SINGAPORE – Five years of negotiations have finally hammered out part of what would be a landmark framework for e-commerce rules that will make the global digital economy more trusted and efficient.

The new deal – a World Trade Organisation (WTO) initiative – should facilitate digital transactions across many sectors of world trade while making import and export processes simpler and more seamless.

The co-convenors of the WTO’s Joint Statement Initiative on E-commerce (JSI) – Australia, Japan and Singapore – said on Dec 20 that they have reached substantial conclusion on a number of rules covering three broad areas of digital trade: trade facilitation, the open digital environment, and business and consumer trust.

“This marks a significant milestone in the JSI, which commenced negotiations in January 2019,” said a statement issued by the three conveners in Geneva, Switzerland.

“We aim to conclude negotiations in a timely manner in 2024.”

The world’s three largest economies – the United States, the European Union and China – also participated in the talks.

The 164-member WTO is the only international body that deals with the rules of trade between nations so that producers of goods and services, exporters and importers can conduct business within a globally recognised and enforceable legal framework.

The JSI was launched in 2017 by 71 WTO members that agreed to initiate work on aspects of e-commerce.

Digital trade then was developing fast and is now estimated at 25 per cent of global trade, or about US$5 trillion (S$6.7 trillion).

The JSI now has 90 WTO members, which account for more than 90 per cent of global trade. It aims to compile a set of digital trade rules that build on existing agreements and frameworks with the participation of as many WTO members as possible.

The co-conveners said: “These rules will facilitate the ability of JSI participants to ride the rapid growth of digital trade and deliver tangible benefits to governments, businesses and consumers.”

There is still work to be done to tackle outstanding issues, including Customs duties on electronic transmissions, electronic payments, information and communications technology products that use cryptography, and telecoms services.

“A number of challenging proposals, including data flows and localisation, and source code, represent important issues for many participants, but they will require substantially more time for discussions as divergent approaches and sensitivities remain,” the co-conveners’ statement said.

Singapore has been active in the drive to formulate international trade rules that keep pace with the digital economy and help countries harness new opportunities.

“As a small and open economy, to Singapore, the rules-based multilateral system is our best hope for a stable international environment,” Prime Minister Lee Hsien Loong said at the Asia-Pacific Economic Cooperation summit in November.

A separate statement issued by Australia, Japan and Singapore, the WTO and several JSI members applauded the progress on e-commerce rules.

WTO director-general Ngozi Okonjo-Iweala said the JSI participants are demonstrating how they can deliver practical, everyday benefits for businesses and consumers while building a digital economy that aims to benefit people everywhere.

Singapore’s Minister for Trade and Industry Gan Kim Yong said the new rules will bring important commercial value and impact for governments, businesses and consumers by helping participants integrate into the global digital economy.

“Importantly, for Singapore, as a strong supporter of the rules-based multilateral trading system, this milestone also sends a strong positive signal on the WTO’s continued credibility and ability to forge meaningful rules,” he added.

China’s Minister of Commerce Wang Wentao welcomed the international consensus on digital and green developments, and said the JSI is the core platform for global digital trade rule-making.

“China hopes that this initiative can reach high-standard, balanced and inclusive digital trade rules at an early date” to help developing members seize and benefit from relevant development opportunities, he said.

US Trade Representative Katherine Tai said digital trade represents important growth opportunities for traders around the world, while at the same time posing regulatory challenges to governments that want to ensure the marketplace is fair and consumers are protected.

She commended the three co-conveners for their achievement and added that the US will continue to work in 2024 to help achieve further progress, with a view to a final package of rules that brings meaningful benefits to workers, businesses, governments and the public, particularly micro, small and medium-sized enterprises, and women-owned businesses.