RESTRICTED
WORLD TRADE WT/GC/W/86
23April 1998
ORGANIZATION(98-1670)
Original: English
GLOBAL ELECTRONIC COMMERCE
Communication from Australia
Thefollowing communication containing adiscussion paper hasbeenreceived on23April 1998
from thePermanent Mission ofAustralia.
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1. Australia welcomes theinitiatives bytheUnited States intheGeneral Council andEgypt in
theCommittee onTrade andDevelopment topromote theconsideration ofissues associated with
electronic commerce intheWTO. Forthereasons setoutbelow, Australia believes thatitisvery
important thatWTO Members givefullconsideration tothemany, complex trade-related issues arising
outoftheemergence ofelectronic commerce. Australia believes thatthisprocess ofconsideration
willinvolve anumber ofaspects. Asafirststep,Australia hassupported theproposal fromtheUnited
States toallow goods ordered anddelivered electronically through theInternet tocontinue toenter
dutyfree. Theproposal isconsistent withAustralian government policy andwebelieve thatthere
areimportant reasons whytheadoption oftheproposal would beintheinterests ofallMembers.
Australia alsoplaces highpriority onabroader process ofinformation exchange andanalysis onissues
related toelectronic commerce anditsimpact onthemultilateral trading system being conducted in
theWTO.
Theemergence ofelectronic commerce
2. Internet-based electronic commerce, stillinitsinfancy, issettoburgeon overthenextfew
years andtransform thewayworld tradeisconducted. By2000, theglobal value ofgoods andservices
transacted overtheInternet isconservatively predicted tobearound US$100 billion peryear.Currently
thevalue isaround $3billion peryear.1Therapidprojected growth inelectronic commerce isafunction
ofmany factors, oneofwhich isthecontinuing worldwide surge inthenumber ofInternet users. The
current number of67.5million users oftheInternet worldwide isconservatively estimated toincrease
toaround 170million by2000. Thehighest ratesofgrowth inInternet useareexpected tooccur in
developing Asian countries.2Growing confidence intheInternet asamedium fortrade asproblems
likeprivacy andthesecurity ofon-line transactions areaddressed andtheincreasing convergence of
electronic commerce technologies around theInternet arealsofactors contributing totherapid growth
ofelectronic commerce.
1"Putting Australia ontheNew SilkRoad: theroleoftrade policy inadvancing electronic commerce",
Department ofForeign Affairs andTrade, Canberra, Australia.
2Internet Research Information Services, IRIS Update, 1997 (various issues), web site:
http://iris.consultco.com:90/news.html andForrester Research, TheForrester Report ,1997 (various issues),
website:http://access.forrester.com/index, cited from "Putting Australia ontheNew SilkRoad", id.WT/GC/W/86
Page2
3. On-line commerce isexpected tocreate significant opportunities forfirms byproviding access
toamuch wider international market andamechanism toincrease exports which will,inmany instances,
bemoreefficient andcost-effective thancurrent business practice. Based oncurrent estimates, by2000,
firms withgoods andservices abletobeordered anddelivered ontheInternet could haveapotential
market ofupto170million people, residing inadiverse array ofcountries. While thecostofacquiring
access tothese consumers byconventional means suchastheestablishment ofaphysical commercial
presence would inmany cases beprohibitive, withaccess tothenecessary hardware andsoftware,
thecreation ofawebsite makes information onproducts andmeans oforder anddelivery immediately
available toaworldwide market.
4. Consumers alsostand tomake significant gains fromtheriseofelectronic commerce asatrade
medium. Asthetypeandquantity ofgoods available ontheInternet increases, consumers willbenefit
from aneasily accessible, diverse range ofproducts which canbepurchased with minimum
inconvenience. Theincreased accessibility ofinformation willalsoprovide ameans bywhich individuals
cankeepthemselves better informed andeducated.
5. Driven bymarket forces, electronic commerce istherefore settoleadtomany changes inthe
conduct ofeconomic activity and,ofparticular importance toWTO Members, toplayanincreasingly
important roleintheconduct ofinternational trade. WTO Members cannot afford toignore thepotential
benefits ofparticipation byprivate firms andconsumers inelectronic commerce. Access byfirms to
aworldwide market islikely togenerate exports andeconomic growth, which would inturncreate
netemployment gainsinproduct andservice sectors. These effects would contribute positively tooverall
wealth andstandards ofliving.
Theneedtobeinvolved
6. Given theinexorable movement towards greater useofelectronic commerce, itisimportant
forcountries toconsider nowhowbesttoposition themselves tocapture thebenefits fromthistrend.
