WTO E-commerce
Negotiations
African Strategies for Bilateral and Multilateral Trade in
Services Negotiations
ILEAP Workshop
Accra, Ghana
Merch 9-12, March 2005
by:
Abdoulaye Ndiaye
Outline
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Definition and concepts
State of play of Ecommerce in Africa
Ecommerce Opportunities in Africa
Key factors of success for Ecommerce
Advantages of Ecommerce
Multilateral Negotiations on Ecommerce
1. Definition and concepts
Technological Convergence
Ecommerce Typology
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By products and services
By type of activities (B2B, B2C, B2G, C2C,
G2C)
Ecommerce typology
Tangible goods: opportunities for agricultural
products (auctions of coffee), handicraft
products; but constraints in transport logistics
and electronic payment systems
Non tangible goods: opportunities for cultural
products (music, movies,etc.)
Services: Development of Teleservices or
outsourcing of services in Education, Health,
Marketing, Data Processing, Business Processes,
Software Development, Call Centers, etc.
Ecommerce Typology
G2G
eGovernment
G
B2
G
C
G2
B
C
B2B
B2C
eBusiness
C2C
Ecommerce (EC) Typology
Ecommerce throughout the world is dominated by B2B
transactions
According to Forrester Research, in 2001 B2B Ecommerce turnover
was Bn $995 (93.3% of EC in the USA)
In the EU, this figure was between Bn $185 and Bn $200 in 2002
In East and Central Europe the figure was Bn $4 in 2003
In Asia-Pacific region the turnover moved from Bn $120 in 2002 to
Bn $200 on 2003 and it was expected to reach Bn $300 in 2004.
In Latin America the turnover was estimated at Bn $6.5 in 2002 and
at Bn $12.5 in 2003
In Africa, the turnover was estimated at Bn $0,5 in 2002 and Bn $0,9
in 2003, in which South Africa counted for 80%.
2. State of play of EC in Africa
B2C: very few countries are operational in this field:
Ghana, Ethiopia, Senegal, South Africa. But most
African websites are hosted outside the continent due to
the low quality of Internet connections and the high cost
of website hosting.
B2B: fast development during these last four years for a
growing number of African countries such as Senegal ,
Ghana, Togo, South Africa, Kenya, Ouganda, Mauritius,
Morocco, Tunisia…
Identified activities of outsourcing: Call Centers,
Telemarketing, Software Development, Data Processing,
Accounting, etc.
Outsourcing Markets : Canada, France, United States,
United Kingdom.
3. EC Opportunities for Africa
High and Intense Competition in Developed Countries
Need for Competitivity gains
Outsourcing of BackOffice services in order to
focus on their core business
EC Opportunities for Africa
Comparative Advantages in labor costs in Africa
+
Quality of Labor in Africa
+
Quality of ICT Infrastructure
+
Capacity to meet Outsourcing Market Standards
4. Key factors of success for
Ecommerce
Necessity to have a good quality of Internet
infrastructure (high bandwidth) and low access costs
Availability of cyberparks, Technopoles, Incubators
(Ghana, Tunisie, Sénégal)
Political Stability
Strong support from the Government
Availability of financial resources to support investments
Availability and flexibility of slilled labor
Being fluent in the language of the client
Having an office or agent in the outsourcing country
(subsidiary or infomediary)
5. Advantages of EC
Employment creation
Capacity building
Gains in efficiency and productivity in the
production and distribution value chain
Transfert of technology
Diversification
Strength of Africa…
Progressive Liberalization of the Telecommunications sector
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90
Number of Regulation
Agencies
Legal status of competition of
telecom segments, mid-2003
80
70
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105
Monopoly
Competition
85
60
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55
30
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26
33
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Strength of Africa…
Possibilities to speak various languages
(English, French, Portuguese, etc.)
Technology advances that contribute to fill
in the digital gap:
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Wi-Fi
Wimax (70 Mbps on 50 km)
Various offers of Satellite connections
Availability of Submarine cables Î
6. Multilateral Negotiations on
Ecommerce
No negotiation started yet in the WTO therefore
there are many meetings and technical notes
relating the positions of various countries
especially developed countries
Issues raised within The WTO:
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Classification of EC content (HS, W/120, CPC)
Fiscal consequences of EC (how to apply VAT and
customs duties on digital products?)
Conflict Resolution, Jurisdiction and Applicable Law,
Various aspects of EC are related to other
Agreements: GATT, GATS, TRIPS, TBT,
Agreement on Information Technology
7.1 Classification of EC Content
Harmonized System (HS) of WCO
Central Product Classification of the
United Nations (CPC)
WTO W/120 document
Where to classify digital products? Among
goods (GATT) or among services (GATS)
What will be the consequences?
7.2 Fiscal implications of EC
What will be the consequences of EC on
customs revenues for African countries?
What will be the effects of zero tariffs on
EC on these revenues?
How to define fiscal policy that fit with EC?
7.3 Conflicts Resolution,
Jurisdiction and Applicable Law
Mechanisms of Conflict Resolution in EC Î
Issues to be addressed:
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Distance between parties
Cultural and language differences
Difficulties to determine the applicable law and
jurisdiction
Need to adapt the regulatory framework Î
UNCITRAL Model Law (electronic signatures and
contracts)
Classical Mechanisms of Conflicts Resolution in
International Trade don’t apply here Î Necessity
to find new alternative
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Alternative Dispute Resolution (ADR)
Online Dispute Resolution (ODR)
7.4 Market Access Constraints in EC
Mode 3: African SMEs are facing problems in
meeting conditions raised by Developed
countries to access their market. Ex: minimum
investment required to be established in the
country
Mode 4: major constraint for African countries
because of immigration issues raised by
developed countries Î GATS VISA or
BUSINESS VISA
African countries must team up in order to bring
WTO members to adopt the concept of GATS
VISA or at least negotiate a Business Visa
Mode 4 (contd’)
Countries that address the issue of mode 4
seem to limit the temporary movement of
persons to staff and business
African countries must make a list of
qualifications on different levels (graduates,
under graduates and employees) that would
move temporarily to target makets for
business purposes
African countries must also raise the issue of
social security of temporary workers who
stay between 2 to 5 years
Negotiations strategies
Requests:
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Remove Entry barriers to targeted especially in mode
4 and minimum investments (mode 2).
Make the African outsourcing business sustanable:
prevent any measure that would forbid or limit this
activity
Offers:
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Open services subsectors which can attract FDI and
make foreign investments more secure (Ex:
Professional services)
Address the issue of national treatment
CONCLUSION
There are many opportunities in EC in
Africa
Need to prepare request to strengthen
African outsourcing business and make it
more sustainable in developed countries
Need to develop outsourcing at the
national and regional level in order to
better penetrate the international market