E-commerce as a tool for development : analytical …...CONTENTS •Context •Defining e-commerce •Analysing digital trade : challenges and approaches •Regional trends in digital

E-COMMERCE AS A TOOL FOR DEVELOPMENT : ANALYTICAL AND REGIONAL PERSPECTIVE

ARUN JACOB

CONTENTS

• Context

• Defining e-commerce

• Analysing digital trade : challenges and approaches

• Regional trends in digital trade: overview

• PTAs in the region and digital trade

• Emerging policy issues

• Implications for sustainable development

CONTEXT

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Per

100 inh

abitant

s

Key ICT Indicators

Mobile subscription -Asia-Pacific

Mobile subscription-World

Mobile broadband -AsiaPacific

Mobile broadband- World

Internet users -Asia Pacific

Internet users -World

Fixed broadbandsubscription-Asia pacific

Fixed broadbandsubscription-World

Source : ITU

300

16000

2000 2013

Global E-commerce Market

Billions (USD)

Source : UNCTAD (2015)

DEFINING E-COMMERCE

WTO (1998)

“electronic commerce' is understood to mean the production, distribution, marketing, sale or

delivery of goods and services by electronic means”

UNTCAD Information Economy Report 2015

“purchases and sales conducted over computer networks…can involve physical goods as

well as intangible (digital) products and services that can be delivered digitally”

OECD (2013)

“the sale or purchase of goods or services, conducted over computer networks .. ., but the

payment and the ultimate delivery of the goods or services do not have to be conducted

online”

TYPES OF E-COMMERCE

Business to

Business (B2B)

-15 trillion US$

(2013)

-Highest market

share (90%)

Business to

Consumers (B2C)

-1.2 trillion US$

(2013)

-fastest growth

Business to

Governments (B2G)

-Public e-

procurement

Consumers to

Consumers (C2C)

-modern day

classified ads

Egs. E-bay, Taobao

ANALYTICAL ISSUES

• Lack of an official commonly agreed definition

• Limited official statistics

• Highlights the overall data limitations of international trade in services

• Need to depend on proxy variables

• Reliance on data provided by big private firms or industry associations

• Difficulty with cross-country comparisons

E-COMMERCE PERFORMANCE INDICES

• Most of the available e-commerce

performance indices exclude trade

data

• Focus on ICT, logistical and financial

infrastructure access data

QUANTIFYING DIGITAL TRADEExample Analytical strategy used in

APTIR 2016 forthcoming

Digital infrastructure goods Computers, network devices,

and mobile phones

• Trade in IT goods

Digital infrastructure service Basic and value-added

telecommunications services,

and computer and related

services.

• Share of IT infrastructure

services embedded in

exports (TiVa)

• International trade in

services Digitizable products Software, books, music, movies,

and games

Electronically enabled

services

Insurance, customer care

Classification source : Markle Foundation (2005)

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

ITA Extension (effective after2016)

Parts and accessories of ITequipment

Data storage media and softwareprovided on physical media

Instruments and apparatus

Seminconductor manufacturingequipment

Semiconductors

Telecommunication equipment

Computers

EXPORTS OF DIGITAL-INFRASTRUCTURE GOODS

• Dominance of exports from

China and East Asian

economies in the Asia-

Pacific region.

• AP account for more than

64% of the world exports

on the original ITA product

list and 57.5% of

products covered by

the extension of ITA.

