WTO Chairs Programme Adapting To The Digital Trade Era .

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WTO Chairs ProgrammeAdapting to the digitaltrade era: challengesand opportunitiesEdited by Maarten Smeets

Print ISBN 978-92-870-4302-3 Web ISBN 978-92-870-4303-0WTO Online Bookshophttp://onlinebookshop.wto.orgWorld Trade Organization154, rue de LausanneCH-1211 Geneva 2SwitzerlandTel: 41 (0)22 739 51 11WTO PublicationsEmail: publications@wto.orgwww.wto.orgPrinted by the World Trade Organization.Report designed by Touchline (touchline.com)Image credits:Cover: Gorodenokoff; Page 14: Courage007; Pages 16-17: kung tom; Pages 36-37: Kobe611;Pages 54-57: Jono Erasmus; Pages 70-71: Diego Servo; Pages 92-93: i am zews; Pages116-117: i am zews; Pages 140-141: GaudiLab; Pages 158-159: Ahmad Saifulloh; Pages178-179: wavebreakmedia; Pages 194-195: Grigvovan; Pages 214-215: Andre Nery; Pages232-233: Drazen Zigic; Pages 254-255: Soundtrap; Pages 280-281: Chansom Pantip; Pages300-301: Bloom Productions; Pages 322-323: Gorodenkoff; Pages 336-337: asharkyu World Trade Organization 2021DisclaimerThe opinions expressed in this publication are those of the authors. They do not purport toreflect the opinions or views of the WTO or its members. The designations employed in this publicationand the presentation of material therein do not imply the expression of any opinion whatsoeveron the part of the WTO concerning the legal status of any country, area or territory or of itsauthorities, or concerning the delimitation of its frontiers.

Adapting tothe digital tradeera: challengesand opportunitiesEdited by Maarten Smeets

4CONTENTSContentsForewordNote on the WTO Chairs ProgrammeNote on The digital trade era – challenges and opportunitiesfor developing countriesChapter 1 The impact of digital technologies on developingcountries’ tradeEddy Bekkers, Robert Koopman, Giulia Sabbadini and Robert Teh36Strategic directions and policy implications fordeveloping countriesChapter 2 Global value chains in the age of internet: whatopportunities for Africa?Leila Baghdadi and Insaf GuedidiComments: Richard Newfarmer5466Chapter 3 Opportunities and challenges of e-commerce in MauritiusBoopen Seetanah, Kesseven Padachi, Sheereen Fauzel,Vinesh Sannassee and Sunil BoodooComments: Trudi Hartzenberg7088Chapter 4 The digital trade era – opportunities and challengesfor developing countries: the case of KenyaTabitha Kiriti Nganga and Mary MbithiComments: Nassim Oulmane and Mustapha Sadni Jallab92110Chapter 5 E-commerce in Africa: issues and challengesCharlemagne Igue, Alastaire Alinsato and Toussaint AgadjihouédéComments: Pierre Sauvé116132Chapter 6 China’s e-commerce development and policy relevanceYue Jiang, Lei Zhang and Yunhang JinComments: Qing Ye140154Chapter 7 Engaging in the digital economy: issues and agendain the quest to adopt of Indonesia’s e-commerce roadmapRiza Noer Arfani, Maharani Hapsari and Putra PerdanaComments: Marcelo Olarreaga158174

CONTENTS2345Chapter 8 Taxation of international e-trade: Russian particularitiesAlexander Pogorletskiy and Sergei SutyrinComments: Désirée van Gorp178192Chapter 9 Assessing trade facilitation implementation in the era ofe-commerce: a comparative analysis of Jordan, Omanand Hong Kong, ChinaTaleb Awad-Warrad, Houcine Boughanmi and Youwon HwangComments: Alexandros Sarris194210Chapter 10 The new rules on digital trade in Latin America: regionaltrade agreementsDorotea López, Bradly Condon and Felipe MuñozComments: Rohinton P. Medhora214228Chapter 11 Convergence on e-commerce: the case of Argentina,Brazil and MERCOSURVera Thorstensen and Valentina DelichComments: Mark Wu232250Chapter 12 The digital creative economy and trade: strategic optionsfor developing countriesKeith NurseComments: Wolf R. Meier-Ewert254274Making the most of the digital trade era – inclusiveness,gender and developmentChapter 13 Are digital advances and inclusive growth compatible goals?Implications for trade policy in developing countriesAli Parry, Adelia Jansen van Rensburg, Wilma Viviersand Emmanuel OrkohComments: Roberta Piermartini280296Chapter 14 Blockchaining international trade: a way forward forwomen’s economic empowerment?Amrita BahriComments: Emmanuelle Ganne300316The ways forwardChapter 15 Data regulation in trade agreements: different modelsand options aheadHenry Gao322Chapter 16 Converging thoughts on digital trade in preparingfor the futureMaarten Smeets336

