Global ecommerce regulation could take effect by 2020

By Synnove Vandal

International ecommerce rules that govern the flow of data and goods are on the horizon.

After a closed-door meeting in late January, 76 World Trade Organization members released a joint statement confirming their intent to:

Commence World Trade Organization negotiations on trade-related aspects of electronic commerce.

The global ecommerce market is expected to reach $1 trillion by 2020. Despite this growth, the world lacks shared rules for international ecommerce transactions.

Instead, each country has their own national regulations. This makes it hard for ecommerce companies to maintain compliance and expand operations overseas.

Cross-border ecommerce laws have been a recurring issue in the international community—the WTO first debated how to tax electronic commerce transactions in 1998.

But the new round of talks, which will focus on the international transfer of corporate and consumer data associated with ecommerce, may finally bring peace to a decades-old plight.

Discussions will begin early this summer and agreed-upon rules could be implemented as early as 2020.

Countries have yet to reach a consensus on key rules

The WTO discussions aim to enhance the benefits for all businesses and consumers across the globe. But as of now, ecommerce standards vary greatly between nations.

The U.S. and Japan are pushing for a free flow of information, which would allow companies to bring data “home” for analysis. They also want to outlaw government requests for corporate secrets.

These proposals are likely targeted at China, as Beijing currently:

• Bans foreign companies from transferring data outside the country
• Forces foreign companies to disclose software source codes
• Demands foreign tech companies operating in China keep servers in the country

The European Union, on the other hand, will likely emphasize privacy protections. Last May, it passed the General Data Protection Regulation (GDPR)—preventing transfers of personal data outside the EU.

The EU is also promoting its digital single market strategy, which aims to tear down unnecessary regulatory barriers between European countries.

Chinese officials have also announced plans to participate in the discussions. The government is opposed to the free flow of data, but a source at the meeting said:

It is upbeat about simplifying customs procedures.

Law could improve customs efficiency for smaller ecommerce transactions

Developing international ecommerce regulations could have a significant impact on customs efficiency.

While world customs agencies are used to processing large-scale B2B transactions, ecommerce is straining customs authority resources.

B2C ecommerce transactions often involve a one-off single shipment from a small company to a residential address. These transactions are harder for customs officials to process because they come from less-established entities.

At a trade event last year, World Customs Organization (WCO) Secretary General Kunio Mikuriya said the rapid growth of ecommerce is bringing a:

Tsunami of small packages to the doorsteps of customs administrations and other regulatory agencies around the world.

And customs requirements continue to pile up for ecommerce companies as online shopping becomes more prevalent. But promoting electric signatures to improve the efficiency of customs work is a major topic on the WTO’s agenda.

Seventy-six nations plan to participate in the global ecommerce regulation discussions. While it remains to be seen whether the members can move past their differences, WTO Director General Roberto Azevedo said:

Starting negotiations with voluntary participants is a positive trend.

Follow the link below for more on the potential global ecommerce rules.

Over 70 nations agree to hammer out global rules for e-commerce – Rintaro Hosokawa, Nikkei Asian Review

Synnove Vandal is a Client Manager at InTouch Manufacturing Services, a QC firm that performs product inspections and factory audits in Asia for clients in the US, EU and Australia.