WTO: 2013 NEWS ITEMS

WTO PUBLIC FORUM: 1-3 OCTOBER 2013

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Public Forum 2013
Programme

Azevędo opens Public Forum 2013: “Innovation is an important driver for trade flows”

USTR Froman warns poor countries would be the biggest losers if Bali fails

  

Opening plenary session: “Innovation has changed the way we trade”

Members of the panel were: Director-General Roberto Azêvedo, Minister for European Affairs and Minister of Foreign Trade of Finland Alexander Stubb, Chairman Talal Abu-Ghazaleh of Talal Abu Ghazaleh Organization, Mr Luo Feng, CEO of IZP technologies, and WIPO Director-General Francis Gurry. Ms Julie Gichuru, TV host and news anchor of Citizen TV, was the moderator.

The importance of the WTO Public Forum as the window of the WTO to the whole world was highlighted in the opening speech of the Director-General and in the keynote address of US Trade Representative Michael Froman.

The panellists highlighted that innovation touches every aspect of our lives and that recognition of the importance of innovation is growing. Innovation can help consumers get high-quality products with lower cost. New technologies can help trade by bringing manufactured goods to suitable markets.

The panel pointed out that innovation needs a clear system of rights and obligations for the participants in the knowledge era. Innovation is absolutely global while trade is national. This is where barriers arise. WTO members need to live up to the expectations of businesses and consumers. Businesses need to be more active, they need to talk to governments and make their views understood. Businesses are traders and governments are facilitators.

The panellists said that trade is about logistics and this is where the importance of a WTO trade facilitation agreement lies. Impediments can be government requirements, red tape and excessive regulations.

The developing world is a content-filled world, said the panel. There is a lot being done to increase the penetration of developing countries in the global markets such as capacity building. There is a lot of potential but this potential needs to be converted into revenues.

The panel made the point that the internet is a borderless world. It is an important tool but access to it is not equal in every country in the world. In our planning, we should consider the needs of future generations who will be the citizens of the digital era.

Questions from the audience and via Twitter touched on many topics, including purchasing power and differential pricing, harmonizing legislation on standards, challenges facing Latin America, cyber security and trade, regulating the Internet; new route of digital trade and its rules, single global digital markets, and consumers’ needs.

 

Working Session 1: Development in a digital age: how technology and the internet are expanding access to the global marketplace

You can no longer think of starting your business just locally, said the panel, the global market needs to be taken into consideration, for the market will demand different paths. A good example is the development of paper infused with edible and organic spices to inhibit bacteria and fungi growth. Its use spread through discussion on the internet and word of mouth.

Another example is the Grameen Foundation, which promotes global change through a sustainable business model, with the social change needing to be measured. Technology was able to incorporate what would normally be considered outside of the technology sector.

Chile’s government has developed policies to bring technology and innovation closer to the private sector, the panel highlighted. The goal is to transform Chile into a regional hub of innovation in Latin America and to improve citizens’ approach to entrepreneurship. Web technology has reduced the costs of an internet start-up from USD 5 million in 1997 to under USD 50,000 as people take advantage of the tools that are now available online.

The panel pointed out that revenues from call centres in the Philippines have now risen to as much as one-third of the money that Filipinos abroad earn.

Intellectual property rights mean innovation and innovation means intellectual property rights. However, intellectual property rights can be excessive and hinder innovation, the panel said.

One of the questions asked during the question/answer session was: “How do you bring training to the poor?” The panellists said that one way is to build a network of community knowledge workers. This was done in Uganda, where field workers asked farmer organizations to nominate someone who could read and write and who would then undergo two weeks of training. Afterwards, the person was brought back to the community with a phone, with the hope that he or she would share their knowledge.

 

Working Session 2: How to regulate energy trade?

This session examined the gaps in the current international regulatory framework regarding energy trade and discussed how energy trade could be regulated in a world that is becoming more and more globalized.

