RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/W/436
6 July 2001
(01-3355)
DEDICATED DISCUSSION ON ELECTRONIC COMMERCE
UNDER THE AUSPICES OF THE
GENERAL COUNCIL ON 15 JUNE 2001
Summary by the Secretariat of the Issues Raised
At the General Council meeting on 8 May 2001, Members agreed to have a dedicated
discussion on e-commerce to address cross-cutting issues.  This dedicated discussion took place on
15 June 2001 under the auspices of the General Council, and was Chaired by Mr. Andrew Stoler,
Deputy Director-General.
The attached list of cross-cutting issues iden tified by delegations at the General Council
meeting in May and in subsequent consultations served as the agenda for the dedicated discussion.
Members also had before them written contributions submitted by MERCOSUR1, Singapore2, Japan3,
and the European Communities.4
At the end of the dedicated discussion, it was agreed that the Secretariat would prepare a
factual report on the discussion under its own responsibility, which would be presented for
information to the General Council at its next meeting on 18 July 2001.  The main views expressed by
delegations in the course of the discussion under each of the cross-cutting issues identified are
summarized below.
1. Classification of the content of certain electronic transmissions
Although it was listed as a sub-issue on the compilation of cross-cutting issues identified by
delegations (see attachment), Members accepted at the outset of the dedicated discussion that the
question of the definition of e-commerce did not need to be addressed in the meeting.  This was due to
the fact that paragraph 1.3 of WT/L/274 (the  Adopted Work Programme on Electronic Commerce)
defines the term for purposes of the work programme as "the production, distribution, marketing sale
or delivery of goods and services by electronic means".  Since it is clear that both goods and services
are sold through e-commerce means, whether a particular transaction involves trade in goods or
services must depend on the product being sold.
• Most delegations highlighted the importance of classification as a cross-cutting issue.
• A number of delegations agreed that a majority of electronically transmitted products
were indeed services.  However, there was still a lack of clarity with regard to the
classification under GATT or GATS of certain products which can be delivered both
in electronic form and on a physical carrier.
                                                     
1 WT/GC/W/434.
2 JOB(01)/55 (26 April 2001) and Suppl. 1 (14 June 2001).
3 JOB(01)/90 (15 June 2001).
4 JOB(01)/85 (14 June 2001).WT/GC/W/436
Page 2
• A number of delegations were of the view that digitized products should all be treated
as services, and thus be subject to the disciplines of the GATS.  One of the mainrationales mentioned for this approach was th e legal certainty it would provide in the
treatment of digitized products.  Some of the proponents of the "GATS approach"
asked other delegations that did not share their view to provide them with concrete
examples of digitized products that should not be considered as services.
• It was suggested that certain products now categorized as goods and enjoying
national treatment and duty-free access under the ITA and GATT should continue to
be given similar treatment if it were agreed that they should be classified as services.
However, other delegations expressed concern about the consistency of such an
approach with the principles on which commitments are scheduled under the GATS.
It was also suggested that it would be pointless to reclassify certain products as
services if GATT disciplines such as unconditional MFN and national treatment andthe prohibition of quantitative restrictions were to continue to apply to them.
• Other delegations noted that a premature determination of the application of GATT or
GATS to the content of certain electronic transmissions, or the adoption of rigid ruleson the matter could create uncertainty and unnecessarily restrict trade.  It was also
noted in this respect that the market for e-commerce was new and still evolving.  Itwas also suggested that the most favourable approach to classification should be the
least trade restrictive one.  Another delegation pointed out that there was currently no
obligation to apply a "least restrictive" standard.
• A number of delegations indicated that they had not reached a clear position on the
question of classification, and were still studying the matter in capitals.  It was noted
in this respect that the implications of classification should be fully considered before
a decision could be taken on this matter.
• With regard to the issues of "likeness" and technological neutrality, it was suggested
by some delegations that the issue of classification should be resolved before these
issues were further considered.  On the issue of "likeness" in particular, a number ofdelegations recalled the wide jurisprudence establishing that a determination of
"likeness" should be done on a case-by-case basis.  With regard to technological
neutrality, one delegation mentioned the need to clarify this concept and its possible
application in the context of the GATT.
• One delegation mentioned that the issue of classification had to be addressed before
the issue of rules of origin could be tackled.
• Most delegations generally agreed that no unnecessary obstacles should be created
that would impede the development of e-commerce.
2. Development-related issues
• All delegations agreed that development was a fundamental issue in the discussion on
e-commerce.  Many delegations recalled the great potential of e-commerce as a toolfor economic growth in developing countries.
