by Arndt Hopfmann
by Arndt Hopfmann
Report on the working session 42, WTO Public Forum 2019
On 9th October 2019, SEATINI-Uganda and the Rosa Luxemburg Stiftung-Brussels organized a working session on a theme “Construction of the Digital Industrial Path in Africa: What is the role of the Youth”. The Panel was moderated by Dr. Arndt Hopfmann (Senior Advisor on Economic and Trade Policies to the Rosa Luxemburg Stiftung-Brussels), and featured Ms. Vahini Naidu (Director of External Trade-Department of Trade and Industry, South Africa); Ms. Jane Nalunga (Country Director, SEATINI-Uganda); Mr. Munu Martin Luther (Trade Policy Analyst); and Mr. Yorgos Altintzis (Economic and Social Policy Officer, ITUC).
In his opening remarks, Arndt Hopfmann noted that the agenda to advance e-commerce and digital trade issues in the WTO is intense, if not aggressive, with a group of countries in the WTO wanting to negotiate multilateral rules on e-commerce. He reiterated that while there is no WTO-mandate to negotiate multilateral e-commerce rules, this agenda has surpassed and distracted Members from the mandated work in the WTO under the current Doha Development Agenda. In conclusion he pointed to the challenges to bring together the digitalization of the economy and the creation of decent jobs, in particular for the Youth – in particular but not only in Africa.
The panelists raised the challenges to Africa when it comes to e-commerce. One of the key difficulties is limited internet connectivity, whereby an overwhelming majority of people on the African continent do not have any means of accessing the internet, and the less-than-quarter of the population who has access – are mostly from urban areas, enjoying a higher than average standard of living. They also discussed the e-commerce rules being proposed by Developed Countries which have far reaching negative implications on the policy space; revenues, employment and technology transfer to Least Developed Countries in general and Africa in particular.
From the session, panellists and participants recommended key takeaways for Africa which is in the process of developing her Digital Strategy:
- While it is clear that e-commerce is developing rapidly across the globe, this development is highly uneven, asymmetrical, with e-commerce (both in platforms, sales, revenues and jobs) is extremely concentrated amongst a few countries. Indeed, critical segments of the digital economy and e-commerce are highly oligopolistic, replete with instances of rent-seeking, anti-competitive practices, tax evasion, and associated with a weakening of labour conditions.
Figure 1 Panellists during the session R-L: Dr. Arndt Hopfmann; Ms. Jane Nalunga, Ms. Vahini Naidu, Mr. Yorgos Altintzis and Mr. Munu Martin Luther.
- Current e-commerce rules being pushed will risk putting Africa into the “rushing entrepreneur trap” given the continent’s underdeveloped digital infrastructure. This trap would make Africa a developer of third and fourth tier services for USA and China, thus ushering in “digital colonisation”.
- Favourable horizontal policies for a digital industrial path i.e. infrastructure, education, accessibility and institutional support should be supported and emphasized, rather than constrained.
- African countries also need to be more innovative in how they raise funding for digital industrialization. If African countries do not agree to any moratorium on customs duties on electronic transmissions, the money collected can be used to finance digital industrialization such as an African cloud, regional and continental data centers and a continental digital skills academy.
- Digitalisation should be linked to key sectors that are important for Africa, including agriculture, manufacturing and services trade.
- Africa will require data governance frameworks that govern the ‘ownership’, management and control of her data and build data centers to develop her data processing skills.
Dr. Arndt Hopfmann is Senior Advisor on Economic and Trade Policies to the Rosa Luxemburg Stiftung-Brussels