EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

On 13 December 2017, at the Eleventh Ministerial Conference of the World Trade Organisation (WTO), 70 WTO Members adopted a Joint Statement on Electronic Commerce to initiate exploratory work towards future WTO negotiations on trade-related aspects of electronic commerce.

The European Union (EU) strongly supported the exploratory work that was carried out during 2018 in the WTO. The exploratory work was transparent and open to all WTO Members, and discussed any trade-related aspect of electronic commerce put on the table by the participating Members.

After the successful conclusion of the exploratory work in December 2018, on 25 January 2019, 76 Members of the WTO, including the EU, confirmed their intention to commence WTO negotiations on trade-related aspects of electronic commerce. The participating Members have confirmed that they would seek to achieve a high standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO Members as possible. They recognised and committed to take into account the unique opportunities and challenges faced by Members, including developing and least developed countries, as well as by micro, small and medium sized enterprises, in relation to electronic commerce. Finally, they confirmed their intention to continue to encourage all WTO Members to participate in order to further enhance the benefits of electronic commerce for businesses, consumers and the global economy.

Accordingly, the e-commerce negotiations should take place in a plurilateral setting within the WTO framework, and remain transparent and open to any WTO Member that decides to join. The participating Members may put on the table any negotiating proposal in the realm of the trade-related aspects of electronic commerce, at the beginning or at a later phase of the negotiating process in the WTO.

The Commission obtained authorisation from the Council under the Doha Development Agenda (DDA), for negotiations in the WTO inter alia on trade in services and trade facilitation as well as on the progressive liberalisation of trade rules. Given that electronic commerce forms an integral part of how services and goods are traded, the new WTO negotiations on trade-related aspects of electronic commerce are covered by the existing authorisation, as the negotiations on electronic commerce belong to the field of trade in services, trade facilitation and progressive liberalisation of trade rules. Therefore, a new Council decision authorising the opening of negotiations pursuant to Article 218(3) of the Treaty on the Functioning of the European Union (TFEU) is not required.

Nonetheless, while electronic commerce is not a new issue on the agenda of the WTO, the plurilateral negotiations on trade-related aspects of electronic commerce could potentially be broad and may address a number of topics on which the EU has internal legislation as well as specific concerns, in particular on cross-border data flows and audio-visual services, and specific priorities. Consequently, in order to frame more accurately the negotiations, the Commission recommends to the Council the adoption of negotiating directives specific to the WTO negotiations on electronic commerce.

The proposed negotiating directives aim to ensure that the EU is in a position to engage in the negotiation of any trade-related aspect of electronic commerce proposed by the participating WTO Members in the course of negotiations, in full respect of the acquis, including the framework for personal data protection, and the EU’s policy choices in trade negotiations.

For the EU, the objectives of the negotiations are to enhance global electronic commerce, facilitate the operations of businesses, including micro, small and medium enterprises, strengthen consumers’ trust in the on-line environment and create new opportunities to promote inclusive growth and development. In order to achieve a high-standard outcome with the participation of the largest possible number of WTO Members, the rules and commitments should provide for appropriate flexibility for Members.

The most probable outcome of the WTO negotiations on electronic commerce is a set of WTO rules that Members can subsequently and unilaterally decide to attach to their existing schedules of commitments in the WTO.