6FOREWORDForewordWe are pleased to deliver preliminaryremarks to this compilation of researchwork on digital trade prepared by theWTO Chairholders, Advisory Boardmembers and the WTO ChairsProgramme (WCP) team of theWTO Secretariat.The measures of lockdown and socialdistancing that governments around theworld have adopted to mitigate theeffects of the COVID-19 pandemic haveled to increased online shopping andteleworking, making this book evenmore relevant and timely. The bookadds significant value to the debate ondigital trade by combining academicperspectives with policy relevanceand recommendations.The digital trade and informationtechnologies that characterize today’ssociety provide countries around theglobe with access to markets that werepreviously considered unreachable.The barrier of geographical distanceis no more: consumer choices areno longer restricted by and limited tothe goods found in local stores or innearby towns. E-commerce platformsprovide consumers with access toworld markets in real time. Likewise,producers can reach consumers forthe supply of goods and servicesalmost instantly and in ways that werepreviously unimaginable, all thanksto new technologies.The world economy has changedsignificantly since the World TradeOrganization (WTO) was founded,amongst other due to digitalization.We need to ensure that our tradesystem is up to date so that we canexploit new opportunities and addresschallenges of the present world.There is a need to reform the rulesthat govern trade, and this shouldbe done in an inclusive manner.Hence the relevance of the centralquestion addressed in the book –how can members ensure that the

FOREWORDchanges brought by digitaltechnologies benefit all and supportinclusive growth?7This book presents a sample of thework achieved so far within theframework of the Chairs programme,which finances Chairs in universitieslocated in developing countries. Whilenot necessarily endorsing all viewsexpressed1, France and the Netherlandsencourage enhanced and operationalcomprehension of the stakes of digitaltrade through academic research.We thank the WCP team for theirhard work and commitment to makingthe programme what it is today. Weequally thank the Chairholders for theircontinuous support and dedication tothe programme and the Advisory Boardmembers for having used theirknowledge and skills in service to thecommunity and in support of the WTOmultilateral trading system.Sigrid KaagFranck RiesterMinister for Foreign Trade and DevelopmentCooperation of the Kingdom ofthe NetherlandsMinister Delegate for Foreign Trade andEconomic Attractiveness, attached tothe Minister for Europe and Foreign Affairsof France1 For instance regarding the status of EU Privacy Protection in the digital era.

8NOTE ON THE WTO CHAIRS PROGRAMMENote on the WTOChairs ProgrammeThe WTO Chairs Programme(WCP) was launched in 2010 asa capacity-building project. It aimsto enhance knowledge andunderstanding of the tradingsystem among academics andpolicymakers in developing countriesthrough curriculum development,research and outreach activities byuniversities and research institutions.Information on the WCP is available atwww.wto.org/wcp.Following the conclusion of the firstphase of the WCP (2010-2013), itwas extended for a second periodof four years in 2014. After theconclusion of the second phase in2018, the WCP underwent anindependent external evaluation in2019, which led to the WTO’smanagement decision to extend theprogram and launch a third phaseof the WCP in the fall of 2020 forimplementation in 2021.WCP chairholders are selectedthrough a competitive process.Currently, there are 19 active chairs.The programme has provided financialsupport of up to CHF 50,000 perannum per institution for a periodof up to four years to each newlyselected chair. The WCP in itssecond phase was funded by theNetherlands with co-funding byFrance, in support of the two French-speaking least-developed countries(LDCs) in the WCP.The current chairholders are:Buenos Aires, ArgentinaLatin American Faculty of SocialSciences (FLACSO)Bridgetown, BarbadosUniversity of the West Indies,Cave Hill CampusCotonou, BeninUniversity Abomey-CalaviSão Paulo, BrazilGetulio Vargas Foundation, São PauloSchool of EconomicsSantiago, ChileUniversity of ChileShanghai, ChinaShanghai University of InternationalBusiness & EconomicsYogyakarta, IndonesiaUniversitas Gadjah Mada, Centerfor World Trade StudiesAmman, JordanUniversity of Jordan, Facultyof BusinessNairobi, KenyaUniversity of Nairobi, Schoolof Economics