Gabrielle Marceau focused her presentation on WTO rules. She noted that WTO rules do apply to energy. The real issue is whether the existing rules are adequate. Agricultural and industrial products, for example, are subject to different subsidy rules. Does it make sense to treat ethanol and biofuel differently? In her view, the current rules should be adjusted and clarified to better fit the reality of trade in energy. However, she questioned the idea of negotiating a new agreement on energy. A case by case approach may be better suited to the complexity of the issues at stake. More attention also needed to be paid to the relationship between WTO rules and the new rules negotiated in regional and bilateral agreements.

Ronald Steenblik gave an overview of the negotiations on environmental goods and services in APEC, the OECD, and the WTO. He discussed the difficulty of defining environmental goods and services. As a way forward, he raised the idea of a plurilateral agreement modelled on the WTO’s Information Technology Agreement.

Enrique Rodriguez-Flores presented a Central American initiative to integrate national energy markets at the regional level.

Vera Thorstensen called for the creation of a working group to discuss energy issues at the WTO, including the question of green subsidies and the interaction between multilateral and plurilateral rules.

Ricardo Melendez-Ortiz focused on sustainable energy. Sustainable energy products were facing important trade barriers: tariffs, a growing number of non-tariff barriers, and increasing use of trade remedies. What could be done? Could a moratorium be imposed on the use of local content requirements? Could we build on the APEC mandate to reduce tariffs and on the various regional and plurilateral initiatives to improve the governance of sustainable energy?

 

Working Session 3: What factors accelerate innovation and technology diffusion? Cross-sectoral business perspectives

The speakers - representing five major global players - were asked by the moderator to indicate their involvement in innovation and technology diffusion. Their experiences differed with regard to the length of cycle of investment in innovation. It is longer in the aerospace or pharmaceutical business and shorter in the telecoms industry.

Ms Allison Mages, Senior IP, Procurement and Policy Counsel at General Electric, said the borders of innovation are blurred - for example, the same scanner used in hospitals is used in manufacturing units as well. She also spoke about the "industrial internet", indicating that connected machines worldwide could eliminate USD 150 billion across industries.

One concern that all panellists spoke about was how to diffuse technology and share know-how without local partners becoming local competition. They all have strong IP departments and are very careful about what technology is being diffused.

Mr Philip Wadsworth, Vice President and Legal Counsel, Qualcomm, spoke about the virtuous innovation circle: invest, innovate, patent and reinvest patent revenues in research and development.

Some members of the audience challenged the views of the panellists, particularly regarding the use of government funds to kick-start innovation processes and whether that creates a competitive disadvantage for other players, especially in developing countries. Mr Alistair Scott, Vice President Intellectual Property, Airbus, said public funds need to be managed in a way that does not create "harm".

Mr Robert DeBerardine, General Counsel, Sanofi North America, was particularly challenged on the issue of differentiated pricing in pharmaceuticals and compulsory licensing. He replied that there needs to be an intelligent conversation on all the issues involved. He indicated that one need not look into the issue from the IP prism only but one should also keep in mind the sustainability of research and development.

 

Working Session 4: Made in the world: how can trade policy be adapted to global value chains?

With global value chains a fact of trade today, said the panel, there are a number of implications for trade rules: imports and tariffs matter, rules of origin need to be adjusted, trade facilitation matters, and services and investments are important. WTO rules do not sufficiently reflect the reality of global value chains.

One panellist said the European Union is trying to adapt to the new economics of global value chains. In terms of trade policy, raw materials are the first element - the EU is actively working on rules to curb export restrictions in dispute settlements, bilateral and accession negotiations. Services are also important, and the EU is seeking to push the boundaries of services negotiations. Intellectual property is the third important element but lagging behind in multilateral negotiations.

Another panellist said the United States has several initiatives to facilitate trade in global value chains – the Trade in Services Agreement (TiSA), the Information Technology Agreement (ITA) and trade facilitation. It is important to note that most trade agreements started out as plurilateral agreements, which can be building blocks for multilateral agreements.

