Digital Trade Regulation Sparks Tension At Ministerial Roundtable

By Akanimo Sampson

Governments and industry are grappling with tension between digital trade regulation and on-the-ground realities of data collection and use at the UNCTAD eCommerce Week ministerial roundtable on trade, data and digitalisation.

The session paired the two to address pressing digital economy prospects and problems at a crucial juncture where both e-commerce and data regulation are needed but require extraordinary global collaboration.

Navigating this complex digital terrain is the preserve of public sector, policy-makers and the private sector and requires ample inputs from all to make it work.

The issues are far from simple.

They also have knock-on effects across value chains, countries, consumers and all commerce – and they impact everything from the nebulous, such as trust, to the nefarious, such as hacking and data theft.

The data-driven economy gives rise to new opportunities for wealth creation and addressing sustainable development challenges. It also raises concerns such as data privacy and security, the regulation of cross-border data flows, market concentration and taxation.

As such, rules are important, attendees at the fifth UNCTAD eCommerce Week, at the United Nations’ European headquarters in Geneva, Switzerland on 2 April heard. 

“As with other areas of trade, rulemaking about data and e-commerce will need to achieve a balance between potential trade disciplines and national policy objectives,” said UNCTAD Deputy Secretary-General Isabelle Durant.

Understanding how digital data and trade interact requires different perspectives to bring a complex picture into focus.

The African Union’s (AU) infrastructure and energy commissioner, Amani Abou-Zeid, said aside from physical infrastructure, mobile money, and a better understanding of the informal economy, one of the biggest challenges in Africa is data.

The lack of it, how it differs, and the inability to analyse it when it does exist, are all concerns.

“When we talk about data for trade, there is an assumption that this data exists,” Ms. Abou-Zeid said. “Lack of up-to-date data is recognized as one of the impacts of lower intra-African trade. When there is data, it can differ from agency to agency and sometimes even within agencies.”

The AU is working to address the data issue, she said, saying it would establish a trade observatory located within the AU Commission with funding from the International Trade Centre and the European Union.

The observatory would deal with the issue of not having a central trade data repository at a continental level and quantitative information to make decisions.

The term data though, said Deborah Elms, founder and executive director of the Asian Trade Centre, has been used too loosely, which makes it confusing and complicated. “Data is used to describe everything, so it ends up describing nothing,” she said. “We have to be more precise.”

“The more complicated you make it, the more difficult you make it for small businesses operating in the digital world.”

With data and trade at the core of the wide-ranging discussion, the definitional issue was central.

Governments are grappling with this, said Lantosoa Rakotomalala, Madagascar’s industry, trade and crafts minister. “We have all the challenges relating to (digital) connection, data storage and ensuring this data is secure.

“But on the other hand, we also have research and development policies which today are not yet allowing us to fully appreciate the usage of data in terms of economic development,” she said, but added there were costs especially in machine learning, new equipment and the rights to a private life.

She said an additional challenge is identifying how to process and analyze data in Africa.

The case of Paraguay is heartening for other developing nations, but also demonstrates that connectivity alone is not enough.

Pedro Mancuello, Paraguay’s vice minister of trade, said while more that 86% of people in Paraguay have internet, only 14.3% buy online. This connectivity is a  testament to its investment in digital infrastructure, but also a portend of what’s required to get entrepreneurs selling, and consumers buying, online.

But getting online is a challenge for many says, said Joãozinho Mendes of the West African Economic and Monetary Union (UEMOA).

“Because of the digital divide an awful lot of our producers are simply not able to have such a high online profile for economic, infrastructure or indeed educational reasons.”

He said he doesn’t believe data collection is a bad thing and contributes to development.

“Digital technologies do generate a great deal of information, but we need to be in a position to process, collect, analyses, and store it to implement development strategies. Hence the need to develop competencies that allow us to manage data,” Mr. Mendes said.  

On the industry and civil society side, there was emphasis on the difference between consumer and business data and its use.

Consumers International’s director general Helena Leurent said data benefits consumers daily, citing the example of TripAdvisor.

But she said there is a dark side that needs to be considered.

“The value that companies and nations gain from data originates from individuals. Our ability to create a rich personal profile which helps aid decision-making and recommendations is the same thing that then creates the challenges.”

“For consumers there is a fear that (their data) is being used against them, which stops them wanting to engage in a digital world,” she said.

Meanwhile Ms. Elms’ view is that while big data may be the preserve of big tech companies, the 2,500 companies in her network simply don’t see business information as data that needs major protections.

“It’s just information that is needed to do business. If you want to move goods from country A to country B, companies need to be able to use your address and credit card to do that,” Ms. Elms said.

Indeed, data can be a force for good, a point made by Xiaofei Yao, founder and CEO of Rogrand E-commerce, China’s largest pharmaceutical supply chain management company.

She said: “Data has become an essential thing for business.”

“Many describe data as the oil of the future – but it’s more than just oil, it’s the engine and currency in the digital economy – and is much more powerful than its fiscal counterparts as it helps us understand more about ourselves, our country and our civilization.”

“It will fundamentally enhance the efficiency and effectiveness of production and services.”

“We are all desperate to get more data. Despite the concerns we should look into the uniqueness of the data to overcome these, and design by industry and sector around the purpose of the data use.”

The meeting agreed data can be a force for good, but it needs to be better defined and understood ahead of regulation efforts, which could damage the engines of economic growth it aims to help.

 “Whatever the outcome of trade negotiations, it is clear that more support is needed to ensure that no one is left behind in the digital era,” Ms. Durant added.

The fifth edition of e-Commerce Week – an annual gathering that draws leading e-commerce figures, start-ups, policy makers and officials from around the world – is taking place in Geneva from 1 to 5 April. The theme of this year’s week, which comprises dozens of sessions, is From Digitalisation to Development.