Unlocking global e-commerce opportunities for Bangladeshi women at the WTO
With MC14 approaching, Bangladesh must step up its involvement in global trade talks to unlock opportunities for millions of women entrepreneurs to compete on a global stage
Since Covid-19, e-commerce has gained momentum, particularly for women entrepreneurs. According to the e-Commerce Association of Bangladesh (e-CAB), at least 100,000 new entrepreneurs joined the online market. Additionally, 98% of e-commerce and f-commerce sellers in Bangladesh view e-commerce as a new opportunity due to its flexible working conditions and access to global markets.
Despite global efforts to provide women with greater access to the internet, particularly in poorer nations, women remain 16% less likely than men to use mobile internet services. This gap is especially pronounced in South Asia and sub-Saharan Africa, where there is a 19% gender disparity in mobile phone ownership.
Although women are progressing in e-commerce, their ventures are often small, and without favourable multilateral policies, they risk losing their entrepreneurial momentum.
Bangladesh has not played a significant role in the previous trade negotiations, but with MC14, organised by the World Trade Organisation (WTO) in Cameroon approaching, the country should actively participate. Aligning with nations that support small women-owned enterprises could create opportunities for millions of Bangladeshi women entrepreneurs. A global rules-based framework would help level the playing field, ensuring their businesses can thrive.
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A moratorium, part of the WTO's multilateral framework, was introduced in 1998 on trade-related aspects of e-commerce. It has been extended repeatedly at each Ministerial Conference since. India, South Africa, and Indonesia argue that this policy deprives developing nations of customs revenue from e-commerce imports and worsens the digital divide. However, Bangladesh remains a beneficiary of the moratorium.
Bangladesh has recently entered sectors such as communication, online banking, and mobile financial services, with e-commerce expanding significantly, especially during the Covid-19 pandemic. Digitally deliverable products, including audio-visual content, IT services, technology services, and software, are gradually emerging, although their volume remains low.
Despite this progress, no comprehensive studies have been conducted to assess whether Bangladesh would suffer if the moratorium is maintained or withdrawn. There is also no research on potential revenue losses and strategies to offset them in this sector. Software exports currently stand at close to $1 billion, and some ITES services benefit from favourable policies.
Several studies have examined the impact of the e-commerce moratorium on women. A 2019 Policy Brief from the European Centre for International Political Economy (ECIPE) indicated that ending the moratorium would lead to higher prices, a slowdown in GDP growth, and a reduction in tax revenues.
An OECD Paper from the same year noted that aside from tax revenue, other issues such as tariffs in e-commerce, alternative revenue collection methods, and the effect on service exports should also be considered.
A 2020 UNCTAD Paper estimated potential tariff revenue losses for developing countries. The ICC-ITC Policy Brief (2023) discussed the economic and administrative costs of not renewing the moratorium, highlighting direct taxes on consumers and businesses and negative effects on digitally enabled services.
Additionally, a 2019 UNCTAD research paper estimated that developing countries could lose $10 billion in tariff revenue, with Indonesia already introducing legislation to impose customs duties on digital goods, though its current MFN tariff remains at zero.
A collective of international organizations, including the IMF, OECD, UNCTAD, World Bank, and WTO, collaborated to study the revenue implications of the e-commerce moratorium. Their final report estimates that the impact on government revenue would be less than 0.33% of total revenue on average.
The study recommends the implementation of value-added taxes (VAT) as an alternative to collect revenue from digital trade. VAT is seen as fairer, as it applies uniformly to both domestic and imported products and does not impose a tax burden on intermediate inputs used by local producers.
In December 2023, South Africa submitted a communication for the WTO's e-commerce work programme, expressing concerns that most global platforms channel their transactions through a global entity, depriving the importing country of corporate tax revenue. This, they argue, hinders developing countries' efforts to support digital industrialization.
South Africa proposed establishing a fund to provide targeted support to developing and least developed economies to address the digital divide. They claim the moratorium gives global tech firms an unfair tax advantage over local competitors. However, other WTO Members have opposed the proposal, stating it falls outside the WTO's remit.
Since 2019, a group of 90 WTO Members has been negotiating a plurilateral Joint Statement Initiative (JSI) on e-commerce trade. These participants, including South Korea, China, Brazil, the US, and the EU, account for over 90% of global trade.
As a plurilateral negotiation, it has proceeded informally outside the formal agenda of the WTO's multilateral programme. For the e-commerce agreement to be added to Annex 4, all WTO Members would need to support the amendment under Article X.9 of the Marrakesh Agreement.
However, this opposition from India and South Africa has not hindered the adoption of other Joint Statement Initiatives (JSIs). For instance, Members adopted the JSI on Services Domestic Regulation and extended the moratorium on non-violation and situation complaints under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) until MC14.
Additionally, negotiations continue on expanding the TRIPS COVID-19 waiver, integrating the JSI on Investment Facilitation for Development, reforming dispute settlement, resolving outstanding agricultural issues, and finalizing the second agreement on fisheries subsidies. While unresolved issues such as dispute settlement and negotiation paths remain, the progress of plurilateral JSIs, driven by leadership from developing countries, highlights the WTO's continued relevance in setting international trade rules.
The WTO's JSI on e-commerce has yet to incorporate concrete gender-related commitments. Although Canada introduced a concept paper in 2019 focused on personal information, gender considerations remain marginal in WTO e-commerce discussions. There is potential for gender dimensions to be integrated into ongoing e-commerce negotiations, which could have important implications for Bangladesh, particularly in terms of revenue generation from e-commerce.
Ferdaus Ara Begum, CEO, BUILD Public Private Dialogue Platform, works for private sector development.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
