The world trade organization (WTO) secretariat recently released a report on the impact of the covid-19 outbreak on e-commerce, including cross-border trade. The report notes that the use of e-commerce is increasing as consumers adapt to measures of blockade and social alienation. The report also draws attention to challenges such as the need to bridge the digital divide within and between countries.
In addition to highlighting the growth of e-commerce during the covid-19 crisis, the report explores the measures governments are taking to promote e-commerce and some of the challenges they face. Governments have worked to increase network capacity, encourage the availability of expanded data services at low cost or for free, and reduce or eliminate transaction costs for digital payments and mobile remittances. The report also explores the ongoing wto discussions on e-commerce and how continued implementation of the wto trade facilitation agreement will address some of the challenges posed by the covid-19 pandemic.
According to the report, lessons learned from the covid-19 crisis can further promote global cooperation in e-commerce, which will help facilitate cross-border flows of goods and services, narrow the digital divide and level the playing field for small businesses.
Key points of the report are as follows:
Social outreach, lockdowns and other measures in response to the covid-19 pandemic have led to an increase in consumer online shopping, social media use, voip and conference calls, video and movie streaming.
This has led to a surge in business-to-consumer sales and an increase in business-to-business e-commerce. The growth in B2C sales is particularly evident in online sales of medical supplies, necessities and food.
Demand for Internet and mobile data services has also increased. Both operators and governments urgently need to adjust network capacity and spectrum to accommodate the shift to online activity. However, demand for some services, such as travel services, which have a lot of online content, has fallen.
E-commerce for trade in goods and services has also been adversely affected by the same factors that have contributed to the overall disruption in supply and demand. This interference results in delivery delays or outright cancellations. Other challenges related to e-commerce have emerged during the pandemic, or have been exacerbated. These include price fixing (that is, raising prices to unreasonably high prices), product security issues, deceptive practices, cyber security issues, the need to increase bandwidth, and development-related issues.
The pandemic highlights the need to bridge the digital divide both within and between countries, given the central role played by the digital economy during the crisis. In developing countries, in particular the least developed countries, many traditional barriers have become more prominent and continue to hinder the greater participation of small producers, sellers and consumers in e-commerce activities. This highlights the need to provide effective and affordable information and communication technology services, such as telecommunications, computer and other information technology services, as well as emerging technologies.
Governments are taking new steps, and the private sector is taking action to address and ensure that e-commerce can help mitigate some of the challenges in the fight against the virus. These measures include increasing network capacity, expand the data provided in the form of little or no charge service, reduce or cancel the digital payment and mobile remittances of transaction costs, improve service delivery and other logistics, using digital tools implement measures and spread information, promote the remote medical care, and using mail tunnels technology monitoring.
The global nature of the covid-19 outbreak and its impact on e-commerce may encourage greater international cooperation to further develop online procurement and supply policies. The pandemic has shown that e-commerce can be an important tool/solution for consumers. E-commerce can also support small businesses and become an economic driver of domestic growth and international trade by increasing economic competitiveness.
The pandemic has highlighted the importance of digital technology, but it has also exposed weaknesses around the world. The resulting experience and lessons relate to various discussions within the wto, including those relating to e-commerce. These discussions could benefit from strengthening international cooperation to facilitate the cross-border movement of goods and services, to narrow the digital divide and to create a level playing field for micro – and small – and medium-sized enterprises.