CHALLENGES IN DEVELOPING POLICIES TO SUPPORT ELECTRONIC COMMERCE

Electronic commerce is attracting increasing attention from policy makers at the national, regional and international levels. It presents a number of challenges that are highly distinctive. First, the speed of development in electronic commerce and the speed of the changes that it brings strain the processes of traditional policy formulation. Second, the issues cut across a broad range of technical, legal, economic and institutional questions that have often been treated organizationally in separate ways by different entities. Third, policy makers are confronted with acutely different participation in electronic commerce and with participants having different levels of awareness of its implications and consequences. Both within and between countries, there are striking disparities in infrastructure development, as well as technical and economic access to the Internet. Fourth, electronic commerce is conducted on a global medium which requires international coordination and uniformity of approach in order for it to be exploited effectively and to its full potential. Finally, special attention is needed to ensure that all developing countries have the potential to benefit from these new processes.

ICT and electronic commerce can be expected to drive the trade component of economic growth for many years to come. Trade transactions conducted through the Internet and the World Wide Web will have enormous implications over the next few years for Asia's international competitiveness. New opportunities will emerge in the domestic and international markets, giving Asian firms the opportunity to be part of the global trading system and the potential to create tens of thousands of new jobs. At the same time, electronic commerce will provide new opportunities for overseas firms to access regional markets. It will also bring parts of the Asian service economy into the international trade sector for the first time. For many firms in the region, these developments will be unsettling and uncomfortable.¹⁷

To realize the potential of electronic commerce, however, governments and the private sector must work together to create a predictable legal framework, to ensure that the Internet is a safe business environment and to create human resource policies that endow workers and the populations at large with the skills necessary for jobs in the new digital economy. An appropriate trade policy response from the countries of the region is required. Such a trade policy response has certain domestic features, geared to the particular needs of countries, and regional and international policy elements to foster global trade. Features of regional and international electronic commerce policies could include:

• Ensuring that the region can make a significant contribution to the legal and regulatory framework for the technological developments underpinning the international environment, particularly in negotiations to develop that environment
• Developing principles for the conduct of cross-border electronic commerce to minimize the risk that countries develop fundamentally different approaches
• Promoting liberalization of trade in services benefiting firms and countries in the region, especially the developing countries and the small business sector
• Ensuring that the potential of electronic commerce is not diminished by a new generation of non-tariff barriers

Practical ways in which a national electronic commerce policy could assist firms, large and small, to operate successfully in international electronic commerce include:

• Ensuring that a domestic regulatory and legal environment that supports a vigorous on-line economy is created in the countries of the region
• Promoting such a domestic environment that is at least comparable with or better than the environments being created for on-line firms by the region's major trading partners
• Ensuring the close integration of trade, economic, industrial and social policies
• Increasing business awareness of electronic commerce and the opportunities that it offers on international markets
• Consulting and fully involving industry and other stakeholders in the development of strategies to advance electronic commerce

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