Global value chains can also have implications for development – they can help small and developing economies better integrate in trade, said the panel. Value chains can also mean new dynamics in the political economy – more firms operate globally, meaning we shall hear more voices calling for liberalization than protectionism.

One of the questions from the audience was: "How do you see the place of China in the debate on plurilateral agreements – the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership (TTIP) and TiSA?" The panel replied that China's entry into the world trading system was one of the most important events of this century. China is considering its new role and the West is accumulating learning experience to deal with China. On the ITA negotiations, the United States thinks that China's offer list lowered the overall ambition and led to the suspension of the talks. On the TiSA negotiations, countries start plurilateral negotiations with the aim of making the snowball bigger. The fact that outsiders are knocking on the door of TiSA is a positive sign, as long as China signs up to the ambition.

Another question was: "Some countries still have rules that prevent developing countries from participating in the top end of the global value chains (GVCs). What would the panel recommend in terms of trade rules to better use GVCs?" The panel said the Aid for Trade event this year was dedicated to GVCs and development. Development goals are also an integral part of the Bali package. The question on the relationship between GVCs, trade and development is a complex one. GVCs create jobs, and although not perfect jobs, it provides training and opportunities that people in developing countries would not otherwise have.

 

Working Session 5: The neglected imperative in trade and development: innovation as a growth strategy for the Global South

Innovation is a state of mind, said the panel, it does not mean "reinventing the wheel". It occurs in developing and least-developed countries and should be considered in terms other than "traditional" – that is, in terms of global value chains and facilitating integration into these regional value chains.

The panel highlighted that innovation is linked to trade and is a tool to promote growth. An effective policy and regulatory framework is essential for creating the right environment for this relationship to yield concrete growth. The reduction of poverty and less reliance on and depletion of natural resources should be considered as an objective of growth, which innovation can help to achieve. Innovation can be used to create eco-friendly options and an improvement to the ecosystem.

Innovation can be looked at in terms of "smart" specialization, said the panel. This can create structural change and increase productivity, through discovery and creation of new activities.  There are other avenues, aside from science and technology, through which innovation can occur. 

The panel said the WTO TRIPS Agreement is restrictive for developing countries, who have not yet reached the stage of "radical innovation" attained by developed countries; only when they have reached this stage does TRIPS become "interesting".

 

Workshop 1: Managing knowhow and trade secrets in global value chains and the international transfer of technology

Study of undisclosed information and its impact on international trade is a neglected area of study, said the panel. Members protect undisclosed information through a wide array of legal mechanisms and varying areas of law.

The panellists observed that trade secrets exist in the absence of law – control of secrecy is physical before it is legal. Trade secrets are one of the three mechanisms to promote innovation – three innovations are patents, trade secrets, and patronage (prizes, etc.) – these three can be used singularly or in tandem. Trade secret protection is often used because patent protection is unavailable due to non-patentability of the innovation. Data on the quantification of the value of trade secrets for business is scarce; however, data on technology transfer shows the importance of trade secrets vis-à-vis other types of intellectual property.

One point raised was that trade secrets as a detriment to the use of information in the public domain is a false dilemma. Trade secrets as an impediment to employee mobility is also a false dilemma. Trade secret protection is used by business of all sizes – protection of trade secrets encourages efficiency and dissemination of information. The legal framework for trade secret protection is fragmented and diversified; the scope of protection varies and there is no consistent definition of trade secrets.

Trade secret enforcement mechanisms are not consistent and not all expected remedies are available in all jurisdictions, said the panel. Estimates of the cost of theft of trade secrets vary, but it is likely that it is in the hundreds of billions of US dollars.

One observation of a forthcoming OECD study on trade secret protection in 21 countries is the similarities of scope and available remedies. Points of divergence among different jurisdictions highlighted in a forthcoming OECD study on trade secret protection include trade secrets protected under civil or criminal law, the duty of employees, the differences in types of damages and injunctions, data exclusivity terms, and non-compete agreements, evidence fathering and discovery of evidence, and protection of secrets during litigation.

