• The decline in global trade, travel and tourism coupled with significant financial support is placing government revenues under severe pressure in many countries. To the extent that countries install non-resident tax mechanisms, such as a value-added tax (VAT), goods and services tax (GST) or other duty collection or tax protocols, they must be nondiscriminatory, and implemented in accordance with OECD guidelines and in a trade-facilitative manner to reduce border bottlenecks.

• The COVID-19 crisis has demonstrated that medical supplies and other essential goods must be released expeditiously to allow immediate access where they are urgently needed. Paper-based procedures, onerous documentary requirements and physical verifications that are enforced for the purpose of revenue generation present a severe disruption of this life-saving global supply chain. Delays can be especially detrimental to small businesses who are forced to manage uncertainty with fewer resources.

• Paperless procedures, automated systems, electronic data, e-payment and risk management processes reduce physical contacts to a minimum and appropriately focus controls on high-risk goods. These measures also alleviate staffing shortages of customs officials due to the unavailability of transport to and from numerous ports, airports and border stations.
  

Takeaway for WTO Negotiators

The COVID-19 crisis creates additional urgency for WTO JSI officials to agree on new, TFA-plus commitments to simplify, digitize and streamline border processes including documentation and collection of taxes and duties on low-value shipments. The policy should facilitate the digitization and separation from the border of processes to the greatest extent possible to reduce administrative burdens, reduce physical interactions and expedite clearance of goods.

• Throughout the pandemic, contactless and digital payments have kept economies running and reduced opportunities for contact with the COVID-19 virus. Government shutdowns and social distancing have accelerated the migration to e-commerce and the use of contactless financial services including digital payments. It is estimated that, by 2025, digital payments adoption could increase 10 percent, double the pre-COVID growth estimate of 5 percent.

• Out of necessity, consumers globally are making payments online for the first time and becoming familiar with experiences such as food delivery and site-to-store transactions, ordering and paying online prior to picking up at a local store. A recent study found that 71 percent of surveyed consumers in Kenya have purchased groceries online for the first time. These experiences will shape preferences and behaviors even as the crisis subsides.

• To manage uncertainty, compete and meet the demands of the “new normal,” micro and small businesses around the world are being challenged to develop a professional online presence, accept trusted digital payments and pay suppliers digitally. Access to secure, reliable payments technology is paramount for these micro and small businesses, who are at greater risk of cyberattack by criminals targeting new points of entry to the digital ecosystems.

Takeaway for WTO Negotiators

WTO JSI officials must ensure economies are “digital ready” by supporting the international functionality of payment systems, including through full market access and national treatment commitments and robust digital trade commitments.

• The COVID-19 pandemic has accelerated the adoption of technologies that enable remote work and communication. Technology providers have witnessed years’ worth of digital transformations in two months of widespread shutdowns and social distancing, including the dramatic increase in adoption of digital conferencing, collaboration, productivity and storage platforms. Digital tools are no longer complements to productive work environments — they are essential.

• Digital tools that enable commerce, productivity, and communication have served as remote-work and learning lifelines. For instance, governments are negotiating trade agreements virtually and are reaching businesses through apps; small businesses are staying connected with their customers through social media, video, search and other online channels; and the broader public is accessing tools, solutions and information digitally.

• Nondiscriminatory access to global productivity technologies benefits companies of all sizes, across all sectors, including in lifesaving settings such as health care and emergency response.

Takeaway for WTO Negotiators

Through the WTO e-commerce negotiations, officials must create an enabling environment to foster the ability of businesses to access the entire suite of digital tools they are relying on to manage uncertainty and operate their businesses on a global basis. A meaningful agreement must include market access commitments on sectors relevant to e-commerce, including computer, telecommunications, payments, advertising, logistics and distribution services, as well as digital trade commitments that enable cross-border communication and exchange.

• Companies and individuals relied on e-commerce and app platforms and services to an unprecedented extent during the pandemic.  Small businesses utilized website and e-commerce services to power sales over their own website. Many also utilized e-commerce and app marketplaces to increase their global visibility and reach.

