Complex Landscape of E-Commerce | 31 Oct 2023

Source: ET

Why in News?

In a recent meeting at the World Trade Organization (WTO) in Geneva, India raised concerns about the lack of a clear definition for e-commerce trade in goods and services.

• The absence of a precise delineation has led to contrasting views between developed and developing member countries, particularly regarding the imposition of customs duties.

What are the Primary Points of Dispute Concerning E-commerce?

• Interpretational Divergence in E-commerce: Goods vs. Services
  • Developed and developing nations differ in their interpretation of e-commerce, particularly in the context of goods and services.
    • This challenge is exemplified in the case of streaming services like Netflix, where content (a product) is delivered via a service membership.
  • This variance complicates the establishment of clear policies within the WTO framework.
• Uncertainties Surrounding Customs Duties:
  • WTO members have been extending the Moratorium regarding imposition of customs duties on electronic transmissions since 1998. And, the last extension came during the 12th ministerial conference.
  • But the absence of a defined framework for e-commerce trade in services creates uncertainties, raising concerns about maintaining a level playing field.
  • India emphasizes the necessity of a clear definition, particularly highlighting the need for differentiation between digital goods and services due to existing customs duties on goods but not on services.

• Cryptocurrencies: E-commerce Disruption:
  • The Global Trade Research Initiative (GTRI) highlighted that the growth of cryptocurrencies poses a challenge to the current WTO e-commerce framework, prompting an immediate need for discussions on classifying them as electronic transmissions.

What is E-Commerce?

• About:
  • The World Trade Organization defines e-commerce as the electronic production, distribution, sale, or delivery of goods and services.
  • This includes products like books, music, and videos transmitted digitally.
• Benefits Provided by E-commerce:
  • Convenience and Accessibility: Customers can shop anytime, anywhere, providing unparalleled convenience and accessibility to products and services.
  • Data-driven Insights: Access to consumer data provides valuable insights for businesses to understand customer behavior, preferences, and trends, allowing for targeted marketing and improved customer experiences.
  • Diverse Product Offerings: E-commerce platforms offer a wide array of products and services in one place, allowing customers to easily compare and choose from a diverse range of options.
  • Convenient Payment Options: Multiple payment gateways and options available, providing ease and security in transactions for both businesses and customers.
  • 24/7 Accessibility: Unlike physical stores, e-commerce platforms are operational 24/7, providing constant access to products and services for customers worldwide.
  • Global Reach: Allows businesses to reach a global market without the constraints of physical locations, enabling access to a broader customer base.