- 1 Introduction to Problems and Solutions For Small Businesses
- 1.1 Ecommerce is Dependent on Trade
- 1.2 New Markets for Traders
- 1.3 Problems are also there to challenge you
- 1.4 Moratorium
- 1.5 The Internet Allows Everything
- 1.6 The problem of Defining Goods and Services
- 1.7 Is this “digital product” a right subject to the rules in force, or a service?
- 1.8 Negotiations
- 1.9 Share and Enjoy !
Introduction to Problems and Solutions For Small Businesses
Until recently, there were only two ways to buy a book: ordering from a catalog or from a book club – a method which is not always the most reliable or the fastest; either purchase in bookstores and payment in cash – the most common formula.
Today, it is possible to go to a virtual bookstore, view a book, read extracts from it, browse the store’s different shelves, make a choice, and then buy a book online.
You can deliver your product direct to your home, or another option is to download your product by using your laptop or PC.
Of course, other goods and services can be purchased in the same way. However, as the orders thus placed often have an international character.
Ecommerce is Dependent on Trade
In other words, eCommerce – that is, the production, advertising, sale, and distribution of products through telecommunication networks – is dependent on trade, while transforming its modalities.
It would help if you badly had eCommerce development solutions to take care of your business and solve annoying business problems.
Trade-in goods (computers) and services (telecommunications) is at the heart of this development, which is also helped by trade liberalization by making technology more affordable and accessible.
An instrument for the development of ECommerce is booming. From books to automobiles, an ever-growing number of products are now marketed, sold, and, increasingly, delivered online, even across borders.
New Markets for Traders
Although it is difficult to get precise figures on e-commerce, it is estimated to represent the US $ 5.5 trillion in 2020 (International Data Corporation, The Internet Economy, www.idc.com).
E-commerce business is producing new markets for traders large and small, including those in emerging countries. For much of the planet, however, ordering a book on the Internet is still fictional.
Well-designed trade policy can help bring technology closer to its users, thereby bridging the so-called “digital” divide. Most trade policymakers are aware that eCommerce can be a tool for development.
If a significant European engine manufacturer can today, via the Internet, outsourcing the manufacture of a component to a small Asian company whose market was hitherto local, because effective trade policies open up markets and facilitate access, thereby lowering the prices of infrastructure and technology.
Software engineering in India, claims to process in Jamaica, remote accounting in Zimbabwe: all these activities developed when technology allowed the exploitation of new business opportunities.
The opportunities for marketing, supply, and distribution thus created have also benefited traditional activities such as agriculture and crafts.
Therefore, new communication technologies can help businesses around the world overcome several obstacles to their development.
But engaging in commercial activities is still expensive. Computer scientists still need computers, telecommunications, and professional training.
Kenya’s coffee farmers have yet to get their products to consumers. However, it is now possible for them to follow market developments more closely and without intermediary help.
Problems are also there to challenge you
Despite the new possibilities offered by eCommerce, merchants and traders may face more legal problems such as low transport and distribution networks, inefficient customs procedures, or tariff barriers limiting access to important foreign markets.
Liberalization of trade in services can facilitate the modernization of infrastructure, while eCommerce and ICTs can help streamline customs procedures.
It would therefore be unfortunate if, at a time when e-commerce can offer consumers cheaper and more diverse products and open up broader markets for suppliers, it comes up against high tariffs or unnecessarily restrictive business practices.
There are still few obstacles to eCommerce on the Internet itself, mainly because of their establishment’s technological problems.
It is more challenging to prevent a consumer from logging in to an online bookstore and downloading a virtual book than it is to confiscate a book at a border crossing.
Therefore, one of the main objectives of trade policy has been not so much to remove existing barriers to prevent the establishment of new ones. Take, for example, tariffs.
Approved in May 1998, the WTO Declaration on Global ECommerce requested a moratorium on the demand of tariffs on electronic communications till the official meeting in Seattle the coming year.
This meeting has failed, the moratorium of the WTO remains in abeyance, for lack of an agreement. However, members of the Asia-Pacific Economic Cooperation Forum (APEC), which alone represent 40% of world trade, decided in June 2000 to impose a moratorium on customs duties applicable to electronic communications until the next ministerial meeting of the WTO, which must take place before the end 2001.
Thus, e-commerce can help developing countries play a larger role in world trade, but it does not make trade policymakers easy.
The repercussions it already has on international business practices are considerable; it has changed. The way transactions are initiated and managed, as well as the way in which the relationships between buyers and sellers are articulated.
