E-Commerce JSI participants in the coming months.

What’s in the proposed Agreement?

The proposed Agreement on Electronic Commerce (the “Agreement”) contains a mix of binding rules and best endeavours provisions aimed at encouraging electronic commerce and using technology to facilitate traditional trade.

Its key provisions include commitments by the participants to:

• not impose customs duties on electronic transmissions;
• endeavour to adopt laws consistent with the UNCITRAL Model Law on Electronic Commerce and UNCITRAL Model Law on Electronic Transferable Records;
• allow for the use of electronic signatures and for private parties to determine the appropriate form of electronic authentication or signature for their transaction;
• make customs forms electronically available and accept their electronic submission;
• endeavour to make public government data more accessible and available with fewer restrictions;
• adopt consumer protection measures, including to prevent misleading and deceptive conduct associated with electronic commerce;
• regulate spam or unsolicited commercial electronic messages; and
• adopt measures to protect the personal data of users.

The commitment to not impose customs duties on electronic transmissions is a particular highlight of the proposed Agreement, which has been sought after by business and would provide valuable certainty to digital trade flows. Unfortunately, participants were not able to agree to rules on cross-border data flows and data localisation measures. Although this is not a surprise given recent changes in policy from the United States, and the particular sensitivity associated with these rules.

The proposed Agreement also contains specific provisions on development and commitments to help bridge the digital divide. This includes by providing developing and least developed countries with transition periods for provisions of the Agreement they require more time to implement, and also through technical assistance and capacity building.

What are the next steps for the proposed Agreement?

Whilst the proposed Agreement text is now “stabilised” it is still a long way from being a legally binding agreement. Some elements – such as requirements around its entry into force – are also square-bracketed and still need to be resolved.

Participants have said they are currently undertaking their domestic processes on the basis of the stabilised text, with the aiming of integrating it into the WTO’s overall legal framework. This process faces significant hurdles given the clearest route for integrating the proposed Agreement requires consensus from all WTO Members. A minority of WTO Members (led predominantly by India and South Africa) have strongly opposed the legitimacy of these plurilateral negotiations and their incorporation into the WTO. Participants thus face a difficult task in obtaining consensus or crafting an alternative route for implementing the proposed Agreement. They also will be working to have other WTO Members join the E-Commerce JSI, and to maintain the existing participants (nine current participants were not yet willing to support the stabilised text, including Brazil, Indonesia and the United States).

Conclusion

The stabilisation of the text of a proposed Agreement by the E-Commerce JSI is a significant achievement for both the WTO and global trade. A global agreement on digital trade issues would help to reduce uncertainty and improve consistency in the regulation of cross-border digital trade, and also make physical trade more efficient. Whilst there are significant hurdles to the implementation of the proposed Agreement on E-Commerce, participants have a range of legal options available to them. Finding a path forward will be crucial to realising the potential of this proposed Agreement.

In this context, for industry looking to benefit from these rules, continued support for the adoption of the Agreement will be critical. Expert advice can also help businesses understand the full implications of the text for them. For governments, advice on the various options for implementation can assist in finding the most appropriate path forward and ensuring that their key policy priorities are protected. WFW has established digital trade and WTO negotiation expertise. If you have any questions on the proposed Agreement, please contact the authors.