WORLD EXPORTS OF DIGITAL-INFRASTRUCTURE GOODS

Source: APTIR 2016 forthcoming

-

10

20

30

40

50

60

70

80

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Printed materials

Sound Media

Software

Games

Movies

TRENDS IN DIGITIZABLEPRODUCTS

• 0.3% of world

merchandise trade in

2014

• Asia-Pacific economies

account for 30% of

world exports

• Significant

underestimation of trade

WORLD EXPORTS OF DIGITIZABLE GOODS

Source: APTIR 2016 forthcoming

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

Edu

cati

on

Pu

lp, p

aper

, pap

er p

rod

uct

s,…

Text

iles,

tex

tile

pro

du

cts,

…

Wo

od

an

d p

rod

uct

s o

f w

oo

d…

Re

al e

stat

e a

ctiv

itie

s

Ru

bb

er a

nd

pla

stic

s p

rod

uct

s

Oth

er n

on

-met

allic

min

era

l…

Re

nti

ng

of

mac

hin

ery

an

d…

Mo

tor

veh

icle

s, t

raile

rs a

nd

…

Ho

tels

an

d r

est

aura

nts

Foo

d p

rod

uct

s, b

eve

rage

s an

d…

Min

ing

and

qu

arry

ing

Po

st a

nd

tel

eco

mm

un

icat

ion

s

Co

nst

ruct

ion

Agr

icu

ltu

re, h

un

tin

g, f

ore

stry

…

Wh

ole

sale

an

d r

etai

l tra

de;

…

Oth

er t

ran

spo

rt e

qu

ipm

ent

Fab

rica

ted

met

al p

rod

uct

s

Mac

hin

ery

an

d e

qu

ipm

en

t, n

ec

Tran

spo

rt a

nd

sto

rage

Bas

ic m

etal

s

Elec

tric

al m

ach

ine

ry a

nd

…

Ch

em

ical

s an

d c

he

mic

al p

rod

uct

s

Oth

er c

om

mu

nit

y, s

oci

al a

nd

…

Co

mp

ute

r, E

lect

ron

ic a

nd

…

R&

D a

nd

oth

er

bu

sin

ess

acti

viti

es

Elec

tric

ity,

gas

an

d w

ater

su

pp

ly

Man

ufa

ctu

rin

g n

ec; r

ecyc

ling

Fin

anci

al in

term

ed

iati

on

Co

mp

ute

r an

d r

ela

ted

act

ivit

ies

Hea

lth

an

d s

oci

al w

ork

Asia-Pacific

CHANGE IN THE SHARE OF DIGITAL CONTENT IN EXPORTS BY SECTOR , 1995 TO 2011

• Asia-pacific increase in share

of digital content in exports

was faster than the world

average in most industries.

• Globally, import share of

digital infrastructure services

in total exports increased

from 14% in 1995 to 22% in

2011.

• For Asia-Pacific exporters,

the import share is higher

than the world average (23%

in1995 to 25% in 2011)

Source: APTIR 2016 forthcoming

SHARE OF DIGITAL CONTENT IN EXPORTS & IMPORTS

TRENDS IN TRADE IN DIGITAL INFRASTRUCTURE SERVICES

• Intraregional digital trade opportunity is growing, but major markets for digital-

infrastructure services remain outside the region

• From 1995 to 2011, intraregional imports of digital-infrastructure services grew faster than

the imports from non-regional partners and domestic sourcing

• China has caught up with USA as an important user of telecommunication services to

facilitate its export activities

• Links between country’s competitiveness in digital-infrastructure services and export

competitiveness ?

• Need for open trade environment

PREFERENTIAL TRADE AGREEMENTS AND PROVISIONS FOR DIGITAL TRADE

• Out of 155 PTAs analysed 37

PTAs recognized some aspects

of digital trade/e-commerce

• Since 2010, about 30 % of

PTAs initiated (and currently

negotiated ) have special

provisions for e-commerce

• 1/3 has a chapter on e-

commerce

• recognition of importance of e-

commerce; call for greater

collaboration; sharing of best

practices; and to work towards

removal of barriers in cross

border digital trade

Source: ESCAP calculation based on APTIAD

Note: * includes PTAs currently under negotitation

EMERGING THEMES IN DIGITAL TRADE POLICIES

• Open trade and investment rules

• Localization rules, ‘de-minimis’ rules

• Complementary national strategies

• Data openness

• Cyber laws, privacy laws, consumer protection laws,

• hard and soft infrastructure to enable digital trade

• New areas of international cooperation

IMPLICATIONS FOR SUSTAINABLE DEVELOPMENT

• Some evidence that e-commerce has reduced spatial inequality in some parts of

world

• The risk of ‘digital divide’ transforming into a development divide

• Need for further research and continuous monitoring on the impacts on existing

structures of production and trade

• Impact on environment

• Large data centers use up energy equivalent of small US towns

THANK YOU

Arun Jacob (PhD)

Trade Policy and Analysis Section

Trade, Investment and Innovation Division

United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)

Email : [email protected]