Currently, the WTO members are engaged in two e-commerce negotiations, the Joint Initiative and an E-commerce Moratorium
Although the global crypto market is gaining momentum, its classification is still unclear in the World Trade Organisation’s (WTO) e-commerce framework. On Monday, October 30, 2023, the Global Trade Research Initiative (GTRI) called upon the WTO members to give special attention to this matter. The organisation further argues that the debate should revolve around the idea that cryptocurrency exchanges should be classified under ‘electronic transmission’ in e-commerce.
The GTRI Co-founder, Ajay Srivastava, in a report, opines that “Both these negotiations need to factor in cryptocurrencies as the exchange of cryptocurrencies involves digital transmission which qualifies it as e-commerce transaction. Also, cryptocurrencies may soon emerge as an important digital transaction enabler. WTO members must take a view as worldwide adoption of crypto is increasing.”
The report additionally said that the WTO members must reach a unified understanding of cryptocurrencies during the two ongoing negotiations to avoid disputes arising out of varied interpretations. It stresses that the member should prioritise the crypto discussion without further ado.
Currently, the WTO members are engaged in two e-commerce negotiations, the Joint Initiative and an E-commerce Moratorium. Surprisingly, cryptocurrency is not a part of either conversation despite its growing international market. But why is the GTRI pressing the matter?
The report continues to add that cryptocurrency’s inclusion or exclusion will significantly shape future market trends and global digital trade. It also highlights the different standings of influential countries in the crypto market and how their stance will have a far-reaching impact on international e-commerce policies.
Besides the crypto conundrum, the e-commerce negotiations are also facing challenges from the WTO members on several issues. 89 WTO members are currently discussing urgent issues that require immediate attention in the e-commerce space, including paperless trading, customs clearance, online privacy, and cybersecurity. However, all is not harmonious, as on October 25, the US pulled back from several discussed agendas. Being a major player in the global digital, this move by the US may stir a worldwide revaluation of e-commerce policies.
Additionally, India is opposing the e-commerce moratorium set up in 1998, stating it is debilitating the developing countries. Joining India, South Africa is also submitting evidence of the adverse effects of the moratorium on developing countries. They are backed by countries like Indonesia and Sri Lanka. The moratorium was last extended in June 2022 for the next two years.
The United Nations Conference on Trade and Development has pointed out that developing countries are losing out on potential tariffs amounting to USD 10 billion due to the moratorium, whereas the high-income countries are only bearing a loss of USD 289 million. GTRI states that cryptocurrency is only adding to the complexities since the digital currency is operating outside central banks. Therefore, the need for systematic regulations is more pressing than ever.
The outcomes of discussions from both forums will have a profound influence on the e-commerce and digital transaction space. The 13th Ministerial Conference of WTO is scheduled for February 26 to 29, 2024, in Abu Dhabi. It is the highest decision-making body of the WTO.