NOTE ON THE WTO CHAIRS PROGRAMME9Réduit, MauritiusUniversity of Mauritius, Faculty of Lawand ManagementDakar, SenegalCheikh Anta Diop University, Facultyof Economics and ManagementMexico City, MexicoAutonomous Institute of Technology,Centre for International Economic LawSingaporeNational University of Singapore,Faculty of LawRabat, MoroccoMohammed V University – SouissiPotchefstroom, South AfricaNorth-West UniversityMuscat, OmanSultan Qaboos UniversityTunis, TunisiaUniversity of Tunis, ESSECTSt. Petersburg, Russian FederationSt. Petersburg State University,Faculty of Economics, Departmentof World EconomyIstanbul, TurkeyIstanbul Bilgi University

10CONTRIBUTORSNote on contributorsEditorMaarten SmeetsHead of Section, Knowledge andInformation Management, AcademicOutreach and WTO ChairsProgramme Division, WTO,Geneva, SwitzerlandContributing authorsToussaint AgadjihouédéFaculty of Economics andManagement, University of AbomeyCalavi, Faculté des SciencesÉconomiques et de Gestion,Cotonou, BeninAlastaire AlinsatoFaculty of Economics andManagement, University of AbomeyCalavi, Faculté des SciencesÉconomiques et de Gestion,Cotonou, BeninRiza Noer ArfaniDirector, the Institute of InternationalStudies (IIS) and Lecturer at theDepartment of International RelationsUGM; Director and Researcher,CWTS UGM, Indonesia; Chairholder,WTO Chairs Programme at the Centerfor World Trade Studies (CWTS),Universitas Gadjah Mada (UGM)Taleb Awad-WarradProfessor, University of JordanWTO ChairholderLeila BaghdadiProfessor of Economics, University ofTunis, Ecole Supérieure des SciencesEconomiques et Commerciales deTunis (ESSECT), DEFI Research Unit,Tunisia; WTO ChairholderAmrita BahriAssistant Professor of Law, InstitutoTecnológico Autónomo de México(ITAM), Mexico; WTO Co-ChairholderEddy BekkersResearch Economist, EconomicResearch and Statistics Division,WTO, Geneva, SwitzerlandSunil BoodooInternational Trade Division, Ministry ofExternal Affairs, Regional Integrationand International Trade, MauritiusHoucine BoughanmiAssociate Professor, Sultan QaboosUniversity, Oman; WTO ChairholderBradly CondonProfessor, Faculty of Law, ITAM,Mexico; WTO ChairholderValentina DelichAcademic Director, FLACSO,Argentina; WTO ChairholderSheereen FauzelUniversity of MauritiusEmmanuelle GanneSenior Analyst, Economic Researchand Statistics Division, WTO,Geneva, SwitzerlandHenry GaoAssociate Professor of Law at SingaporeManagement University, Singapore

