Unlocking Global E-Commerce Opportunities for Bangladeshi Women at the WTO

With MC14 approaching, Bangladesh must step up its engagement in global trade talks to open up opportunities for millions of women entrepreneurs to compete globally

Since Covid-19, e-commerce has gained momentum, especially among women entrepreneurs. According to the e-Commerce Association of Bangladesh (e-CAB), at least 100,000 new entrepreneurs have joined the online marketplace. Moreover, 98% of e-commerce and f-commerce sellers in Bangladesh see e-commerce as a new opportunity due to flexible working conditions and access to global markets.

Despite global efforts to give women greater access to the internet, especially in poorer countries, women are still 16% less likely than men to use mobile internet services. This gap is particularly pronounced in South Asia and sub-Saharan Africa, where there is a 19% gender gap in mobile phone ownership.

While women are making progress in e-commerce, their ventures are often small and without supportive multilateral policies, they risk losing their entrepreneurial momentum.

Bangladesh has not played a significant role in previous trade negotiations, but with the upcoming MC14, hosted by the World Trade Organization (WTO) in Cameroon, the country should actively participate. Partnering with countries that support women-owned small businesses could create opportunities for millions of Bangladeshi women entrepreneurs. A global, rules-based framework would help level the playing field, ensuring that their businesses can thrive.

The moratorium, part of the WTO’s multilateral framework, was introduced in 1998 for trade-related aspects of e-commerce. It has been extended multiple times since then at each ministerial conference. India, South Africa and Indonesia say the policy deprives developing countries of tariff revenues from e-commerce imports and deepens the digital divide. Bangladesh, however, remains a beneficiary of the moratorium.

Bangladesh has recently entered sectors such as communications, internet banking and mobile financial services, and e-commerce has grown significantly, especially during the Covid-19 pandemic. Digitally delivered products, including audiovisual content, IT services, technology services and software, are gradually emerging, although volumes remain low.

Despite this progress, there has been no comprehensive study to assess whether Bangladesh would suffer if the moratorium were to be maintained or withdrawn. There is also no study on the potential revenue losses and strategies to offset them in the sector. Software exports currently stand at close to $1 billion, and some ITES services benefit from favorable policies.

Several studies have examined the impact of the e-commerce moratorium on women. A 2019 Policy Brief by the European Centre for International Political Economy (ECIPE) found that ending the moratorium would lead to higher prices, slower GDP growth and reduced tax revenues.

An OECD paper from the same year noted that beyond tax revenues, other issues also need to be taken into account, such as e-commerce tariffs, alternative revenue collection methods and the impact on services exports.

A 2020 UNCTAD paper estimates the potential losses in tariff revenues for developing countries. The ICC-ITC Policy Brief (2023) discusses the economic and administrative costs of not renewing the moratorium, highlighting direct taxes on consumers and businesses and negative impacts on digital services.

Additionally, a 2019 UNCTAD research report estimated that developing countries could lose $10 billion in tariff revenues, and Indonesia has already introduced legislation imposing tariffs on digital goods, although its current MFN rate remains at zero.

A group of international organizations, including the IMF, OECD, UNCTAD, the World Bank, and the WTO, collaborated to examine the revenue implications of a moratorium on e-commerce. Their final report estimates that the impact on government revenues will average less than 0.33% of total revenues.

The study recommends introducing a value-added tax (VAT) as an alternative to collecting revenue from digital trade. VAT is seen as fairer because it applies to both domestic and imported products and does not impose a tax burden on intermediate inputs used by local producers.

In December 2023, South Africa submitted a communication to the WTO e-commerce work programme expressing concerns that most global platforms channel their transactions through a global entity, depriving the importing country of corporate tax revenues. They argue that this hampers developing countries’ efforts to support digital industrialisation.

South Africa has proposed a fund that would provide targeted support to developing and least developed economies to address the digital divide. It argues that the moratorium gives global technology companies an unfair tax advantage over local competitors. However, other WTO members have opposed the proposal, saying it goes beyond the WTO’s scope.

Since 2019, a group of 90 WTO members have been negotiating a multilateral Joint Statement Initiative (JSI) on e-commerce. These participants, including South Korea, China, Brazil, the US and the EU, account for more than 90% of world trade.

As plurilateral negotiations, they have been taking place informally outside the formal agenda of the WTO’s multilateral agenda. For the e-commerce agreement to be added to Annex 4, all WTO Members would have to support the amendment under Article X.9 of the Marrakesh Agreement.

However, the opposition of India and South Africa did not prevent the adoption of other Joint Statement Initiatives (JSIs). For example, members adopted the JSI on Services Domestic Regulation and extended the moratorium on non-infringement and situational complaints under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) until MC14.

In addition, negotiations are ongoing to expand the TRIPS COVID-19 waiver, integrate the JSI on Investment Facilitation for Development, reform dispute settlement, resolve outstanding agricultural issues, and finalize a second agreement on fisheries subsidies. While outstanding issues such as dispute settlement and negotiation tracks remain, progress on the plurilateral JSI, driven by developing country leadership, underscores the continued importance of the WTO in setting international trade rules.

The WTO JSI on e-commerce has not yet included specific commitments related to gender. Although Canada presented a concept paper in 2019 focused on personal data, gender issues remain marginal in WTO discussions on e-commerce. There is potential to integrate gender dimensions into the ongoing e-commerce negotiations, which could have important implications for Bangladesh, particularly in terms of generating revenue from e-commerce.

Sketch: TBS

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Sketch: TBS