By Dr. Jan Yves Remy
As a co-lead of the Remaking the Global Trading System for a Sustainable Future Project (The Remaking Trade Project), I had the privilege last month to take our “trade and sustainability” crusade to New Delhi, India, and the Villars, Switzerland. The Remaking Trade Project is an attempt by Professors Dan Esty and Joel Trachtman (Yale University and Tufts University, respectively) and myself (UWI) to develop a reform agenda for the World Trade Organization (WTO) that better positions it to meet the environmental, social and digital needs for a sustainable future. Through a series of global workshops, we bring together trade and sustainability experts to propose an action plan that we stir the global community to use trade policy as a vehicle to meet the Sustainable Development Goals (SDGs).
In March 2023, we turned our focus to the theme of sustainable digital trade, and in particular, the possibilities and challenges that digital technologies hold for innovating trade. While the location for our workshops – India and Switzerland – are literally and figuratively miles apart, a common theme emerged: digitalization holds the key to unlocking new trade opportunities, reducing the digital divide, and pivoting economies to operate more sustainably and efficiently. For instance, e-commerce can reduce greenhouse gases generated by transport, agriculture and manufacturing; digital technologies can facilitate the adoption of sustainability standards that ease commerce and stimulate new growth sectors for developing countries.
But for digital trade to promote – and not undermine – development, we need action and a robust strategy that is not just trade focused, but certainly cannot ignore trade policy. In this SRC Trading Thoughts, I ponder the lessons I learnt from my trip to the bustling markets of New Delhi to the stunning views of the Swiss Alps, to consider ways that the Caribbean can chart its own sustainable digital pathway to development using trade.
Lessons from India’s Digital Revolution
Academics have marveled at how technology continues to play a vital role in India’s development trajectory. India’s declared zero carbon emissions policy, its shift to electronic vehicles and its massive efforts at financial inclusion through its the United Payments Interface (UPI)) demonstrate a commitment to a green digital future. The UPI is a homegrown instant payment system which has pulled millions of Indians into the formal economy. Through a “scan and pay” system facilitated by the government, Indians now have access to a payment system that makes commerce among customers and merchants, banking services and government programs more accessible. The UPI system is truly ubiquitous – I used it to pay roadside vendors, Uber taxis, and even saw rickshaw drivers with their QR codes on display.
At a wider level, businesses in developed countries have cut costs by outsourcing or relocating their internal business to India. Baldwin et al refer to a 2021 analysis that found that on Freelancer.com – one of the largest global services contracting platforms in the world – one quarter of those offering their services were based in India. They note that factors including strong urban IT infrastructure, a robust higher education sector, the prevalence of English language skills, and the absence of anything like the Great Chinese Firewall all contributed to this growth.
India’s success in the digital space has not come without criticism: some argue that “intermediary” digital services (like back office services) will confine Indian growth to the lower end of the value chain; and the UPI system, enabled through digital ID cards, has been challenged for the privacy concerns it raises. But, even so, few would discount the economic opportunities given to millions of people through digital technologies unleashed by the fourth revolution.
Overlooking the Swiss Alps
On the next leg of my journey, the Remaking Trade Project met in Villars, under the patronage of the Villars Institute Summit. There, participants explored the theme of Digital Innovation, Technology, and Sustainable Trade.
The Workshop discussed a number of themes including, the (limited) role played so far by WTO’s TRIPS Agreement in promoting the flow of technologies for development. Greater adoption of mechanisms to promote licensing in green technologies, and a focus on trade in green goods and services were considered as possible areas for future negotiation. Regulatory harmonization in e-commerce – in particular intellectual property protection, privacy, cybersecurity, competition, services regulation, consumer protection – was debated, as was the role of the WTO in promoting regulatory convergence, and trusted data regulations for use by firms. One idea mooted was whether a “Task Force on E-Commerce and Sustainability” could be developed to combine and rationalize the work of the WTO, UNCTAD, the OECD, the World Bank and the International Telecommunications Union (ITU).
On the topic of the “digital divide”, it was agreed that lessons from the negotiation of the WTO Trade Facilitation Agreement, and the experiences under Aid for Trade could be provide useful in the e-commerce space. A key concern raised was how to leverage investment in technology in e-commerce to leverage export-led growth, and whether special market access provisions could help to precipitate early investment in e-commerce capacity for developing countries.
Digital Lessons for the Caribbean
Landing back in the region, it dawned on me that the Caribbean has a lot to learn from, and offer to, the global discourse on digital trade and sustainability.
For one thing, India’s UPI system speaks volumes for how digital policies can promote economic empowerment on an unprecedented scale. As Barbados and Guyana debate the adoption of digital ID cards, we should not lose sight of what is at stake, even while acknowledging genuine concerns of privacy that must also be addressed.
Another key takeaway for me was that while there are clear economic opportunities from investing in “intermediary” services (like back-office services) our ambition should be aimed at capturing a bigger share of the higher value digital services made available by the digital revolution.
We must also do a better job of quantifying our progress. The region does have success stories of how small “nano” firms have leapfrogged into global commerce through the use of online platforms. We must not just tell those stories, but also quantify and appreciate the role of e-commerce in helping us meet the SDGs.
Finally, in a 2021 communication to the WTO, the region’s negotiators chronicled CARICOM’s e-commerce profile, challenges and opportunities ahead. While we applaud these developments, we at the SRC have long called for the region to formally engage in the ongoing plurilateral negotiations at the WTO on e-commerce. Even without that engagement, there is a ripe opportunity under this Remaking Trade Project to advocate to a wide audience how we can use the trade system to promote a sustainable digital pathway to development.
Dr. Jan Yves Remy is Director of the UWI’s Shridath Ramphal Centre for International Trade Law, Policy and Services (www.shridathramphalcentre.com). She is also part of the leadership team of the Remaking Global Trade for a Sustainable Future Project (www.remakingtradeproject.org)