10 Quick Wins for Digital Trade - Part 2

On this episode, Kellie and Belén chat with Johanna Hill, the TradeExperettes Outreach Director, about the TE “10 Quick Wins for Digital Trade” Report that is part of TE’s Digital Trade Year and was launched in September 2022, in Geneva, during the WTO Public Forum. It also includes valuable inputs from some of the experts that contributed to the report: Marion Jensen, Director, Trade and Agriculture Directorate, at the Organisation for Economic Co-operation and Development (OECD), Eunice Huang, Head of Asia-Pacific Trade Policy at Google, and Anna Jankowska-Eriksson, Market Analyst at the International Trade Centre (ITC).

Kellie Kemock: Welcome to this episode of the TradeExperettes Podcast. My name is Kellie Kemock, and today we have Belen Gracia and Johanna Hill. Today we'll be talking about the 10 Quick Wins for Digital Trade. So this year the TradeExperettes has been focused specifically on digital trade. And, we'll be able to discuss this a little bit more.

Belén Gracia: Today you will hear the second episode of the two episode series that we put together about the 10 Quick Wins for Digital Trade, a TradeExperettes report that we published and launched in September 2022 during the WTO Public Forum. And as Kellie said to talk about this report today we have Johanna Hill, the TradeExperettes Outreach Director, and she's joining us again for this episode. Thank you for joining Joha! 

Johanna Hill: Thank you so much for having me. 

Belén Gracia: And we are also gonna have the inputs of some of the authors of the report that were generous enough to share their thoughts with us about the ideas behind some of the quick wins that are included in the report.

So perhaps to start, let's remind our listeners that the Ten Quick Wins project is a TradeExperettes project that started in 2021 with the idea to share with policymakers and ambassadors at the WTO the analysis and the proposals of female trade experts from around the world and with different backgrounds about specific trade topics.

In 2021, we published a report on trade and gender, and last year the report focused on digital trade. 

Johanna Hill: So yes, as you well said, every year we bring together an esteemed group of experts to share their analysis and proposals on important trade issues. Then the report is published on our website and we get to present it at a WTO Ambassador's Roundtable event during the week of the WTO Public Forum.

So in 2022 we focused on digital trade, because 2022 was such an important year for this issue. First we had the Ministerial Conference No. 12, which resulted in a number of tangible outcomes, one of them being the renewal of the WTO moratorium on e-commerce custom duties. And the moratorium has been renewed, you know, until the next ministerial. But the authors on the report felt that a long-term solution is needed in order to avoid the tension that arises each time it comes up for renewal. And also, you know, this discussion should probably stimulate a broader dialogue on the importance of digital trade to the modern global economy.

So, in the 10 Quick Wins Report, we brought together academics, policymakers, practitioners at international organizations, private sector representatives and independent consultants to present some pragmatics suggestions on how to grow economic opportunities for digital trade for all WTO members, so we thought it would be a timely contribution to that ongoing dialogue on digital trade, and it outlined a set of priorities that members could seize upon to transform their ambitious agenda into action.

Belén Gracia: Yes! And during the first episode of this series Joha and I talked about the first five 10 Quick Wins that include, among others, adopting a holistic, responsive, and agile approach, promoting the use of international standards in digital trade, fostering a predictable regulatory environment for data flows and consumer trust. So if you are interested in any of the topics covered by those quick wins, we recommend that you go and listen to that episode as well. And in this episode, we are going to cover the last five quick wins. And Kellie is going to start with quick win number six, right Kellie? 

Kellie Kemock: Yeah, so if we start with quick win number six: to craft digital trade rules that are sensitive to the needs of small and medium-sized enterprises. And we'll hear from Eunice Huang, the Head of Asia-Pacific Trade Policy at Google, who helped draft Quick Win No. 6.

Eunice Huang: Digital trade is fundamentally inclusive trade. While trade used to be limited to the big companies that could set up shop in multiple markets all over the world, the internet has enabled small businesses to do so at a fraction of the cost. Whether you are a minority-owned business, whether you are in a rural community, whether you are women-owned business, the internet has really provided new opportunities for people to get out there, to reach new customers, to export to the world at a fraction of the cost that used to be a barrier to trade. But these opportunities are really easily lost if the global trading system is not responsive to the needs of these small businesses to thrive and to participate in digital trade.

In particular, the fragmentation that we see in terms of regulation across the world makes it really difficult for small businesses to be able to navigate exporting in 10 different markets or 15 different markets when they have to deal with 10 different sets of privacy laws, for example, or when they're forced to localize their customer data in 10 different markets. This adds significant cost to small businesses, and it becomes a ceiling on their growth globally, and this is a real pity if small businesses are not able to capture the opportunities that the internet has made available for them to be able to have that opportunity to grow and to scale globally.

What digital rules that the WTO can bring is more certainty for small businesses and in particular to have rules that facilitate small businesses participation in digital trade globally. So, for example, the requirement for physical presence, or a local representative as a condition of doing business in the market should be eliminated. This goes against the benefit of digital trade and, and internet enabled trade where you don't actually have to have physical presence in each market to be able to reach customers.

