22 March 2021
UNCTAD Reviews COVID-19 Impact on E-commerce, Digital Trade
Photo Credit: Leon-Seibert
story highlights

The report finds the COVID-19 pandemic led to a further acceleration of digital transformation and has reinforced the importance of addressing existing e-commerce barriers.

The report recommends addressing existing barriers to countries’ digital readiness and ensuring an enabling environment for e-commerce through a holistic, multi-stakeholder approach across the whole e-commerce value chain.

The report’s recommendations are complementary to current negotiations among WTO members on a consolidated draft text on e-commerce.

The UN Conference on Trade and Development (UNCTAD) released a global review of the impact of the COVID-19 pandemic on e-commerce and digital trade, which finds that greater efforts are critical to reduce inequalities in e-trade readiness among countries. The report calls for governments, businesses, consumers, and international development partners to ensure e-commerce plays a “positive and powerful role” in national and international recovery efforts.

The report titled, ‘COVID-19 and E-commerce: A Global Review,’ finds that global gross domestic product (GDP) decreased 4.3% in 2020. Global trade in goods decreased 9%, and global trade in services decreased 15%. At the same time, e-commerce’s share in global retail increased from 14% to 17% from 2019 to 2020. In China, for instance, the online share of retail increased from 19.4% to 24.6% between August 2019 and August 2020. In Kazakhstan, the online share of retail increased from 5% to 9.4% over the same period. Downloads of shopping apps in Thailand increased 60% between February 2020 and March 2020. The teleworking, distance learning, online conferencing, gaming, and digital entertainment sectors also experienced accelerations in digital transformation in 2020.

The report finds the COVID-19 pandemic led to a further acceleration of digital transformation and has reinforced the importance of addressing existing e-commerce barriers. The report argues the accelerated trend towards e-commerce “is likely to be sustained during recovery,” and e-commerce platforms are likely to retain many of their gains in market share.

The report further states the digital economy and e-commerce “are at the heart of the SDGs,” bringing both opportunities and challenges. Challenges include widening digital divides with increased income inequality, elimination of jobs and tasks due to automation, and consumer protection, data privacy and cyber-crime. Opportunities include better access to global markets for goods and services, increased share of online retail, and acceleration of the digital transformation. The report emphasizes that countries that harness e-commerce’s potential will be better positioned to benefit from global markets for their goods and services in a digitalizing economy while countries that do not harness this potential risk falling behind.

The report recommends addressing existing barriers to countries’ digital readiness and ensuring an enabling environment for e-commerce through a holistic, multi-stakeholder approach across the whole e-commerce value chain. Approaches include e-commerce readiness assessments and strategy formulation, information and communications technology (ICT) infrastructure and services, access to financing for e-commerce, e-commerce skills development, and empowering entrepreneurs in developing countries.

Governments can support these approaches through systematic data gathering and evaluation of the impact of policies and business practices, identification of critical gaps that require intervention, developing e-commerce strategies that are integrated into broader national development, fostering public-private partnerships (PPPs) to increase awareness and trust in e-commerce among consumers and merchants, and strengthening inter-ministerial and stakeholder dialogues for effective coordination. Businesses in developing countries can become better prepared to participate in the digital economy, including through increasing their capabilities to capture and harness data and accelerating digitalization for smaller businesses.

The report’s recommendations are complementary to current negotiations among World Trade Organization (WTO) members on a consolidated draft text on e-commerce, including on the legal structure and pathway the e-commerce initiative will follow into the WTO framework.

During e-commerce negotiations on 16 March, members met in small groups to discuss text proposals on open government data, online consumer protection, paperless trading, and source code and open internet access. On digital trade facilitation and logistics, members discussed a threshold for low-value goods below which customs duties or taxes will not be collected, enhanced trade facilitation, logistics services, single windows data exchange, system interoperability, use of technology for the release and clearance of goods, improvements to trade policies, and provision of trade facilitating services. According to a WTO release, members are close to agreeing on a clean text on electronic signatures and authentication.

Co-convener George Mina (Australia) reminded members of their target to “deliver clean text on ten areas of the negotiations before the summer break.” He welcomed progress through small group discussions, and called on members to show a spirit of compromise. Co-convener Hung Seng Tan (Singapore) encouraged members to maintain ambition in the talks, and called on members to ensure the initiative “remains commercially meaningful to stakeholders” by making sure the agreements address modern business needs and new realities. Co-convenor Kazuyuki Yamazaki (Japan) said the initiative should address market access issues and continue to “give attention to developing countries which are facing challenges related to capacity building and the digital divide.”  

The joint statement initiative (JSI) on e-commerce is one of several such processes, which include JSIs on investment facilitation, services domestic regulation, micro-, small and medium-sized enterprises (MSMEs), and trade and gender.

UNCTAD and the UN Regional Commission for Latin America and the Caribbean (ECLAC) led the global review of COVID-19 and e-commerce. The study also drew on regional reports by the UN Economic Commission for Africa (UNECA), the UN Economic Commission of Europe (UNECE), the UN Economic and Social Commission for Western Asia (UNESCWA), and a number of other entities. The study is the first research-oriented project conducted under the ‘eTrade for all’ umbrella. eTrade for all is an initiative that aims to address knowledge gaps on e-commerce and foster synergies among partners. [Publication: COVID-19 and E-commerce: A Global Review] [WTO Press Release on E-Commerce Negotiations

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