The panel highlighted that trade secrets represent a substantial share of value in the economy. Variation in protection between countries poses a management challenge for firms and this can influence the economic and innovation performance of firms and nations.

There is a distinction, the panel said, between procedural knowledge (actual skills to master – this is knowhow) and declarative knowledge (factual information). Procedural knowledge should not be considered tacit knowledge because it does not permit positive technology transfer. There is a challenge in shaping non-disclosure agreements in a way that allows for sufficient transfer of procedural knowledge without unduly restraining recipients of the knowledge.

A glossary or repository of knowhow/showhow techniques should be captured in order to figure out how to manage and regulate knowhow/showhow. In other words, we must first define what it is that needs to be managed and regulated, the panel said. Countries that use common law doctrines of breach of confidence to protect trade secrets often rely on the justification that protection promotes equity and fairness and rely less on the incentivizing innovation as a justification. Courts generally struggle with balancing protection of competition and mobility of labour, and trade secret protection.

A contemporary concern regarding trade secret protection, said the panel, is different rationales for protection and how to structure protection based on different rationales; for example, the rationale for protection may not necessarily be to incentivize investment or preserve fairness and equity; rather, in the case of traditional knowledge the rationale may be based on community autonomy rights or knowledge as “divine”.

The tension between the disclosure knowledge resulting as a trade-off for patent protection and the lack of that disclosure under trade secret protection is a misperception, the panel concluded. Patent claims are often drafted in a manner that makes it difficult to produce the patented invention based strictly on the patent claims.

 

Workshop 2: Data protection, security, and the digital economy: creating trust and predictability for trade

Mr Nick Ashton-Hart, Executive Director of International Digital Economy Alliance, started the discussion by reflecting that individuals want to know how companies handle their data and companies want legal certainty. He invited the other panellists to discuss how to come up with common rules and whether this can be negotiated through an international agreement.

Mr Jens-Henrik Jeppesen, European Affairs Director of the Centre for Democracy and Technology, explained there are differences among countries in the understanding of what privacy and data protection means. However, he cited the 1995 regulations on data protection of the European Union as an example of how minimum standards can be agreed upon. He recognized that this is not easy as the situation evolves over the years. One area where legislation has been left behind is surveillance for security reasons. Intelligence agencies have been given extreme leeway for obtaining information. He concluded that countries have to reach a common understanding of what this oversight should be.

Mr Hosuk Lee-Makiyama, Executive Director of the European Centre for International Political Economy, reflected that trade is based on the concept that countries are at peace, so nothing in the international trading system can preclude countries from engaging in intelligence activities. He said WTO cases regarding services involve the internet because countries did not foresee its development. What has come up in WTO litigation is the principle of the least trade-restrictive measure. Countries are free to set their own standards of protection as long as they do it with the least trade-restrictive measure and in a non-discriminatory manner. He said measures for privacy protection can negatively affect businesses because legislators do not think about the economic impact, and on the contrary, these measures do nothing to protect citizens from government surveillance.

 

Working Session 6: Bringing technological innovation to trade: the perspective of supply chains and value chain management

Ms Lee Tuthill, Counsellor in the WTO's Trade in Services Division, began the discussion by saying that although consumers had not been commonly involved in internet commerce in the early days, this had changed quite rapidly with the evolution of banking, tourist and retail industries, and with the emergence of electronic payment systems. There will be even more dramatic changes in the future in business and trade due to further ICT developments. This will also create new challenges for trade negotiations. ICT developments create significant opportunities for trade and development, including opportunities for small and medium-sized enterprises (SMEs) and developing countries. More brainstorming and less arguing is necessary to bring this potential into reality.

Mr Torbjorn Fredriksson, Chief of ICT Analysis at UNCTAD, said the development of ICT creates opportunities for SMEs and developing countries, but also poses challenges related to management and protection of data. Development of ICT and innovation affected both North and South. The related advantages for developing countries do not arise automatically though. Further development of international legal regulation and technical assistance is needed to help developing countries make use of these developments. For example, it is important to promote literacy, digital literacy in particular. Joint international efforts may be necessary in this regard.