The other area where it's really important for small businesses is consistent data rules across economies, which allows for cross-border data flows and, which allows people to use data services, cloud computing services, for example, in a most cost effective way, so that they don't have to localize data in all the markets that they participate in.

The other and finally last one is on The permanent prohibition of customs duties, on digital products and electronic transmissions. This is really important as the imposition of any tariffs or customs duties on electronic transmissions or cross-border data transfers would really add significant cost to small businesses, and it will really deprive them of the opportunity that the internet has given to them to be able to grow at a pace and at a scale that we have never seen before.

Belén Gracia: So, Joha, Quick Win No. 7 refers to the need to simplify and digitize border processes to improve small and medium enterprises' access to e-commerce. Could you say more about this? 

Johanna Hill: Yes. As everyone is aware these days in most countries, small and medium enterprises or SMEs are the backbone of the economy. They employ a significant number of the working population, and ultimately they drive growth. So, at the start of the pandemic, SMEs had days, if not weeks, to expand or create their online operations and find markets to survive restrictions to normal economic activities. And trade became an avenue to absorb the shocks that were created by the restrictions to these normal economic activities. And this has really accelerated the shift towards e-commerce in both the developing and the developed world. 

So many business persons, you know, from buyers and sellers to their providers of intermediate goods and services had to rapidly adopt new technologies or expand the ones that they were already using, so that they could keep on trading. And this was done at a great speed and with great efficiency. Something I don't think we could have imagined just a few decades ago. So, at the time that businesses were doing this, many countries also worked during the pandemic to simplify and digitalize their customs rules and procedures at the border, especially for critical goods such as medicines and food, but not all countries, and maybe not to the extent that many businesses would like, were able to do that shift, right? And sometimes, you know, in many countries, we still have customs procedures that rely heavily on hard copy paper documents, and sometimes you need to take three or four copies of the same document, and sometimes have manual processes that can become inefficient. So while large firms also face many trade barriers, you know, that have to do with these type of processes, SMEs also have to face them and they really carry a heavy burden that's actually disproportionate, you know, that can result in delays to their [00:10:00] shipments, their final shipments or receiving intermediate goods. And this adds cost, due to some of these customs procedures that seem to be outdated at this time, now that we are fully into the digitalized economy. 

So, governments have a capacity to enhance e-commerce, especially for the small businesses that made that shift during the pandemic and now want to grow their businesses by simplifying many of the border procedures, especially by enabling electronic submissions of customs documents, digitalizing the processing of duties and taxes for low value imports and streamlining processes for cross order returns based on initial import data.

In this report, we mentioned that UPS recently commissioned an SME survey across key global markets, and the survey showed that e-commerce is a top priority for SMEs and that customs procedures remain a major impediment or hurdle. The survey also looks at the relative experience of women-owned and men-owned businesses, and across most markets the survey found that women-owned SMEs were more likely to be selling online than men-owned SMEs, both prior to the pandemic and at the time of the survey. So we're hoping that more countries will go forward with simplifying their procedures and digitalizing them so that more SMEs can take advantage of trade opportunities.

Belén Gracia: Right. And together with Quick Win No. 7 that, as Joha said refers to the importance that this simplification and digitalization has for women-led or women-owned businesses, Quick Win No. 8 is where the link between digital trade and gender comes in since it proposes to apply a gender lens to the discussions under the Joint Statement Initiative on E-commerce. And to explain this point, we will hear Marion Jensen, Director of the Trade and Agriculture Directorate at the Organization for Economic Cooperation and Development, the OECD.

Marion Jensen: It is important to apply a gender lens to the discussions under the Joint Statement Initiative on E-commerce. Why is this the case? Well, the digital transformation offers new opportunities for firms across all sectors and all sizes. This is the case because it has the potential to reduce trade costs quite significantly. The digital transformation facilitates coordination within global supply chains, it helps connect businesses and consumers globally and enables the digital delivery of services. So, it is important to ensure that women-led films can take full advantage of digital tools. For this to happen, we have to keep in mind that women-led films are generally smaller than men-led firms, that in many parts of the world, women still have less access to the internet, and that in most parts of the world women are less educated in using digital tools, they're less likely to pursue so-called STEM studies, studies in science, technology, engineering, and mathematics. Now what then can be done under the Joint Statement Initiative to nevertheless ensure that women can take full advantage of the digital transformation and of e-commerce?

Well, first, it'll be important to ensure the participation of women in consultation and engagement processes for digital trade policy making. This will ensure that their views are taken into account. Second, it will be important to promote the use of digital tools to enable women-led firms to engage in trade, including in developing countries. In other words, it is not enough to develop such tools and to design digital trade policies. It will be important to ensure that women take advantage of digital tools and start using them. Third, in order to understand what works and what doesn't work, it is important to promote greater upstream use of gender differentiated impact analysis to understand the potential impacts of digital trade policy changes. And last but not least, then, that's my fourth point. It is important to leverage capacity building processes in the e-commerce work program to promote greater gender balance in STEM studies and through the professional information communication and technology pipeline. The digital transformation has the potential to be a great level-off for digital opportunities. Let's make sure that the Joint Statement Initiative on E-commerce is also used to level the playing field among men and women-led firms. 