The Internet Allows Everything
With him, time zones no longer matter: the Internet allows companies to produce, buy, and sell around the clock to all corners of the world.
The lines blur between the traditional economy and the new economy – automakers are using eCommerce, for example – between exportable and non-exportable products and between goods and services.
Like large multinationals, small and medium-sized enterprises can now play a role in the global market. As a result, trade policymakers struggle to keep pace with the rate at which suppliers appear in markets (let alone the rate at which new markets appear) and ensure that regulations governing these suppliers’ business activities are adapted and up to date.
The problem of Defining Goods and Services
Hybrid products eCommerce raises the problem of defining goods and services. When a book ordered online is then physically delivered to the purchaser, it is generally considered, for the purposes of international trade regulations, as a good.
Therefore, it is subject to international rules governing trade in goods, that is, i.e., the GATT (General Agreement on Tariffs and Trade).
Is this “digital product” a right subject to the rules in force, or a service?
On the other hand, if the book is sent electronically – that is to say downloaded into the computer – the debate remains open: is this “digital product” a right subject to the rules in force, or a service? , in which case it would fall under the GATS (General Agreement on Trade in Services)?
The question is all the more relevant since there are significant differences between the two regimes, particularly concerning the markets in which the product can be sold and the non-discrimination between domestic and foreign suppliers.
For example, discriminatory practices against foreign suppliers are generally prohibited in the case of trade in goods, while they are permitted in trade in services.
WTO member states have yet to agree on the regime to be applied to electronic products. Another question relates to commitments made under WTO agreements, particularly those relating to services. Are these commitments “technologically neutral” and therefore, also cover electronic delivery?
WTO members and commentators generally argue that when a country commits to opening its market to accounting services from abroad, for example, it opens it indifferently to services rendered by post, by fax or the Internet.
However, some wonder whether the specific commitments made in the Uruguay Round (which preceded the emergence of eCommerce) also cover the supply of services through electronic networks. is certain: liberal trade policies have boosted the development of eCommerce. They have lowered technology costs and facilitated access to basic information and communications technology (ICT) infrastructure.
By promoting the expansion of markets open to innovative firms, liberalization has stimulated activity, even in countries with small domestic markets. Multilateral trade agreements have promoted the development of eCommerce in a number of ways, directly or indirectly.
Examples that are worth mentioning:
- The Agreement on Information Technology (ATI), concluded in 1997 at the WTO, removed from January 1, 2000, the customs tariffs applicable to a whole series of ICT products. Essential for eCommerce, including computer hardware, software, telecommunications equipment, semiconductors, and other electronic components and materials.
On September 13, 2000, the ITA had already been signed by 38 participants (the 15 member countries of the European Union counting as a single participant), representing 93% of trade in information technology-related products.
On Basic Telecommunications Services (ATB) concluded in 1997, 69 countries committed to allowing foreign companies to provide telecommunication services in their own markets, which until then had been mostly stating monopolies.
By encouraging investment in new technologies and promoting pro-competitive regulatory principles, the ATB agreement has opened up to competition an estimated 95% of the global telecommunications market. ATB is no stranger to the drop in costs associated with telecommunications services.
Perhaps the essential effect of liberalization, however, has been the reduction in telecommunications costs. In fact, there is a very close correlation between imperfect competition in infrastructure, high access costs, and low internet usage.
Besides, competition between service and infrastructure providers, together with appropriate pricing and licensing policies, has improved the quality of infrastructure and access services in several countries.
Telecommunications services are not the only things to consider; however: many other factors drive e-commerce. Buying a book on the Internet can only be done through a set of related services – IT, telecommunications, financial, and banking services (for payments, in particular) and courier and transport services.
The negotiations on GATS 2000 will play a leading role in liberalizing this type of service and will further facilitate access to eCommerce. It is also hoped that these discussions will lead to measures that promote highly skilled workers’ mobility.
The GATS negotiations also provide an opportunity to advance unilateral regulatory reforms that countries have undertaken in essential service sectors, such as that of finance.
They give countries the opportunity to ensure the implementation of pro-competitive reforms, promote regulatory best practices, to apply the most-favored-nation clause to a more significant number of trading partners, and, finally, to make it clear to investors that the new policies will be maintained at all costs and thus to strengthen their confidence in the public authorities, by particularly in emerging market and transition economies, for example by ensuring that privatization programs will not be called into question all the time.
However, for the potential of cross-border e-commerce to be realized, much will need to be improved. International regulatory cooperation.
In areas as varied as the confidentiality of information, encryption, the development of secure payment systems, and taxation.