Mr Xue Guangchun, Chairman & Chief Executive Officer of Sunivo Supply Chain Management Corporation, said Sunivo has been engaged in its business for more than ten years, providing digital platforms for the supply chain management of SMEs. Three digital platforms developed by Sinvo enable the process of digitalization of SMEs' documentation, collection of data, "cloud computation" and the use of this data by SMEs in the most convenient and efficient way.  

Mr Zhang Ye, President of the CBI Group, said the group is an online trading and supply chain service provider in China. The services are provided both in online and offline formats. In this regard, the CBI Group assists their clients to move gradually to the online format, since it is clearly a more efficient one.

Questions from the audience included "What challenges do you face in adoption of your solutions by businesses: do the companies implement them quickly and eagerly?" Mr Zhang Ye replied that the most difficult aspect is convincing clients to move from offline to online format of documentation. That is why it is frequently done gradually, "step-by-step". Mr Xue Guangchun said there are some challenges related to financial issues. Also, the younger generation of businessmen is easier to persuade than the older one.

 

Working Session 7: ICT trade challenges in the context of nascent digital economy

Mr Esa Kaunistola, Director of Trade Policy at Nokia, highlighted that administrative requirements, such as conformity assessments, and technical requirements could be simplified by making a standard series that would be acceptable to all interested parties.

Ms Hildegunn Nordas, Senior Policy Analyst at the OECD, said that of the ten largest companies in the world, three are services companies in the digital economy. Services disseminate information, and this information is utilized for education, empowerment and entertainment. However, for companies it is very much about technology diffusion and the ability to manage supply chains effectively. There might be a need for more international cooperation for competition policies.

Mr John Neuffer, Senior Vice President at the Information and Technology Industry Council, said local content requirements lead to a reduction of USD 100 billion a year in global trade. The Trade in Services Agreement (TISA) is very important for the trade sector. The Information Technology Agreement (ITA) has not been updated for 16 years, not a single product line has been added. The expansion of the ITA must be finished this year so that the WTO can show it is still open for business.

The American Chamber of Commerce recommended that there should be a continued effort to curb trade barriers. Delivering progress in services, the ITA and the conclusion of a trade facilitation agreement should be priorities for the European Union and the United States.

Hosuk Lee-Makiyama, Director at the European Centre for International Political Economy, said without the ITA there would be no internet or ICT revolution. Solving regulatory divergences will not be achieved at the WTO. He highlighted that mutual recognition will not happen multilaterally. The impact of non-tariff barriers goes much further than other industries because it involves whole value chains.

In response to a question from the audience, Mr Neuffer stated that the spaghetti bowl of preferential rules of origin hinders technological industries; they prefer multilateral solutions.  Non-tariff barriers are the biggest problem for the industry.

 

Working Session 8: How to leverage e-commerce for trade development in the ACP countries

In his opening statement, Mr Marwa J. Kisiri, Head of ACP Geneva Office, highlighted the recent growth in e-commerce, with global business-to-consumer sales reaching USD 1 trillion in 2012. To address the main challenges in ACP countries - that is, the lack of capital and adequate skills, in particular in small and medium-sized enterprises (SMEs) - increased cooperation at the firm, regional and global level is required.

Regarding trends in e-commerce, the speakers recognized that e-commerce provides great opportunities for SMEs. Mr Martin Labbé, Adviser, Online Marketing & Digital Networks at the International Trade Centre, highlighted that large players such as Amazon, eBay or Alibaba dominate e-commerce. However, at the same time, they offer SMEs the possibility to use their platforms to sell worldwide, thereby becoming "micro-multinationals". ACP countries lag behind in terms of e-commerce development. Nevertheless, in countries such as Cote d'Ivoire or Nigeria innovative companies have emerged, including the online retailer Jumia.

