ELECTRONIC COMMERCE

The declaration setting up the work programme included the statement that “Members will continue their current practice of not imposing customs duties on electronic commerce”. A work programme on electronic commerce was adopted by the General Council on 25 September 1998 under which issues related to electronic commerce would be examined by the Council for Trade in Services, the Council for Trade in Goods, the Council for TRIPS and the Committee on Trade and Development.

Each of these bodies produced a report for the General Council at the end of July 1999. The following is a summary of the main points which emerge from the reports to the General Council:

• WTO Members Governments identified three types of transactions on the Internet:
  • Transactions for a service which is completed entirely on the Internet from selection to purchase and delivery.
  • Transactions involving “distribution services” in which a product, whether a good or a service, is selected and purchased on-line but delivered by conventional means.
  • Transactions involving the telecommunication transport function, including provision of Internet services.
• The general view of Member Governments of the WTO is that the vast majority of transactions on the Internet are services which are covered by the General Agreement on Trade in Services (GATS).
• WTO Member Governments hold the general view that the GATS does not distinguish between technological means of delivery.
• The general view of Member Governments is that all the provisions of the GATS apply to trade in services through electronic means.
• There is a disagreement on the classification of a small number of products made available on the Internet, as to whether or not they are services or goods. This disagreement is on products such as books and software. Whereas a printed book delivered through conventional means is classified as a good, there are Member Governments of the WTO who hold the view that the digital version of the text of such a book is a service which should be covered by the GATS. Other Member Governments hold the view that such a product remains a good which is subject to customs duties and other provisions of the GATT Agreement. There are also those who think that such a product constitutes a third category of products which are neither goods nor services and for which special provisions need to be devised.
• Questions are raised about how the Telecommunications annex of the GATS should relate to access to and use of Internet access services. Many Internet service providers (ISPs) and services may benefit from the Annex provisions ensuring fair and reasonable access to the leased circuits they obtain from pubic telecom operators. But some Member Governments wonder if, or to what extent, ISPs themselves should be obliged by the Annex to offer such access to others.

Reports to the General Council by the Council for Trade in Services, the Council for Trade in Goods, the Council for TRIPS and the Committee on Trade and Development are available from the “Electronic Commerce” section of the website.