WTO Countries Sign Global eCommerce Agreement That Would Ban Tariffs

Several dozen World Trade Organization (WTO) countries have signed a sweeping agreement governing global eCommerce.

The agreement, adopted Friday (July 26), is the first-ever set of global digital trade rules endorsed by the WTO. It calls for a prohibition on customs duties on electronic transactions and also includes rules for the recognition of e-signatures and safeguards against online fraud.

“These rules, once integrated into the WTO framework, will be fundamental for the development of global digital trade, setting a common ground and avoiding fragmentation,” Valdis Dombrovskis, the European Union’s executive vice-president and commissioner for trade, said in a news release.

“This agreement will benefit businesses and consumers, contribute to integrating developing and least developed countries in the global digital economy, and help bridge the digital divide.”

The product of five years of negotiations, the agreement provides protection against online fraud and misleading product claims, and calls on the participating countries to place limits on spam and protections for personal data.

Research by PYMNTS Intelligence shows the impact fraud can have on the eCommerce space, with 47% of eCommerce businesses surveyed saying they lost both revenue and customers due to fraud in the past year, while 68% also said they saw a decline in customer satisfaction, which they put down to to security breaches.

“It is little wonder then that 95% of eCommerce merchants said they have either begun revamping their anti-fraud capabilities or are committed to doing so soon,” PYMNTS wrote earlier this year. “Overall, 41% have already begun enhancing their anti-fraud protections while another 54% plan to do so within the year. Only about 5% plan to but lack a timeline.”

According to a report by Bloomberg News, the U.S. government calls the WTO agreement a good first step but said more work is needed.

“As the United States has repeatedly communicated to the co-conveners and participants, the current text falls short and more work is needed, including with respect to the essential security exception,” Maria Pagan, the White House representative at the WTO, said in a statement.

The report also includes comments from Jake Colvin, president of the Washington-based National Foreign Trade Council, praising the WTO’s work but criticized the lack of U.S. leadership.

“Other countries will step into a leadership vacuum when the United States steps away,” Colvin told Bloomberg. “But the fact that other major economies felt emboldened to move on digital trade without the United States is extraordinary.”