The speakers pointed to electronic payment systems and financial infrastructure as major challenges. The lack of banking infrastructure in African countries hinders companies in engaging in e-commerce. Few people in Africa have bank accounts, limiting the potential use of electronic payment systems. Furthermore, many firms find it difficult to implement payment systems such as PayPal, which are necessary for cross-border e-commerce. The speakers provided examples of innovative services that are adapted to African circumstances, such as mobile banking by M-Pesa in Kenya or cash on delivery by Jumia in Nigeria.

The speakers highlighted ICT infrastructure, skills and trade facilitation as further challenges to e-commerce in ACP countries. Mr Konstantinos Komaitis, Policy Advisor at the Internet Society, underlined the importance of internet exchange points (IXPs) for ACP countries to guarantee a cheap and stable internet connection with traffic running locally and not over servers located in Europe. Trade facilitation is crucial for e-commerce since the latter relies on consumer trust that the product will be delivered safely and on time. According to Mr Labbé, governments should improve transport infrastructure and house numbering, two important factors for the delivery of goods acquired through e-commerce.

Ms Sandra Ribeiro, Project Manager of the e-Gov Upgrade Project, Núcleo Operacional para a Sociedade de Informação (NOSI), Cape Verde, explained how Cape Verde developed e-government solutions to move towards the information society. In particular, she highlighted the need to develop a culture of e-commerce services. In Cape Verde, services such as registering a company or tax declarations can now be conducted online. Furthermore, free internet access in public squares is being implemented. Cape Verde has become a role model for other countries.

The speakers recognized that innovation and e-commerce are pushed forward by the private sector and that the public sector is lagging behind in adjusting to e-commerce technologies. All the speakers agreed that multi-stakeholder cooperation between the private sector, government and the public is required to identify the challenges and formulate the right policies.

Ms Ribeiro mentioned that e-commerce can help formalize informal businesses, thereby increasing tax payments. Mr Thiendou Niang, Managing Director, Afrique Communication, Senegal, and other speakers said they regarded mobile phones as a great opportunity for Africa. In contrast to internet penetration, mobile penetration is high in Africa, e.g. 68 per cent in Senegal, and offers the possibility to reach a large share of the population. It allows local firms to compete, for example, through innovative services such as mobile banking.

Mr Labbe highlighted innovation hubs as a promising policy instrument in Africa. Innovation hubs are incubators where firms can obtain financing and advice in the form of mentoring or coaching. Furthermore, he stressed that governments should liberalize the financial sector to allow the entry of investors through venture capital, which can help finance innovative start-ups. Ms Martina Dalla Vecchia, Professor, University of Applied Sciences Northwestern Switzerland, highlighted that efforts should be made to bring tools such as web analytics to firms in ACP countries, thereby helping them to analyse customer behaviour.

A member of the audience asked whether entering e-commerce requires high costs that are difficult to bear for SMEs. Mr Labbé mentioned that the actual cost for setting up an online shop has gone down dramatically in recent years, but that the issue of electronic payments is a major difficulty. Mr Konstantinos mentioned that e-commerce services have to be developed within Africa as it is expensive to rely on services from developed countries.

Another member of the audience highlighted that technology is not the problem in ACP countries but rather broader development issues such as education, infrastructure and trade relations. Ms Ribeiro answered that African leaders need to take ownership of the problems in Africa and not rely on developed countries. The panel agreed that ACP countries have a huge potential for investors. Mr Niang stressed that ACP countries should present themselves as business partners to foreign investors rather than asking for help.

 

Working Session 9: The internet economy and the future of international trade law

Mr Hanne Melin, Policy Strategy Counsel EMEA, eBay Inc., said innovation and technology are changing trade. The internet and services, such as eBay, are facilitating connection, communication and the creation of trust between trade partners. The internet reduces trade costs, and this opens up the opportunity for small exporters to reach global markets. Tapping into the supply chain of big corporations is no longer the only way for small companies to access global markets. There is another model: the global empowerment network, which allows smaller companies to sell from anywhere to consumers everywhere. The trading system must address the needs of each consumer at each stage of the trade process. This requires developments in a number of areas, including broadband, postal networks, customs, intermediary liability, etc.