Australia believes thatitisimportant forallWTO Members toparticipate intheestablishment ofan
environment thatsupports thedevelopment andadoption ofelectronic commerce, bothatthedomestic
andinternational levels, andwhich takesintoaccount theneeds andinterests ofallparticipants. Without
suchacommitment, theprospects fornational producers andconsumers toparticipate fullyeither now
orinthefuture, intheemerging opportunities could beimpaired. Thisargument isequally applicable
todeveloping countries which mustensure thatastheireconomies become progressively on-line, there
isinplace anenvironment which facilitates theirincreasing participation. Inother words, failure now
tobecome engaged could result ingreater disadvantage inthelonger-term.
7. Thecreation ofthisenabling environment willhavemany facets. Forexample, ensuring fair
andequitable access totelecommunication services willbeanecessary stepinbuilding anddeveloping
communication infrastructures forelectronic commerce.3This mayinvolve, forexample, the
implementationofpoliciestosecureadequateinvestmentinkeyindustriessuchasinformationtechnology
andtelecommunications, including through theliberalisation andderegulation ofthesemarkets. Policies
toensure adequate levels ofcomputer literacy willalsobeveryimportant. Inrecognition oftheglobal
andtransfrontier nature ofthenewnetworks andcommunication systems, thereisalsoapressing need
toestablish acoherent, predictable, legalandregulatory framework.4Thiswillbeessential forensuring
thattheinterests ofstakeholders areadequately protected andthattheycantherefore participate in
thesystem ofelectronic commerce withconfidence. Thedevelopment ofthisframework isalready
3"Overview ofOECD Work Bearing onElectronic Commerce", OECD Doc. DSTI/ICCP(97)3/REV1, 15
July1997, 11.
4Id,4.WT/GC/W/86
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underway inarange ofinternational forums andasaresult ofdomestic policy initiatives inmany
countries.
RoleoftheWTO
8. TheWTO willalsohavearoletoplayinestablishing thisenvironment. Given thelikely
significance ofelectronic commerce totheconduct ofinternational tradeitwillbeimportant toensure
thatthemultilateral trading system underpins thedevelopment ofelectronic commerce andfacilitates
fullandfairparticipation byallcountries. Australia believes thattheproposal toallow goods ordered
anddelivered electronically through theInternet tocontinue toenter dutyfreewould constitute an
important firststeptowards achieving thisgoalbyensuring thatallproducers andconsumers ofthese
products areabletoparticipate inthisformofcommerce onfreeandequal terms. Moreover, ashas
been argued previously, theadoption oftheproposal would merely reflect current administrative
arrangements given thatnocountry has,atthistime, thetechnology which would allow theinterception
ofelectronic transmissions forthepurpose oftheimposition ofduties. WTO Members therefore have
anopportunity toreadily lockinanagreement nownottocreate barriers tothisaspect oftrade on
theInternet.
9. Australia alsoplaces highpriority onWTO Members conducting abroad examination ofall
thetrade-related issues arising from theemergence ofelectronic commerce. Inparticular, Australia
believes thatthorough consideration should begiven towhether there isaneedtodevelop modified
ornewrules inanyoftheWTO Agreements todealwiththeimpact ofelectronic commerce on
international trade andtoensure equality ofcompetitive opportunities. Forexample, theincreasing
useofelectronic commerce anddelivery byelectronic means canbeexpected tohaveamajor impact
oninternational trade inservices through theexpansion ofthescope forthecross-border supply of
services inarange ofsectors. Byreducing theneedforsuppliers toestablish costly commercial
presences toeffectively compete inoverseas services markets, electronic commerce canbeexpected
tocontribute toanoverall increase ininternational trade inservices.
10. WTO Members could therefore giveconsideration tothecontribution thattheGATS should
make inestablishing aninternational framework fortheconduct ofelectronic commerce. Many of
thepolicy challenges arising from electronic commerce thatarecurrently capturing theattention of
policy makers atboththedomestic andinternational levels areaddressed under various GATS Articles.
Forexample, thereareprovisions intheGATS dealing withthedisclosure ofconfidential information,
domestic regulation including prudential mechanisms, payments andtransfers, deceptive andfraudulent
practices, privacy andtaxation. Theapproach taken intheGATS istoestablish broadly applicable
disciplines thathavetheobjective ofensuring freeandfairtrade. Thequestion thatMembers may
wishtoconsider iswhether these rulesareadequate tounderpin thedevelopments intrade inservices
arising from theincreased useofelectronic commerce orwhether there isaneedtodevelop newor
modified rules.
11. Similar issues arelikely toarise withother WTO Agreements including, forexample, the
Agreement onTrade-Related Aspects ofIntellectual Property Rights. Australia believes thatthepaper
bytheSecretariat onelectronic commerce andtheroleoftheWTO willform averygood basis on
which toprogress consideration ofthese issues.
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