• App stores have been essential in enabling access to distance learning, telemedicine, e-commerce, and work and personal communication.  It is estimated that first-time app downloads will rise more than 20 percent in 2020 and that, by 2024, app sales will be nearly 10 percent higher because of the lasting impact of changes in behavior due to COVID-19. 

• Social distancing and lockdown orders resulted in unprecedented growth in e-commerce. Sales of digital native brands soared 200 percent in late April compared to a year earlier, while email capture, email conversion and online shopping cart activity rates jumped dramatically for retailers. 

• Many micro and small businesses turned exclusively to digital tools and global e-commerce to generate sales and, in some cases, to pivot to produce and distribute personal protective equipment, cleaning products, nonmedical grade face masks, and work-from-home essentials to address needs during the pandemic. Fifty-one percent of small businesses reported increasing online interactions with their clients, while 36 percent of personal businesses that use online tools indicated that they are conducting all their sales online in response to the crisis. A separate survey found that, for 55 percent of small businesses in Canada who had an existing online presence, their sales rose or stayed the same during the pandemic.

Takeaway for WTO Negotiators

The pandemic has created new urgency to guarantee nondiscriminatory market access for computer and related services and the broader suite of services that enable e-commerce including financial, distribution, telecommunications and logistics as well as high-standard digital trade commitments. These experiences also argue strongly in favor of ensuring widespread adoption by countries of the Information Technology Agreement (ITA) to reduce costs of technology essential to businesses, for agreement on a permanent ban on customs duties on electronic transmissions, and for new Trade Facilitation measures that reduce administrative burdens for physical e-commerce businesses.

• Life science research by small and medium-sized biotech companies is leading the way to find treatments and vaccines for COVID-19. As of June 15, small companies are pursuing 235 of the 290 COVID-19 therapies being developed by companies headquartered in the United States.

• The immense global impact of COVID-19 demands that this research be conducted as efficiently, effectively and quickly as possible. In addition, unprecedented cooperation is needed between companies, governments and academia around the world.  As a result, the ability to effortlessly share research data across borders is critical to stopping COVID-19.

• For example, identifying potentially beneficial existing compounds and medicines requires access to previous research portfolios and clinical trial data for analysis. Artificial intelligence (AI) is accelerating the identification of new and existing compounds by drawing on massive data sets. Data must be shared to optimize clinical trial design and patient recruitment. Further, the resulting data from clinical trials must be available to researchers. Life science companies also draw on externally generated data and rely on partnering entities to collect and share clinical trial data from around the world. Each of these circumstances often requires the transfer of data across borders.

• Accordingly, restrictions on firms’ ability to obtain and use data across borders impact ongoing research and development efforts to combat COVID-19.  Moreover, a patchwork legal framework of data flow rules internationally may ultimately raise transaction costs and compromise needed scientific advances and telemedicine services. Therefore, the exchange of life sciences research and development data, free of unreasonable data flow or data localization restrictions, is [SV1] essential to expedite success.  Countries should also ensure their regulations permit innovative global telemedicine services to address critical needs.

Takeaway for WTO Negotiators

WTO JSI officials should ensure that life sciences research and development data are covered by obligations against unreasonable data flow or data localization requirements and include research and development in market access commitments.

• During the COVID-19 crisis, additive manufacturing – the commercial application of smart technologies including 3D printing – has been a flexible solution in the face of shortages and supply chain interruptions.

• Additive manufacturing technologies helped address shortages by 3D printing essential goods including face masks, face shields, ventilators, parts for medical equipment, and nasal swabs. These efforts were an important supplement to traditional manufacturing, which helped to bridge supply chain gaps and accelerate the delivery of essential items.

• In some cases, the journey from conceptualization to production at scale was transformed from months or years to weeks.  For example, companies collaborated to address the shortage of nasal swabs, producing a product that advanced from design to delivery in 35 days.

Takeaway for WTO Negotiators

It is essential for WTO negotiators to craft facilitative e-commerce frameworks that permit nondiscriminatory access to new technologies including additive manufacturing, Artificial Intelligence and blockchain.  Experiences with additive manufacturing strengthen the rationale for countries to join the ITA and for negotiators to agree to a permanent ban on customs duties on electronic transmissions.