Agreeable India may push E-commerce agenda

["Irfan Khan" <KhanIA@super.net.pk>]

[originally posted on the Cybercom India mailing list by Frederick 
Noronha <fred@GOA1.DOT.NET.IN>]



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Agreeable India may push E-commerce agenda
Our Correspondent       


PARIS, July 26: The sudden turnaround announced by India on its long- 
standing opposition to keeping e-commerce free from any customs duty 
has boosted the prospects of a general agreement on how to conduct 
negotiations over this issue when it is taken up at the Millennium 
Round of WTO. The negotiations are slated to begin soon after the 
Seattle Ministerial Conference from November 30 to December 3. The 
turnaround has, however, also raised doubts whether India has not 
handed over its trump card for the Seattle negotiations. So far, 
India had been opposing the idea of continuing with a standstill that 
was agreed upon at the end of the Uruguay Round five years ago.   

The standstill basically meant that all countries will keep the 
electronic commerce transmissions free of any customs duty or any 
other tariff barriers for a long period time, or at least till the 
end of the negotiations that commence post-Seattle. However, last 
month, in a sudden announcement, the government decided to support 
the freeze. And ifthe turnaround itself sounded odd, the reason 
behind it is close to bizarre. "The United States has supported us 
throughout the Kargil crisis and as a gesture of goodwill, we will 
drop our opposition to their proposals on e-commerce," was how the 
commerce ministry officials put it and earned the ridicule of several 
international observers.   

"It is like a dejected lover who will give up anything in order to 
have a glance from her paramour. It appears that India had been 
feeling ignored by the United States and even a hint of a recognition 
from US is enough to have India on her knees," said an observer.   

International experts say that e-commerce will be the single most 
important issue for the United States in the forthcoming Millennium 
Round and most other countries would stand to derive tremendous 
benefits from this. "The US has already expressed its keenness to 
have the e-commerce negotiations get underway quickly and conclude 
without much ado, as soon as possible. And they have also conceded, 
ratherimplicitly, that they would give up anything or almost anything 
in order to have e-commerce through on the Seattle agenda. This means 
that all other countries can draw up their shopping lists for rest of 
the agenda and then ensure that the Americans support them, in turn," 
said an expert on international negotiations.   

International experts feel, developing countries like India can 
extract major benefits from their opposition to e-commerce. India, 
South Korea and Brazil have been leading the opposition and 
international observers feel that these countries could push their 
opposition till the last minute and then extract a real concession 
before giving in. India has also been saying that safety and 
encryption rules, especially those prevalent in the US, are barriers 
to trade.   

"I have a feeling it is a negotiating stance, rather than real 
opposition and quite like the last time around, India may come on 
board literally at the last minute, with some handsome bargains," 
said an expert. But that is possible,only if India does not make any 
more emotional blunders like the one over Kargil.   

The European Commission -- the other major promoter of the idea -- 
has clearly indicated where it stands and how far it will go. "We 
have been saying that there should be a balanced package of basic 
governing principles. We would like to prepare a package for the 
final negotiations.   

But we are not prepared to give up anything in return for an 
agreement on e-commerce. It is absolutely way down on our priority 
list,'' said a senior EC official.   

The EC draft proposal for negotiations lists nine basic principles, 
which include a definition of e-commerce, requiring member states to 
provide market access, transparency and maintain a competitive 
environment by doing away with the monopoly of the internet service 
providers. The EC has also brought in a point of technical assistance 
for developing countries in order to promote e-commerce there.   

This paper, along with those prepared by other developed countries 
including the US,will be circulated in the United States next week in 
Geneva amongst the WTO members. And the developing countries can 
extract several concessions even at that stage.   

The EC itself is looking for several concessions from the United 
States on e-commerce. "We would like something in return in the areas 
of maritime and air transport, where the US needs to liberalise its 
markets and allow access to foreign players," the EC official said.   

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