The Challenges Ahead

6.5 Work Programme on E-Commerce

The current state of play under the GATS discussions is still best summed up by a progress report produced by the GATS Council in 1999 (document S/C/W/8, (1 page, 30KB)). It stated that “while discussion will continue on all of the issues so far considered, Members agreed that some issues would require substantial further study before their implications could be properly understood”. On some other issues, however, discussions had progressed closer towards a common understanding:

• The electronic delivery of services falls within the scope of the GATS, since the Agreement applies to all services regardless of the means by which they are delivered, and electronic delivery can take place under any of the four modes of supply. Measures affecting the electronic delivery of services are measures affecting trade in services and would therefore be covered by GATS obligations.
   
• The technological neutrality of the Agreement would also mean that electronic supply of services is permitted by specific commitments unless the schedule states otherwise.
   
• All GATS provisions, whether relating to general obligations (e.g. MFN, transparency, domestic regulation, competition, payments and transfer, etc.) or specific commitments (Market Access, National Treatment or Additional Commitments), are applicable to the supply of services through electronic means.”
   

The same report identified issues requiring further examination. The focus is on clarifying the application of current GATS provisions in the light of developments in Internet and e-trade in services. Examples are:

• Clarification of the distinction between mode 1 (cross-border) and mode 2 (consumption abroad) in situations where a service is being delivered electronically.
   
• Classification and scheduling of new services that might arise in the context of electronic commerce, and to clarify the classification and improve the scheduling of Internet access and related services.
   
• Further work on the implications of Article VI for domestic regulations affecting electronic commerce.
   
• Clarification of the scope of the Annex on Telecommunications in relation to access to and use of Internet access and other related services and the applicability of the principles contained in the Reference Paper on basic telecommunications to electronic commerce and whether there is a need to develop any additional disciplines under the GATS.
   
• Further study of the application of customs duties on electronic transmissions and, correspondingly, the possible implications of maintaining the moratorium on such duties.
   

In spite of the recognized need for further examination of some details related to GATS coverage and treatment of e-commerce, the services negotiations are proceeding apace. Moreover, they appear to be proceeding under an implicit assumption that e-commerce is an integral part, rather than a separate item, of what is being covered by rule-making and access negotiations.