Ms Mira Burri, Senior Research Fellow at the World Trade Institute, said there are two dimensions to the discussion on governance of digital trade. The micro-dimension involves answering how international rules should adapt to the practical realities of doing trade. The macro-dimension relates to the broader question of internet governance. Here, WTO law is only one piece of a much bigger puzzle. Regarding the micro-dimension, there are many questions unanswered, even on simple issues, such as classification of electronic goods, whether WTO rules apply to the electronic delivery of goods and services. Many of these questions have been addressed in preferential trade agreements (PTAs). Such agreements offer answers but one may ask whether they are the right answers. PTAs create a patchwork incapable of addressing the global changes brought about by digitalization. Many of the PTAs reflect power bargains and are US-centric and as such developing country policy space may be being unwittingly reduced, e.g. in the context of intellectual property rights. Regarding the macro-dimension, international trade law is only one aspect of digital trade governance. Many issues involving filtering, privacy, and data protection are important as well, and there are many public and private organizations engaged in this. Cyber law is based on experimentation, learning, and constant and rapid changes. Law should thus facilitate experimentation while also safeguarding key values, including privacy and security.

Mr Nick Ashton-Hart, Geneva Representative of the Computer and Communications Industry Association, said the idea that you do not need new rules because rules made in the past are technology neutral is not true. The majority of beneficiaries of the internet and digital commerce are medium and small enterprises. But we have no conception in international trade law of the internet as a platform that is depended upon by businesses and wider society for communication and other services. Telecoms is only one part of this issue. If we believe in bridging the digital divide, we must ensure that the network serves the largest number of people at the cheapest possible price. The cost, whatever it is, should deliver the most value, and we must ensure that it is affordable for everyone, whether they live in least developed countries or Western Europe. Member states should create a forum where people can discuss the online world. How does it interact with trade law? How do we deal with an entire world not dealt with by any trade agreements? How do you fit the digital economy into the world trading system? Members should start not by thinking about negotiations but by focusing on understanding these changes.

Mr Hamid Mamdouh, Director of the WTO's Trade in Services Division, said we need to start understanding each other, we need to start listening. We need to distinguish this kind of listening from negotiation. States should not let this understanding be seen only as a prelude to negotiation. Understand first. Then governments can decide if they want to negotiate. One central issue is the question of classification: whether a product is a good or a service. Decisions need to be made. For example, ebooks. Are they goods or services? It is not really that complicated if there is political will. Things will get harder with developments such as 3D printing. Regulatory issues are the new frontier of trade negotiations. If we do not establish a degree of compatibility and agreement to regulate within agreed boundaries, we will face problems.

William J. Drake, University of Zurich, said in the context of internet governance, one hears very little discussion of the WTO. In the 1980s, people in the telecom world were surprised to hear that international services could be traded. Trade and telecoms were two different communities that took a long time to start talking to each other. In the context of the WTO and internet governance, this disjuncture is evident again. There is a tendency to avoid this interconnection. But interconnections exist, and the WTO can contribute to an open and free internet. But it seems that there is no mutual awareness. It seemed for a long time that there was no demand in the internet governance area that this (i.e. internet regulation) be moved into the WTO. There have been dispute settlement cases regarding the internet, but these have not generated broader lessons for internet governance. There is a disjuncture between what is discussed in this building and what is discussed in other internet governance institutions.

 

Working Session 10: Connecting the last mile: innovation and the rural poor

A significant proportion of the world's rural population is very much isolated but with the arrival of the information age, they have an unprecedented opportunity to connect with the world, said the panel. The session examined three case studies where information technology helps the poor in rural areas connect to others, mainly using mobile phones.

