By Kensington Speer, Intern, CUTS International Geneva

A roundtable, convened by the International Institute for Sustainable Development (IISD) and CUTS International, Geneva, as a part of IISD’s second Trade and Sustainability Hub, discussed the digital divide’s relationship to inequality and the impacts of e-commerce development and governance.

This session took place during the World Trade Organization’s (WTO) Twelfth Ministerial Conference (MC12), on 15 June 2022.

Yasmin Ismail, Programme Officer, CUTS International, Geneva, moderated the session. Speakers examined the nature of the digital divide, the importance of data in e-commerce, and digitization in Africa.

Torbjorn Fredriksson, Head of the E-commerce and Digital Economy Branch, UN Conference on Trade and Development (UNCTAD), outlined how the COVID-19 pandemic has accelerated digital use and e-commerce, while simultaneously deepening the digital divide between men and women, and rural and urban populations, and revealing digital skills gaps and inadequate legal and regulatory frameworks. He noted that South and Southeast Asia experienced the largest surge in e-commerce, while e-commerce in Africa plummeted, illustrating the digital divide between different regions and countries. Power imbalances intensified for digital platforms as well, with the largest online platforms experiencing extreme growth during the pandemic while smaller platforms saw more marginal growth. 

Fredricksson examined barriers to digitization, like insufficient infrastructure, slow internet speeds, and high costs that hinder many lower-income countries’ digitization. He listed potential e-commerce policy areas that “enable value creation and capture,” including digital entrepreneurship, intellectual property, competition, digitization readiness, and skills building in the labor market. Fredricksson provided information on UNCTAD digitization support services, including eTrade Readiness Assessments, e-commerce strategies, e-commerce and law reform, empowering women digital entrepreneurs, and measuring e-commerce and the digital economy. 

Fredriksson stated that data is a “cross-cutting issue that no single ministry can handle on its own.” He suggested governments aid small startups joining the digital space, include e-commerce in “more powerful national ministries,” and consider factors like human rights and health in their e-commerce policies. 

Marília Maciel, Digital Policy Senior Researcher, DiploFoundation, explained the importance of data flow and industrialization to e-commerce and how the WTO addresses these issues. Maciel described data as “the life-blood” of building a digital industry, as it is a bridge between the physical and digital world. She explained how raw data has little value on its own and needs to be analyzed to generate the knowledge needed for companies to optimize processes and maximize profits. Today, computers perform the vast majority of data analysis, placing access to digital technologies “at the core of successful, inclusive, and sustainable industrial development.” 

Maciel explained how proper data flow requires government intervention, but not protectionism, to prevent data hoarding by private actors and avoid a “data poverty trap,” especially in developing countries. Maciel stressed that the WTO’s Work Programme on E-Commerce “needs to stay alive” and address services classifications. Provisions for technical assistance to and capacity building in developing countries, she said, should be mandatory in international e-commerce negotiations and provisions. She suggested developing countries look to the European data strategy as a policy model, as it aims to create a single market for data to ensure Europe’s global competitiveness and data sovereignty.

Jamie Macleod, Trade Policy Consultant, and Research Assistant, London School of Economics and Political Science, examined how Africa could leverage its data and e-commerce in international policy negotiations. He said North African and anglophone countries are the most digitized on the continent. Macleod explained that digital divides within countries are commonly found between rural and urban populations and can be based on gender and age. He said they occur due to problems like low-quality internet at high costs, uncompetitive telecommunications markets, limited handset access, insufficient digital skills development, poor postal services, insufficient e-commerce legislation, and a lack of finance and digital payment options. 

Macleod advocated for “adaptive, appropriate, consultative, transparent, proportionate, and efficient” national and international e-commerce policy strategies focused on foundational digitization components, like digital access services and goods liberalization, competition policy, online consumer protection, regulatory harmonization, and coordination, cooperation, and mutual technical assistance. Although the African Continental Free Trade Area (AfCFTA) fast-tracked addressing e-commerce in 2021, he said, negotiations of an e-commerce protocol have been postponed due to prioritization of other issues. Macleod recommended that AfCFTA e-commerce protocol define “market prominence” based on the unique qualities of the digital economy and determine how strong enforcement institutions should be when negotiations resume. 

IISD’s second Trade and Sustainability Hub convened online, from 13-15 June 2022. [IISD Knowledge Hub Sources]