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The United Nations Conference on Trade & Development (UNCTAD), in its latest trade development report, has cautioned developing countries against a “premature’’ commitment to rules on e-commerce, where, it believes, the influential actors are driven by narrow business interests.
The report also warned that trade wars were a symptom of a degraded economic system and multilateral architecture, and the consequences of any serious escalation in the recent round of tariff hikes could have more damaging consequences in the medium term while trade growth in 2018 could be at the same level as 2017.
As per UNCTAD’s projections, India’s and China’s economies were expected to grow at 7 per cent and 6.7 per cent respectively in 2018, while the world average growth would be 3.1 per cent, which was the same in 2017. “While the global economy has picked up since early 2017, growth remains spasmodic, and many countries are operating below potential,” said the UNCTAD report titled ‘Power, Platforms and The Free Trade Delusion’ released on Wednesday.
Elaborating on the digital economy taking shape around the world, the recommendations of the report endorse India’s stand on mandatory data localisation and lack of support for negotiations on e-commerce rules at the World Trade Organization (WTO).
“Developing countries will need to preserve, and possibly expand, their available policy space to implement an industrialisation strategy that should now include digital policies around data localisation, management of data flows, technology transfers and custom duties on electronic transmissions,” according to the report.
Caution on pacts
Pointing out that there was still not much clarity on what rules and regulations would be required to manage digitisation and e-commerce in a country and around the world, the report cautioned that multilateral or bilateral pacts on the sector should not be forged by developing nations in a hurry.
“The international community is just beginning a dialogue on the required rules and regulations to manage all this, and agreement still needs to be reached on which issues relating to the digital economy are in the realm of the WTO and which fall under other international organisations,” the report said.
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