• Some delegations made presentations on the use of information technology in their
technical assistance programmes.WT/GC/W/436
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• A number of delegations expressed the view that it could not be assumed that the
benefits of e-commerce would flow automatical ly to developing countries, and that a
comprehensive approach would be necessary to ensure that developing countries
could benefit from e-commerce.  In this respect, technical assistance would not be
sufficient, and measures would have to be taken regarding access to basic
infrastructures and technology, investment, market access, human resources andeducation.  It was also noted that governments had a key role to play in helping to
create an environment favourable to the development of e-commerce through the
elaboration of national strategies and a regulatory/policy framework.
• A delegation recalled that there were a number of negotiating proposals on issues
relating to access to infrastructure and technology before the Council for Trade andServices.
• Many delegations expressed support for the work of the Committee on Trade and
Development (CTD) on e-commerce, and urged the CTD to continue its role ofchannelling information on countries' experiences and best practices in relation to e-
commerce, through the organisation of seminars open to national experts.  It was also
stressed that the WTO, through the CTD, should participate in broader efforts to
narrow the digital divide, building upon the work in other organizations.
• Some delegations were of the view that all the issues identified in the reports of the
CTD as requiring further work should be fully addressed.
• It was mentioned by one delegation that developing countries should be fully
integrated in the development of standa rds on e-commerce in order to ensure that
such standards would not create barriers to entry for developing countries' firms.
• Some delegations expressed concern at the non-availability of certain technologies
for a number of developing countries, including in relation to encryption and the
security of transactions.  In this respect, one delegation mentioned that Article IV of
the GATS had not been fully operationalized.
3. Fiscal implications of e-commerce, Relationship (and possible substitution effects
between e-commerce and traditional forms of commerce and the Imposition of customs
duties on electronic transmissions
• It was noted that some of the questions arising under these items had been partly
subsumed in the previous discussion on classification and development.
• Fiscal implications :  Some delegations were interested in finding out more about the
application by certain Members of internal taxes or other charges to e-commerce.Different views were expressed on the actual impact of e-commerce with regard to
revenue losses for developing countries.  It was noted that the issue of the fiscal
implications of e-commerce warranted further discussion.
• Relationship (and possible substitution effects) between e-commerce and traditional
forms of commerce :  It was noted that the relationship between e-commerce and
traditional forms of commerce should be care fully monitored so as to avoid any short
term disadvantages for developing countries.WT/GC/W/436
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• Imposition of customs duties on electronic transmissions :  It was noted that a deeper
examination of the long-term impact of the moratorium was called for.  Onedelegation mentioned that the cost of collecting tariffs on electronic transmissions
could be prohibitively high.  Some delegations also mentioned that the term
"electronic transmissions" used in the Declaration on Global Electronic Commerce
(20 May 1998) should be clarified.
4. Competition
• No discussion took place under this heading.
5. Jurisdiction and applicable law/ other legal issues
• One delegation referred to the fact that as a general rule, existing WTO rules should
apply to e-commerce, and that any gap should be considered on a case-by-case basis.
• Another delegation expressed the view that this subject exceeded the scope of the
WTO work and was already being considered in other fora.
• It was also noted that not enough information was available on this subject (as well as
on competition) and that there was a lack of understanding on the various aspects
involved.WT/GC/W/436
Page 5
ATTACHMENT
Electronic Commerce:  Cross-Cutting Issues Identified by Delegations
The list below containing cross-cutting issues relevant to electronic commerce has been
prepared on the basis of the discussions at the General Council meeting on 8 May 2001 and at an
informal consultation held on 6 June 2001.
This list is not exhaustive and is intended to serve as a basis for further discussion.  It includes
issues which were raised by numerous delegations, and should not be interpreted as indicating a
consensus amongst Members on them.
1. Classification of the content of certain electronic transmissions
Including:
• definition of "e-commerce";
• concept of technological neutrality;
• issue of "likeness".
2. Development-related issues
Including:
• participation of developing countries in e-commerce;
• access to infrastructure and technology;
• transfer of technology;
• capacity-building;
• technical assistance;
• access to developed and developing countries' markets for developing countries'
producers and suppliers;
• promoting the use of information technology;
• how to ensure that e-commerce benefits developed and developing countries;
• movement of natural persons.
3. Fiscal implications of e-commerce
4. Relationship (and possible substitution effects) between e-commerce and traditional
forms of commerce
5. Imposition of custom duties on electronic transmissions
6. Competition
Including:
• constraints on development of e-commerce due to the concentration of market power;
• competition and domestic regulations;
• competition and intellectual property rights.
7. Jurisdiction and applicable law/ other legal issues
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