WORLD TRADE
ORGANIZATIONWT/GC/W/434
7 May 2001
(01-2323)
Original:  Spanish
ELECTRONIC COMMERCE
HORIZONTAL AND SECTORAL ISSUES WHICH REQUIRE FURTHER ANALYSIS
Communication from MERCOSUR
(Argentina, Brazil, Paraguay, Uruguay)
The following communication, dated 30 April 2001, on Electronic Commerce has been
received from the Permanent Mission of Paraguay on behalf of the MERCOSUR member States with
the request that it be circulated to Members for discussion at the General Council meeting on
8 May 2001.
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WORK PROGRAMME ON ELECTRONIC COMMERCE
Horizontal and Sectoral Issues which Require Further Analysis
Communication from MERCOSUR
(Argentina, Brazil, Paraguay, Uruguay)
1. The States Parties to MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) are submitting
this document as a contribution to the Work Programme on Electronic Commerce.  It does not
prejudge the final position of MERCOSUR or of its States Parties with respect to any of the issues
raised.
Work Programme:  Sectoral and horizontal issues
2. The Work Programme has been progressing satisfactorily over the last two years, enabling
Members to consider various aspects of electronic commerce and begin examining the relevance and
applicability of WTO disciplines.
3. The work of the four subsidiary bodies has brought to light two categories of issues:
− Sectoral issues or issues that are specific ally related to trade in services, trade in
goods, and intellectual property matters or economic development matters;
− cross-sectoral or horizontal issues.
4. While the former category continues to be addressed by the specific subsidiary bodies
(Council for Trade in Services, Council for Trade in Goods, Council for Trade-Related Aspects of
Intellectual Property Rights and Committee on Trade and Development), clearly the horizontal issues,
by their nature, go beyond the sectoral context and must be treated accordingly in the General
Council, as acknowledged in paragraph 1.2 of the Work Programme.WT/GC/W/434
Page 2
5. Furthermore, many of the aspects of electronic commerce under discussion in the subsidiary
bodies can only be meaningfully addressed once a determination has been made if, and under what
circumstances, the content of certain electronic transmissions can be considered as services, goods or
something else.  This issue of the classification of the different products has been identified almost
unanimously as a horizontal issue, probably the main one, although not necessarily the only one.  Atthe same time, there are issues that are of the utmost importance at the sectoral level, above all with
respect to trade in services, whose examination must continue in order to reach a satisfactory solution.
6. However, in spite of the fact that all Members are aware of the existence of two categories of
issues – sectoral and horizontal – the discussion has focused lately on matters of procedure to the
detriment of the substantive issues.  Thus, the attention devoted to the possible creation of an
additional body to address horizontal issues has led to the virtual paralysis of the Work Programme,
even at the level of the sectoral subsidiary bodies.
7. Thus, it is essential that Members continue to follow the Work Programme at the sectoral
level in the relevant subsidiary bodies with respect to pending issues, and at the horizontal level in the
General Council, in conformity with the Declaration on Global Electronic Commerce adopted in
Geneva on 20 May 1998 at the second WTO Ministerial Conference (document
WT/MIN/(98)/DEC/2), and the Work Programme on Electronic Commerce adopted by the General
Council on 25 September 1998 (document WT/L/274).  An examination of the activities of the
subsidiary bodies thus far will provide an idea of the magnitude of what remains to be done.
8. In the light of the reports submitted by the subsidiary bodies
1, the issues could be categorized
as indicated below2 (for reference purposes, the relevant paragraph numbers of the latest reports of the
different subsidiary bodies is provided in brackets).
Sectoral issues:
A. SERVICES
(a) Scope of the GATS with respect to the electronic delivery of services, in particular
the issues relating to the so-called concept of technological neutrality of the
Agreement and the distinction between modes of supply 1 and 2 (paragraphs 4 and5 of document S/L/74);
(b) the issue of likeness, both in the context of the MFN principle and in the context of
national treatment (paragraphs 8 and 18 of document S/L/74);
(c) issues relating to domestic regulations in the context of Article VI.4 of the GATS
(paragraph 11 of document S/L/74);
(d) technical barriers to trade (in the context of services) faced by the developing
countries in foreign markets (paragraph 11 of document S/L/74);
                                                     
1 Council for Trade in Services (S/CE/13 AND S/L/74) Council for Trade in Goods (G/L/421 and
G/C/W/158), Council for TRIPS (IP/C/18 and IP/C/20) and Committee on Trade and Development(WT/COMTD/19 and WT/COMTD/26).
