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WTO E-commerce E Negotiations African Strategies for Bilateral and Multilateral Trade in Services Negotiations ILEAP Workshop Accra, Ghana Merch 9-12, March 2005 by: Abdoulaye Ndiaye Outline Definition
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WTO E-commerce E Negotiations African Strategies for Bilateral and Multilateral Trade in Services Negotiations ILEAP Workshop Accra, Ghana Merch 9-12, March 2005 by: Abdoulaye Ndiaye Outline Definition and concepts State of play of Ecommerce in Africa Ecommerce Opportunities in Africa Key factors of success for Ecommerce Advantages of Ecommerce Multilateral Negotiations on Ecommerce 1. Definition and concepts Technological Convergence Ecommerce Typology By products and services By type of activities (B2B, B2C, B2G, C2C, G2C) Ecommerce typology Tangible goods: opportunities for agricultural products (auctions of coffee), handicraft products; ; but constraints in transport logistics and electronic payment systems Non tangible goods: opportunities for cultural products (music, movies,etc.) Services: Development of Teleservices or outsourcing of services in Education, Health, Marketing, Data Processing,, Business Processes, Software Development, Call Centers,, etc. Ecommerce Typology G2G egovernment G B2G G2C B2B B ebusiness B2C C C2C Ecommerce (EC) Typology by B2B Ecommerce throughout the world is dominated by transactions According to Forrester Research,, in 2001 B2B Ecommerce turnover was Bn $995 (93.3%( 93.3% of EC in the USA) In the EU, this figure was between Bn $185 and Bn $200 in 2002 In East and Central Europe the figure was Bn $4 in 2003 In Asia-Pacific region the turnover moved from Bn $120 in 2002 to Bn $200 on 2003 and it was expected to reach Bn $300 in In Latin America the turnover was estimated at Bn $6.5 in 2002 and at Bn $12.5 in 2003 In Africa, the turnover was estimated at Bn $0,5 in 2002 and Bn $0,9 in 2003, in which South Africa counted for 80%. 2. State of play of EC in Africa B2C: very few countries are operational in this field: Ghana, Ethiopia, Senegal, South Africa.. But most African websites are hosted outside the continent due to the low quality of Internet connections and the high cost of website hosting. B2B: fast development during these last four years for a growing number of African countries such as Senegal, Ghana, Togo, South Africa,, Kenya, Ouganda, Mauritius, Morocco, Tunisia Identified activities of outsourcing: Call Centers, Telemarketing,, Software Development,, Data Processing, Accounting,, etc. Outsourcing Markets : Canada, France, United States, United Kingdom. 3. EC Opportunities for Africa High and Intense Competition in Developed Countries Need for Competitivity gains Outsourcing of BackOffice services in order to focus on their core business EC Opportunities for Africa Comparative Advantages in labor costs in Africa + Quality of Labor in Africa + Quality of ICT Infrastructure + Capacity to meet Outsourcing Market Standards 4. Key factors of success for Ecommerce Necessity to have a good quality of Internet infrastructure (high( bandwidth) and low access costs Availability of cyberparks,, Technopoles, Incubators (Ghana, Tunisie, Sénégal) S Political Stability Strong support from the Government Availability of financial resources to support investments Availability and flexibility of slilled labor Being fluent in the language of the client Having an office or agent in the outsourcing country (subsidiary or infomediary) 5. Advantages of EC Employment creation Capacity building Gains in efficiency and productivity in the production and distribution value chain Transfert of technology Diversification Strength of Africa Progressive Liberalization of the Telecommunications sector Legal status of competition of telecom segments, mid-2003 Monopoly Competition Number of Regulation Agencies Local Long distance International Cellular ISPs mid-2003 Strength of Africa Possibilities to speak various languages (English, French, Portuguese, etc.) Technology advances that contribute to fill in the digital gap: Wi-Fi Wimax (70 Mbps on 50 km) Various offers of Satellite connections Availability of Submarine cables 6. Multilateral Negotiations on Ecommerce No negotiation started yet in the WTO therefore there are many meetings and technical notes relating the positions of various countries especially developed countries Issues raised within The WTO: Classification of EC content (HS, W/120, CPC) Fiscal consequences of EC (how to apply VAT and customs duties on digital products?) Conflict Resolution, Jurisdiction and Applicable Law, Various aspects of EC are related to other Agreements: : GATT, GATS, TRIPS, TBT, Agreement on Information Technology 7.1 Classification of EC Content Harmonized System (HS) of WCO Central Product Classification of the United Nations (CPC) WTO W/120 document Where to classify digital products? Among goods (GATT) or among services (GATS) What will be the consequences? 7.2 Fiscal implications of EC What will be the consequences of EC on customs revenues for African countries? What will be the effects of zero tariffs on EC on these revenues? How to define fiscal policy that fit with EC? 7.3 Conflicts Resolution, Jurisdiction and Applicable Law Mechanisms of Conflict Resolution in EC Issues to be addressed: Distance between parties Cultural and language differences Difficulties to determine the applicable law and jurisdiction Need to adapt the regulatory framework UNCITRAL Model Law (electronic signatures and contracts) Classical Mechanisms of Conflicts Resolution in International Trade don t t apply here Necessity to find new alternative Alternative Dispute Resolution (ADR) Online Dispute Resolution (ODR) 7.4 Market Access Constraints in EC Mode 3: African SMEs are facing problems in meeting conditions raised by Developed countries to access their market. Ex: minimum investment required to be established in the country Mode 4: major constraint for African countries because of immigration issues raised by developed countries GATS VISA or BUSINESS VISA African countries must team up in order to bring WTO members to adopt the concept of GATS VISA or at least negotiate a Business Visa Mode 4 (contd( contd ) Countries that address the issue of mode 4 seem to limit the temporary movement of persons to staff and business African countries must make a list of qualifications on different levels (graduates, under graduates and employees) that would move temporarily to target makets for business purposes African countries must also raise the issue of social security of temporary workers who stay between 2 to 5 years Negotiations strategies Requests: Remove Entry barriers to targeted especially in mode 4 and minimum investments (mode 2). Make the African outsourcing business sustanable: prevent any measure that would forbid or limit this activity Offers: Open services subsectors which can attract FDI and make foreign investments more secure (Ex: Professional services) Address the issue of national treatment CONCLUSION There are many opportunities in EC in Africa Need to prepare request to strengthen African outsourcing business and make it more sustainable in developed countries Need to develop outsourcing at the national and regional level in order to better penetrate the international market
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