CONTRIBUTORSInsaf GuedidiJunior Fellow, University of Tunis,Ecole Supérieure des SciencesEconomiques et Commerciales deTunis (ESSECT), DEFI ResearchUnit, TunisiaMaharani HapsariCo-Chairholder, WCP CWTS UGM;Academic Secretary and Lecturer atthe Graduate Program in InternationalRelations at the Department ofInternational Relations UGM; ExecutiveSecretary and Researcher, CWTSUGM, IndonesiaTrudi HartzenbergExecutive Director, Trade Law Centre(TRALAC), South AfricaYouwon HwangKorea Research Institute for HumanSettlements, M.A. InternationalBusiness, University of JordanCharlemagne IgueProfessor of Economics, Facultyof Economics and Management,University of Abomey-Calavi,Cotonou, Benin; WTO ChairholderAdelia Jansen van RensburgTRADE Research Entity, North-WestUniversity, South AfricaYue JiangLecturer, Shanghai Universityof International Business andEconomics, ChinaYunhang JinShanghai University of InternationalBusiness and Economics, ChinaTabitha Kiriti NgangaProfessor of Economics, School ofEconomics, University of Nairobi,Kenya; WTO Chairholder11Robert KoopmanChief Economist and Director,Economic Research and StatisticsDivision, WTO, Geneva, SwitzerlandDorotea LópezProfessor, Institute of InternationalStudies, University of Chile, Chile;WTO ChairholderMary MbithiSenior Lecturer of Economics, School ofEconomics, University of Nairobi, KenyaRohinton P. MedhoraPresident, Centre for InternationalGovernance Innovation, Waterloo,CanadaWolf R. Meier-EwertCounsellor, Intellectual Property,Government Procurement andCompetition Division, WTO,Geneva, SwitzerlandFelipe MuñozInstitute of International Studies,University of ChileRichard NewfarmerCountry Director, Rwanda andUganda, International Growth Centre,Washington, DC, United StatesKeith NursePrincipal and President, Sir ArthurLewis Community College, SaintLucia; former WTO Chair, Universityof the West Indies, Cave HillCampus, BarbadosMarcelo OlarreagaProfessor, University of Geneva,SwitzerlandEmmanuel OrkohTRADE Research Entity, North-WestUniversity, South Africa

12CONTRIBUTORSNassim OulmaneChief, Green Economy and BlueEconomy Section Technology, ClimateChange and Natural ResourceManagement Division, UNECA,Addis Ababa, EthiopiaKesseven PadachiUniversity of Technology, MauritiusAli ParryTRADE Research Entity, North-WestUniversity, South AfricaPutra PerdanaResearch Team Member, WCPCWTS UGM; Researcher, CWTSUGM, IndonesiaRoberta PiermartiniChief of Section, Trade CostsAnalysis, Economic Researchand Statistics Division, WTO,Geneva, SwitzerlandAlexander PogorletskiyProfessor, World EconomyDepartment, St. PetersburgState University, St. Petersburg,Russian FederationGiulia SabbadiniGraduate Institute Geneva(HEI), SwitzerlandMustapha Sadni JallabHead of Training and ResearchDivision, United Nations EconomicCommission for Africa, Institute forEconomic Development and Planning,Dakar, SenegalVinesh SannasseeProfessor, University of Mauritius;WTO Co-ChairholderAlexandros SarrisEmeritus Professor of Economics,National and Kapodistrian Universityof Athens, GreecePierre SauvéSenior Trade Specialist within theMacroeconomics, Trade andInvestment Global Practice of theWorld Bank Group, Geneva,SwitzerlandBoopen SeetanahProfessor, University of MauritiusWTO Co-ChairholderSergei SutyrinProfessor, World Economy DepartmentHead, St. Petersburg State University,St. Petersburg, Russian FederationWTO ChairholderRobert TehExtraordinary Professor in Trade andDevelopment, North-West University,South AfricaVera ThorstensenProfessor, EESP/FGV and Head ofthe Center on Global Trade andInvestments, São Paulo, BrazilWTO ChairholderDésirée van GorpProfessor of International Business,Nyenrode Business Universiteit,The Netherlands

CONTRIBUTORS13Wilma ViviersTRADE Research Entity, North-WestUniversity, South Africa;WTO ChairholderQing YeEconomic Affairs Officer, Knowledgeand Information Management Division,WTO, Geneva, SwitzerlandMark WuVice Dean for the Graduate Programand International Legal Studies,Stimson Professor of Law, HarvardUniversity, United StatesLei ZhangProfessor, Shanghai Universityof International Business andEconomics, Shanghai, China;WTO Chairholder