2 The list set forth in this paragraph does not constitute a legal document.  Its submission does not
prejudge MERCOSUR's position, nor that of its States Parties with respect to any of the issues identified or withrespect to the question of whether or not some of them should be addressed in the context of this Work
Programme.WT/GC/W/434
Page 3
(e) access to distribution channels and information networks, including the Internet
(paragraph 13 of document S/L/74);
(f) clarification of the issue of the scope of specific commitments on Internet access
networks and services (paragraph 16 of S/L/74);
(g) examination of the issue of access to and use of public telecommunications transport
networks and services under the GATS Annex on Telecommunications (paragraph 20
of S/L/74).
B. GOODS
(a) Market access for and access to products related to electronic commerce in the
importing countries (Section 3 of document G/C/W/158);
(b) Most aspects of electronic commerce delegated to the Council for Trade in Goods for
discussion can only be meaningfully addressed once the question of the classificationof the content of certain electronic transmissions has been solved (paragraph 4 of
document G/L/421 and paragraph 11 of document G/C/W/158).  These issues include
the following:
(i) Valuation issues (Section 6 of document G/C/W/158);
(ii) applicability of rules of origin in an electronic trade environment
(Section 7 of document G/C/W/158);
(iii) technical barriers relating to electronic commerce (standards and technical
regulations) in respect of trade in goods (Section 8 of document G/C/W/158);
(iv) paragraph 4 of the latest Report by the Chairman of the Council for Trade in
Goods to the General Council of December 2000.
C. 
INTELLECTUAL PROPERTY
(a) Issue of the so-called concept of technolo gical neutrality of the TRIPS Agreement
(paragraph 4 of document IP/C/18);
(b) continued consideration of developments in this area, in particular the work being
done by WIPO (document IP/C/18 in general, and in particular paragraph 12 thereof;paragraph 35 of document WT/COMTD/19).
D. 
TRADE AND DEVELOPMENT3
(a) Human resources development in the developing countries (paragraph 24 of
document WT/COMTD/19);
                                                     
3 Some of the issues addressed by the Committee on Trade and Development as well as those identified
as requiring further analysis (Section E of document WT/COMTD/19) are by their nature horizontal (e.g. fiscalimpact of electronic trade – paragraph 33 of document WT/COMTD/19) or overlap with the work of othersubsidiary bodies (e.g. the effects of electronic commerce on modes of supply 3 and 4 of the GATS –paragraph 27 of document WT/COMTD/19;  or prot ection of domain names – paragraph 35 of document
WT/COMTD/19).WT/GC/W/434
Page 4
(b) infrastructure development (paragraph 25 of document WT/COMTD/19);
(c) participation of developing country enterprises in electronic commerce (paragraphs
28 and 29 of document WT/COMTD/19);  and
(d) report of the Committee on Trade and Development of 13 November 2000 (document
WT/COMTD/26).
Horizontal issues:
(a) Questions relating to the classification of the content of certain electronic
transmissions (paragraphs 6, 24, 25 and 26 of document S/L/74;  Sections 2 and 5 of
document G/C/W/158;  and para graph 4 of document G/L/421);
(b) relationship (and possible substitution effects) between traditional forms of commerce
and electronic commerce (paragraph 30 of document WT/COMTD/19);
(c) questions relating to development (including, inter alia , technical assistance.
Paragraph 10 of S/L/74 and paragraph 26 of document WT/COMTD/19).
9. Clearly, in many cases, for example in the case of issues relating to trade in services, the
sectoral issues may continue to be discussed even if no agreement has been reached on the
classification of the content of certain electronic transmissions.  In other cases, for example the
examination taking place in the Council for Trade in Goods, the satisfactory resolution of manyquestions depends on the prior settlement of the issue of classification.
10. MERCOSUR's objective is to continue to fo llow the Work Programme as efficiently as
possible.  We hope that this document will serve to promote the discussion and to put the Work
Programme back on the tracks, both at the sectoral and horizontal levels.
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