WTO news: what’s been happening in the WTO


13 March 1998

Study from WTO secretariat highlights potential trade gains from electronic commerce 

A new study, “Electronic Commerce and the Role of the WTO”, from the WTO Secretariat examines the potential trade gains from the rapidly increasing use of the Internet for commercial purposes.  The report, authored by a team of economists from the WTO secretariat, outlines the complexities as well as the potential benefits of trade via the Internet. 

Electronic commerce - the production, advertising, sale and distribution of products via telecommunication networks - can be divided into three broad categories for the purpose of policy discussion: i) the searching stage where producers and consumers, or buyers and sellers, first interact; ii) the ordering and payment stage once a transaction has been agreed upon; and iii) the delivery stage.  Much of the discussion in the study relates to products that can be delivered electronically through the Internet (stage iii) transactions), as this is where the most significant policy questions arise. 

The study was written as a means of providing background information for the 132 WTO Members who are now engaged in the process of developing policy responses to this new form of commerce, which is growing at a staggering rate.  In 1991, there were less than 5 million Internet users.  By the turn of the century, there are likely to be more than 300 million users.  And the value of electronic commerce is predicted to reach US$300 billion by that time.

The study emphasizes the extraordinary expansion of opportunities that electronic commerce offers, including for developing countries.  But it notes that much remains to be done by way of improving access to the necessary infrastructure and user skills if these opportunities are to be realized. 
WTO members have begun to explore how the World Trade Organization should deal with the question of electronic commerce. Given the unique nature of this emerging mode of delivering products (goods and services), the authors say that many questions remain to be answered.  Products which are bought and  paid for over the Internet but are delivered physically would be subject to existing WTO rules on trade in goods.  But the situation is more complicated for products that are delivered as digitalized information over the Internet, as a variety of issues arise relating to the appropriate policy regime. The authors say that both the supply of Internet access services and many of the products delivered over the Internet fall within the ambit of the General Agreement on Trade in Services, but they also acknowledge the need for clarification of how far particular activities are covered by the market access commitments of Members.
Among the policy issues identified in the study are the legal and regulatory framework for Internet transactions, security and privacy questions, taxation, access to the Internet, market access for suppliers over the Internet, trade facilitation, public procurement, intellectual property questions, and regulation of content. The study attempts to lay out the issues without pre-judging which of them should be taken up in the WTO, nor how they should be dealt with substantively. 

Note to Editors

Copies of the study, “Electronic Commerce and the Role of the WTO”, are available in English, French and Spanish (price Sfr 30.-) from WTO Publications, 154 Rue de Lausanne, CH-1211 Geneva 21, tel: (41.22) 739.5208/5308, fax: (41.22) 739.5792.