This column has been advocating for e-commerce regulations for some time now. (Read the last piece on the subject: “Need for e-commerce regulations,” published December 14, 2018). Now, it has been reported that Pakistan has not joined WTO-led deliberations on a global e-commerce governance framework. This has been attributed to lack of ministerial homework on the subject and the new government’s negligence on the matter.
Whatever the case may be, Pakistan must get involved in those talks. A multilateral e-commerce framework may have consequences for developing countries going forward – bad ones, if not checked. First, unlike the West and prosperous Asia, “digitization” is pursued by developing countries more as a development priority than as a commercial imperative. In Pakistan, presence of significant digital and financial exclusion necessitates a more forceful policy focus for e-commerce potential to be realised.
Second, a country like Pakistan that faces perennial twin deficits (fiscal and current account) would have trouble adjusting to a multilateral agreement that may call for opening up of cross-border digital trade. It is not clear what form a global agreement on e-commerce will take, but experts on the subject suggest that it will likely involve reducing taxes & duties and easing import restrictions on cross-border e-commerce.
And three, local e-commerce champions are needed for the sake of local skill development, job creation and tech transfer in this area. Already, the e-commerce landscape is dominated by American and Chinese tech-cum-retail giants. That has led some suspecting minds to use the term “digital colonialism”, concerned that major trans-national corporations will harm wealth-creation in the global south.
But there is no cause for panic yet. Currently, just below a half of WTO members are reportedly engaged on the issue. That’s enough for a plurality but way short of the consensus through which WTO is supposed to operate. Besides, it will take years to agree to a framework, for WTO bureaucracy and US-China trade disputes may come in the way of an agreement among major powers, the first step.
Yet there is no reason to continue slacking and letting an important sector grow without enabling regulations on key aspects like best business practices, dispute resolution, consumer protection, and data privacy. It was nearly a couple of years ago when BR Research had learnt about a federal-level, multi-stakeholder effort on e-commerce framework development. No progress has been made so far.
An inside source recently told BR Research that no headway could be made as there was no single ministry or regulator championing this framework. Six months into power now, the PTI government must appoint a taskforce, derived from a cross-section of industries, to develop a comprehensive e-commerce framework. Besides, it is never a bad idea to learn from best practices abroad; so, join the WTO talks.
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