The first case study featured Honey Care Africa which partners with smallholder farmers in East Africa to sell premium honey. A key issue was to trace the production chain in order to guarantee quality. Grameen Foundation helped to develop a smart phone application that allows technicians to generate very detailed data on the product, profiles of individual producers and the aggregated community production track, allowing trends to be seen across seasons at the regional level. Ultimately, it has allowed the entire supply chain to be tracked and guaranteed product quality.

The second case study featured ACDI/VOCA, which is helping mobile money services expand into rural areas. Mobile money enables farmers to send and receive payments with the agricultural product they produce in rural Indonesia, Tanzania and Ghana. It reduces security risk and enables record keeping. In rural areas, farmers have low literacy rates and lack of trust, which require special ways to promote mobile money.

The third case study was about FairTrade, an organization that provides ethical labels and certifications on agricultural products, involving 1.3 million farmers in 70 countries. It helps small scale farmers by providing stable prices above minimum price and access to pre-financing. It also uses technological tools to assess farmers' needs and readiness.

One of the questions posed to the panel was: "How can these organizations decide whom to partner with, and make sure that their profits are paid back to benefit the rural community". The panel replied that one of the main issues for Honey Care Africa was financing for farmers to acquire equipment. It works with KIVA, an online microfinance platform, to provide loans. The other partnership is to develop a smart phone application to trace production. Once they are able to combine the information and the financing, farmers are able to benefit from the loans.

 

Workshop 3: Mobile technology for social good: how Sesame Street is innovating education around the world

Sesame Workshop, an educational programme derived from Sesame Street, reaches over 156 million children around the world. New, digital technologies, mobile telephony and every social media known to mankind are key to the successful use of a 40-year-old iconic concept for children, said the panel.

Sesame uses high tech to promote low tech. In other words, the alphabet can now be taught by Elmo on an iPad or smartphone to three to six-year-old kids, the workshop revealed. By using different languages and adapting to specific cultures and sensitivities, or by creating new Sesame Street figures (Tiger Lilly in China), Sesame adapts to the demands and needs of the youngest. Having obtained their attention, health, hygiene and nutritional values are promoted too.

The workshop highlighted that interconnectivity and access to technologies are crucial for the further development of Sesame's activities. Despite its cooperation with private and public sector entities, these are growing challenges. This was acknowledged by mHealth Alliance, which is trying to create a mobile health space and secure access to all health-related matters and issues by tapping into the use of smartphones.

Barriers, including trade related-ones, remain high, the workshop concluded. One just needs to think of the availability of more sophisticated mobile technology in rural or remote areas, the use of and access to sensitive or protected information, the costs of phoning and phones as well as roaming or surfing the net.

 

Workshop 4: Climate-related standards and the green economy: opportunities and challenges for developing countries in South Asia and East Africa

The proliferation of standards (international, public and private) can be challenging for the various stakeholders involved (exporting producers, local and national standardizing bodies), particularly in the developing world, in terms of participation in the standardization process and implementation. The risk of "green protectionism" is real, said the panel. The workshop discussed how increasingly standardized trade can spur sustainable economic growth by strengthening trading opportunities for developing countries. The panellists touched upon the challenges stakeholders are facing and the opportunities lying ahead. 

The panellists called for increased technical and financial support, at the national and international level, to improve data collection, to increase expertise, to help countries attend international meetings, to improve infrastructure, to raise awareness and to lower the costs of implementation. They encouraged the private sector to invest more and said climate change-related standards should not become a pre-condition for exports.

The panellists also called for a stronger partnership between stakeholders (local, buyers and international standardizing bodies) at the international level. The opportunities ahead include improving efficiencies, reducing costs, and adopting best practice. "Low-input" production would be advantageous for developing countries. Training in good agricultural practices is increasing in countries such as Kenya.

The Technical Barriers to Trade (TBT) Agreement is helpful for encouraging international standards, as are Aid for Trade and the negotiations on trade facilitation, for reducing carbon emissions. The panellists said they expect the WTO to play a monitoring role and to support attempts by the private sector to self-regulate.

 

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