The agreement attempts to establish new guidelines and aims to set new standards for the digital trade worldwide
Around 80 countries, including Saudi Arabia, reached a landmark agreement on rules for controlling global digital trade, including e-signature recognition and online fraud protection. It happened at the recent World Trade Organization (WTO) meet which was held in Geneva.
The agreement was finalized after the crest of a five year negotiation among the members of the WTO and came into effect on Friday, 26th July 2024.
Out of 166 members of the World Trade Organization, 91 took part in the negotiations which included Saudi Arabia, China, Canada, Nigeria and Argentina. According to the declaration, the United States, Brazil, Indonesia, and Turkey are among the few negotiating countries that have yet to sign on.
The agreement came into light in 2019 with over 90 negotiating countries that represent about 90% of the WTO membership. The membership includes heavy hitters like the US, the European Union and China.
The agreement attempts to establish new guidelines and aims to set new standards for the digital trade worldwide. The deal takes into consideration crucial clauses like the recognition of electronic signatures and protection against online fraud.
“We negotiated the first global rules on digital trade,” EU trade chief Valdis Dombrovskis said after the deal in Geneva following five years of negotiations. “This will facilitate e-transactions, boost innovation, and integrate developing countries into the digital economy,” he said.
Saudi Arabia‘s participation demonstrates its commitment to integrating into the global digital economy and fostering the growth of a secure and inclusive e-commerce ecosystem.
According to Britain the agreement allows the participants to make custom documents and processes digital. It further recognizes e-signatures and e-documents and put in place legal safeguards against online fraudsters and misleading claims about products.
The measures of the agreement aims to make a trade after, fairer, cheaper and more secure. To add on, the agreement seeks to limit spam in order to protect personal data and also offer support and a helping hand to the least developed countries.
This agreement is expected to benefit consumers and businesses, particularly Micro, Small, and Medium Enterprises (MSMEs), and to greatly boost digital transformation in member nations.
Australia, Japan, and Singapore, who have been heading the ‘Initiative on Electronic Commerce’ talks as co-conveners, expressed pleasure with the development. They made an exact emphasis that the agreement would uplift legal predictability and certainty in the emerging e-commerce sector particularly amid the increasing regulatory fragmentations. They also presented a joint statement amid a closed door meeting at the WTO to confirm that the five years of negotiations had finally achieved a stabilized text.
The key component of the deal is the preferential treatment for the yet to develop countries. The law includes provisions for technical assistance and capacity building to assist these countries in efficiently implementing the new standards.
The agreement also proposes to make a permanent long standing suspension that exempts the electronic transactions from the custom duties. This has been extended at each of the WTO ministerial meetings since 1998 and is set to expire in 2026.
Although the agreement made progress, the actual implementation of the deal could take a couple of more years. Out of the 166 countries there are still a few countries including the US, Brazil, Indonesia, and Turkey, that have yet to sign on. Concerns about the existing text’s shortcomings, notably with regard to essential security exceptions, have been voiced by the US.
Some analysts have remarked that, while the agreement is a big step forward in incorporating digital trade laws into the WTO legal framework. This will require a strong backing from all members. This could be difficult, given certain governments’ unwillingness to support plurilateral accords over multilateral deals.
An important turning point in global trade has been reached with the historic accord on digital commerce. It aims to promote economic growth and digital transformation among member nations by establishing new regulations for digital transactions, strengthening consumer protection, and encouraging innovation.