Electronic commerce

Electronic commerce: The Economic Significance of Electronic Commerce

Electronic commerce: The Role of the WTO

Electronic commerce: Trends in Electronic Commerce

Electronic commerce: The Role of Electronic Commerce in the Modern World Economy

Electronic commerce, or e-commerce, has no settled definition. At its broadest, electronic commerce involves conducting business using most modern communication instruments: telephone, fax, television, electronic payment and money transfer systems, electronic data interchange, and the Internet. On September 25, 1998, the World Trade Organization (WTO) General Council adopted a broad view of electronic commerce in its work program on the subject: ‘‘The production, distribution, marketing, sale or delivery of goods and services by electronic means.’’ In more recent times, the term ecommerce has become strongly associated with commercial activities on the Internet. For instance, the Organisation for Economic Co-operation and Development’s discussions of e-commerce concentrate almost exclusively on Internet-based transactions.

In this article, electronic commerce is conceived of as conducting or facilitating business via electronic communications networks and computer systems. This includes buying and selling online, electronic funds transfer, business communications (including by telephone, facsimile, and internal data networks), and using computers to access business information resources. The WTO has recognized that commercial transactions can be broken into three stages: (1) advertising and searching, (2) ordering and payment, and (3) delivery. Common conceptions of electronic commerce involve business-to-consumer or business-to-business interaction at one or more of these three stages. Generally speaking, however, electronic commerce also encompasses activities that do not fit neatly into any one of these categories, such as electronic logistics tracking and business process outsourcing.

The Internet is of such critical importance to the world economy today that it necessarily dominates any discussion of electronic commerce. It offers greater possibilities for commercial interaction than do telephones or faxes, and has dramatically changed the way that information is exchanged and business conducted. The definition of electronic commerce adopted here deliberately extends beyond the Internet, however, not only to capture itspredecessors, but also in anticipation of future technologies. Ifwe have learned anything from the rapid development of computer and telecommunications technology over the last few decades, it is that what seems like an established technology today can quickly be replaced by another technology. The safest prediction about the future direction of technology is that it will be unexpected. Thus, as ubiquitous and permanent a feature of modern life as the Internet seems now, it may be replaced, and it is therefore appropriate to use a definition that is technologically neutral and forward looking.

See also digital divide; General Agreement on Tariffs and Trade (GATT); General Agreement on Trade in Services (GATS); information and communication technology; trade in services; World Trade Organization

FURTHER READING

• Borenstein, Severin, and Garth Saloner. 2001. ‘‘Economics and Electronic Commerce.’’ Journal of Economic Per spectives 15 (1): 3 12. An effective introduction to many of the economic issues surrounding electronic commerce and to a symposium on economics and electronic commerce. 
• Mann, Catherine, Sue Eckert, and Sarah Knight. 2000. Global Electronic Commerce: A Policy Primer. Washing ton, DC: Institute for International Economics. Aimed at assisting policymakers, particularly those in develop ing countries, with formulating an appropriate response to e commerce and to use it to facilitate development. 
• Organisation for Economic Co operation and Develop ment, Working Party on the Information Economy. Online Payment Systems for E Commerce. OECD Doc DSTI/ICCP/IE(2004)18/FINAL (18 April 2006). Analyzes the recent development of online payment systems for e commerce, covering different payment mechanisms, the extent to which these different systems are used, and the implications of industry characteristics and network effects. It discusses drivers and impedi ments to the uptake of payment systems and identifies some policy issues for further examination. 
• UN Information and Communication Task Force. 2005. WTO, E Commerce, and Information Technologies: From the Uruguay Round through the Doha Development Agenda (Series 7). Prepared by Sacha Wunsch Vincent, this paper provides a comprehensive analysis of the WTO’s engagement with e commerce as well as some useful research into key areas of electronic commerce. 
• World Trade Organization, Secretariat. 1998. Electronic Commerce and the Role of theWTO. Lays out the relevant policy issues for electronic commerce and the WTO, includingthe legal andregulatory framework for Internet transactions, security and privacy questions, taxation, access to the Internet,market access for suppliers over the Internet, trade facilitation, public procurement, intel lectual property questions, and regulation of content. 
• Wunsch Vincent, Sacha. 2006. TheWTO, the Internet, and Trade in Digital Products: EC U.S. Perspectives. Oxford: Hart. A neutral and thorough reference work examining European Community and U.S. perspectives on digital products (that is, digitally delivered movies, music, and software), and the response of international trade rules, in particular those of the WTO.

 ANDREW D. MITCHELL