Kellie Kemock: Quick Win No. 9 discusses providing equitable and accessible capacity building to ensure that developing economies, SMEs and women can all benefit from growing e-commerce opportunities. And to discuss this we have a short audio from Anna Jankowska-Eriksson, she's a market analyst at the International Trade Center.

Anna Jankowska-Eriksson: Quick Win No. 9 is about ensuring equitable access to the gains from e-commerce, by providing the right capacity building programs. It's about ensuring that smaller firms, women and youth-led firms, especially those from developing economies, have the digital entrepreneurship skills they need to run a successful business online.

Now this means they need to understand the fundamentals of trade research, but also beyond that, things like digital marketing, understanding how to make digital payments and ensuring that they have sufficient cybersecurity. There are already a number of successful programs ongoing, such as the UNCTAD E-Trade for All initiative and some ITC programs like She Trades and E-Comm Connect. So there's certainly something to build on. 

The Joint Statement Initiative on E-commerce also created the E-commerce Capacity Building Framework, which is especially focusing on the training of policymakers. It looks at issues related to digital transformation, helping negotiators build the skills they need, especially regarding policies and regulations that will enhance trust in digital markets.

These efforts for capacity building in commerce are especially important just because there's been such an incredible surge in e-commerce, especially in response to the covid pandemic and from a trade and gender perspective because, several studies have shown that women certainly have greater opportunities to trade online and face less discrimination, with regard to their sales.

So, making sure that women-owned firms have access to the right training is crucially important for enabling stronger and more inclusive growth.

To ensure that we meet prevailing needs and actually provide equitable access it's really important that we find the right funding and that establishment of a potential fund should be something that could be actually included in the final text of the E-commerce Agreement. And also specific language on gender empowerment, as was done in the services domestic regulation. I think this could really have a strong impact in making sure that we have the resources that we need and, build the firm-oriented, but also the policy maker-oriented programs to help economies flourish in the new era of digital trade. 

Kellie Kemock: And lastly, quick win number 10 points to transparency and engagement with non-governmental actors in the current JSI e-commerce negotiations. Joha, would you be able to explain this and tell us a little bit more why it's so important?

Johanna Hill: Well, as you know Kelly, the rise of the data-driven economy has resulted in a wide variety of policies geared towards digital technologies or other components, including areas such as cross border data flows, and even technology specific measures, in topics such as artificial intelligence. So the way that we are used to creating trade policy around the world is changing.

You know, governments are no longer alone in their quest to address the legal and policy challenges that are brought forward by digital technologies. Like say, for example, firms and other non-governmental entities are now involved in the promotion or creation of AI standards. 

Secondly, numerous policy initiatives are now taking place outside of the trade community due to their specialized nature. And if taken in a vacuum, they risk creating unnecessary restrictions on trade or even fragmentation. Some countries have forged ahead to address both the risks and opportunities arising from the emergence of the data-driven economy. So given the complexity surrounding all these issues, Countries could consider implementing additional measures to increase transparency and involvement of other actors, and, and many already have.

And this is why as TradeExperettes we were very pleased to participate last year at the Ambassadors Roundtable at the margins of the Public Forum in September because it was a way to promote a dialogue, you know, between governments, academia, and trade policy experts and practitioners from different walks of life that are presenting practical proposals and solutions to the e-commerce negotiations themselves and the wider digital economy.

Belén Gracia: Great. So with that, we end the summary of the 10 Quick Wins Report for Digital Trade. Thank you Joha for joining Kellie and I on this podcast series! 

Johanna Hill: Thank you so much, Kellie and Belén for inviting me. I'm a big fan of the series and it's an honor to be here with you today. 

Belén Gracia: And thank you to all the amazing trade experts that have contributed to the report and share their thoughts with us for these two episode series.

We are currently working on this year's 10 Quick Wins Report that will deal with issues related to trade and the environment, so stay tuned for that. And since this month, the TradeExperettes is turning five, This is our fifth year anniversary, we want to make a special request. If you are listening to us and have not joined us already, you can go to tradeexperettes.org and become a member and get access to exclusive content, training activities and events we organize every month only for our members. And if you're already a member, we want to thank you again for your support during the last five years and remind you to check your emails and our social media for information about our members only events. And thank you for listening to us!

Kellie Kemock: Yes, wonderful! Looking forward to the 10 Quick Wins Report, and if you haven't joined us already, please do so, we would love to meet you and work with you as well.

 The TradeExperettes Podcast is hosted by me, Kellie Kemock 

Belén Gracia: and by me Belén Gracia, and I'm also the executive producer. 

Kellie Kemock: If you would like to know more about the TradeExperettes, you can find us online at tradeexperettes.org, on LinkedIn and Twitter. Join us!