Nations agree on e-commerce rules recognizing digital documents

More than 90 countries have signed an e-commerce agreement under which they will recognize each other’s electronic documents and electronic signatures, putting an end to most paper documents and forms.

The World Trade Organization agreement, led by Japan, Australia and Singapore, is the result of five years of negotiations. Once in force, it will require participants to maintain a framework for electronic transactions, electronic authentication and electronic signatures, electronic contracts, electronic invoicing, paperless trade, the creation of single windows for data transfer and electronic payments.

This law will permanently ban tariffs on digital content, strengthen consumer protection online, and expand cooperation on cybersecurity threats.

Digital trade accounts for around 25% of all international trade and is growing at a faster rate than traditional trade. “The OECD estimates that global digital trade is worth around £4 trillion and growing, but there is no common set of global rules,” said British Business and Trade Secretary Jonathan Reynolds.

Other provisions of the agreement include legal safeguards against online scams and misleading product claims. There will also be a range of initiatives to make it easier for consumers and businesses in developing countries to engage in digital trade—for example, a grace period of up to seven years to implement provisions they may find problematic, along with financial support.

Finally, the agreement prohibits national telecommunications regulators from having a financial interest in, or an operational or management role in, an undertaking providing public telecommunications networks and services.

“These rules, once integrated into the WTO framework, will be fundamental to the development of global digital trade, establishing common ground and preventing fragmentation,” said Valdis Dombrovskis, Executive Vice-President of the European Commission and Commissioner for Trade.

“This agreement will benefit businesses and consumers, integrate developing and least developed countries into the global digital economy and help bridge the digital divide. The EU sees great value in the agreement published today and will work with all parties involved to integrate it into the WTO framework.”

But while 91 countries have signed the agreement, the U.S. has not. Describing the agreement as “an important step forward for the WTO in a sector of growing importance to the global economy,” Ambassador María Pagán said the U.S. was unhappy with some of its provisions, particularly those related to security interests.

“As the United States has repeatedly communicated to co-hosts and participants, the current text is insufficient and more work is needed, including on the essential security exception,” she said. “We look forward to working with interested members to find solutions to all remaining issues and bring negotiations to a timely conclusion.”

Several other countries, including Brazil, Indonesia and Turkey, have also expressed reservations, particularly about the requirement to remove import tariffs on digital products – despite the fact that such a ban has been in place for more than two decades.

The agreement will be incorporated into the WTO legal framework, which will require consensus among all WTO members and will be regularly reviewed. The co-hosts say they recognize that some issues have not been discussed and that future negotiations will cover them.