13 November 2018

Africa Objects to E-Commerce Regulation

Africa's civil society is opposed to a push by large corporations to negotiate rules to govern e-commerce.

Last month, Geneva was abuzz as the World Trade Organisation's Public Forum - the global trade body's largest annual outreach event - gathered to discuss the latest developments in global trade and to propose ways of enhancing the multilateral trading system.

On the sidelines of the Public Forum, held from October 2-4, African civil society organisations - often derided as "those noisy groups" in trade negotiation circles - termed the rules "digital colonisation" and opposed negotiations on global e-commerce rules.

The proposed e-commerce rules will prohibit national regulations for local storage and processing of information, transfer of or access to source code, use of local computer facilities and content in electronic transmissions, and Internet Service Provider liability for uploaded content.

But the current text of the e-commerce rules also has weak elements on privacy and rights involving online consumer protection, personal information protection, unsolicited commercial electronic messages, conditional access to and use of the Internet and open networks, strong state security powers, which allow deviations from the provisions on a self-judging basis, and streamlining actual cross-border commerce through electronic authentication and e-signatures, prohibition of digital Customs duties, and international co-operation.

This year's forum was held under the theme "Trade 2030," which envisages sustainable and technology-enabled trade, and a more inclusive global trading system based on the future of global commerce being driven by technology, even in the world's least developed countries (LDCs).

Officials of Southern and Eastern Africa Trade and Information and Negotiations Institute (Seatini) who attended the forum say that despite the obvious indicators that digital trade is the future of global commerce, it is premature to negotiate its rules as it is not part of the Doha Development Agenda issues.

Opposition

"Many LDCs and developing countries are also opposed to negotiating rules on e-commerce because, if agreed to, these rules will put power over countries' futures and their economies in the hands of a largely unregulated private oligopoly," reads a policy brief from Seatini.

According to Seatini, negotiating binding WTO rules on e-commerce is being pushed for by tech giants like Google, Alibaba, Amazon, Facebook and Apple, among others who control the internet, in order to secure rules that will consolidate their power.

These tech giants want unimpeded expansion throughout WTO member countries in order to build scale, quash competition and cement their first-mover advantages. Currently there are no global intergovernmental rules for the internet, only those made by bodies dominated by powerful states and major corporate players.

Therefore, making e-commerce rules at WTO would ensure that the first and only rules the major powers allow will be biased in favour of corporate interests with whom they have an intimate relationship, Seatini and the African Group say.

But the position of the African Group against binding e-commerce rules runs parallel to events closer to home, where the continent's largest trading bloc -- the Common Market for Southern and Eastern African (Comesa) - in 2016 came out of the blocks to announce the start of the digital free trade area to be rolled out the following year.

In making this digital leap and scoring a first on the continent, Comesa was shaping the future of trade within the bloc along the same model as that of Alibaba and the Malaysian Free Trade Zone.

While recognising Africa's concerns over poor e-commerce infrastructure, global trade experts will not necessarily back the Africa Group. For instance, Secretary General of Unctad Dr Mukhisa Kituyi challenges governments and businesses on the continent to up their game and become major players in the electronic market place.

"More than 70 per cent of trade in the European Union now is driven through the electronic marketplace; the most advanced electronic marketplaces in Africa are South Africa, Morocco and Kenya. And they are at five per cent. Uganda is at 1.5 per cent," Dr Kituyi said.

"In a world dominated exponentially by electronic trading, if you are not visible on the electronic marketplace, you are non-existent," he added.

Indeed, not everyone in Africa is opposed to writing rules on global digital trade as some countries such as Kenya, Nigeria, Cote d'Ivoire and Seychelles have aligned themselves as "friends of e-commerce." These countries believe that e-commerce will provide opportunities to their micro, small and medium sized enterprises to reach new markets.

Far-reaching implications

However, trade negotiation experts argue that in its current proposed text, e-commerce has far reaching implications for developing and LDCs, according to Africa Kiiza, Seatini's programme officer for trade policies and negotiations.

Mr Kiiza says Africa, with 33 out of 54 economies still categorised by the United Nations as LDCs, is far from ready.

"Three things are required for their meaningful integration into e-commerce - accessibility, affordability and availability," he said, adding that this is mission impossible for a region where 75 per cent of the population is offline, and where fixed broadband penetration remains at below one per cent.

"African countries are yet to be convinced that the benefits of e-commerce would be realised by them, given the vast capability and infrastructure gaps they face," Mr Kiiza said.

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