ACKNOWLEDGEMENTS15AcknowledgementsThis third book prepared underthe auspices of the WTO ChairsProgramme (WCP), Adapting tothe digital trade era: challengesand opportunities, containscontributions from the WTOChairholders of Phases I and II,Advisory Board (AB) members,WCP team and WTO staff memberswho peer reviewed individual chaptersand offered their perspectives on theChairs’ analyses and findings. Itcontains a total of 16 chaptersand 13 commentaries, providingvarious insights on digital trade.Several chapters were presented asworking papers during the Aid forTrade side event held at the WTOfrom 3 to 5 July 2019 and during anacademic WCP session held at thePublic Forum on 9 October 2019.These events provided opportunitiesto AB members, academics,delegates, policymakers andrepresentatives from civil societyto comment on the papers anddiscuss the policy options emanatingfrom the analyses.Current and former members ofthe WCP team, including NassimOulmane, Roberta Piermartini,Mustapha Sadni Jallab, MaartenSmeets, Robert Teh and Qing Ye,contributed to the book with a chapteror commentary. Maarten Smeets,heading the Academic Outreachand WTO Chairs Programme sectionin the Knowledge and InformationManagement, Academic Outreachand WCP Division (KMD), whichhouses the WCP, was responsiblefor the overall coordination andediting of the book and prepared theintroduction and the concludingchapter.This book thus is the result of acollective effort by WCP teammembers, Chairholders and theirco-authors, AB members, WTOstaff members, discussants of thedraft papers, participants to andattendees of the WTO events. Thebook would certainly not be what itis without the support of William Shaw,who assisted in the preparation ofthe book with substantive editing,and the WTO’s in-house editors,including Anthony Martin andespecially Stephanie Carmel, whometiculously assured the final textediting of the book. The book wasdesigned by Touchline. Sandra Rossierinteracted with the authors, ensuringtheir timely inputs and feedback.

Introduction

Digital innovations are transformingthe global economy. The decline insearch and information costs, rapidgrowth of new products and markets,and emergence of new playersushered in by digital technologieshave the promise of boosting globaltrade flows, including exports fromdeveloping countries. At the sametime, digital technologies are alsothreatening privacy and securityworldwide, while developing countriesthat lack the tools to compete in thenew digital environment are in dangerof being left even further behind.This book from the World TradeOrganization (WTO) Chairs, membersof the Advisory Board and WTOSecretariat staff examines what therapid adoption of digital technologieswill mean for trade and developmentand the role that domestic policiesand international cooperation canplay in creating a more prosperousand inclusive future.The first section identifies thechallenges and opportunities posedby digital technologies to developingcountries and the role of internationalcooperation, whether regionallyor in the WTO, in addressing them.The second section discusses howcountries in different developingregions view the opportunities andchallenges of digital technologiesand how policymakers are respondingto them. The third section considersexamples of how digital advances,for example the growth of e-commerceand the development of blockchaintechnology, may contribute to inclusivegrowth. The fourth and final sectiondiscusses the role of domesticpolicies and regional approachesto digital trade and offers somekey findings.

18INTRODUCTIONSection 1: The digitaltrade era – challengesand opportunities fordeveloping countriesInnovative digital technologies haveconsiderable potential for boostingdeveloping countries’ exports. InChapter 1, Bekkers, Koopman,Sabbadini and Teh providean empirical illustration of the potentialgains in trade, both globally and fordeveloping countries, from theadoption of robots, greater reliance onartificial intelligence and big datasets,more intensive use of information andcommunications technology (ICT)services by other sectors of theeconomy, and the reduction in tradecosts because of new digitaltechnologies. They use the WTOGlobal Trade Model, a recursive,dynamic computable generalequilibrium model, to generatesimulations showing the impact oftechnological change on trade. Themodel compares a scenario s

Nairobi, Kenya University of Nairobi, School of Economics Note on the WTO Chairs Programme 8 NOTE ON THE WTO CHAIRS PROGRAMME. Réduit, Mauritius University of Mauritius, Faculty of Law and Management Mexico City, Mexico Autonomous Institute of Technology, Centre for International Economic Law

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