With the announcement of the Joint Declaration on Trade and Women’s Economic Empowerment at the WTO Ministerial Conference in December 2017, the issue of seizing the digital opportunity for women’s entrepreneurial freedom gained traction in global trade policy circles. Under the aegis of this non-binding framework for promotion of gender-responsive trade policies (signed on to by over 120 governments), a series of seminars/workshops have been organized at the WTO. These aim to facilitate exchange of learnings/insights on effective integration of women entrepreneurs in digitalising global value chains. Further, key global institutions such as the UNCTAD, WTO, and the International Trade Centre have all launched their own independent efforts for promoting women’s access to the digital marketplace.
A common thread uniting these disparate initiatives is the underlying assumption – articulated by Jack Ma at the WTO Public Forum 2018 – that that inclusive digital trade is about leveraging the digital opportunity for small businesses, women, young people, especially those in developing countries, and making trade rules easier and simpler. But is this overarching euphoria about the ideal of a liberalized, global digital marketplace justified? Evidence increasingly points us to the opposite conclusion.
Powerful e-commerce platform companies that provide the essential infrastructure for buyer-seller interactions in the digital age are continually mining data and digital intelligence about their members to game every facet of market exchange – from product search results to demand-supply matching and price determination. A market where the terms of participation are unilaterally set by the platform owner is proving inimical to the interests of small business.
Dominant platform companies charge steep membership fees/commission rates of nearly 40% and use deep discounting practices to expand their user base. Small size enterprises in developing countries, with low output levels and limited capacity to bear inventory and customer service overheads – usually, women-run – cannot survive on these terms.
In a 2018 public consultation on the impact of e-commerce platforms in India, a woman trader observed how big e-commerce can easily wipe out small businesses: “Amazon is like the Guppy fish in the pond. It will bide its time and swallow up everything until no one else is left. While we hope to have made a small margin at the end of each day, the platform cares only about turnover. Doesn’t matter if it is running on losses.”
Exiting and striking out on one’s own to establish an independent online presence is not a viable option. As research in the tourism sector in Indonesia (forthcoming) has found, small, women-run, home-stays are often faced with a Hobson’s choice: to stay independent and be resigned to low volumes of business or enlist on TripAdvisor and bear the brunt of their unfair terms.
Amazon is like the Guppy fish in the pond. It will bide its time and swallow up everything until no one else is left. While we hope to have made a small margin at the end of each day, the platform cares only about turnover. Doesn’t matter if it is running on losses.
Platform models are also taking over the agriculture and food retail sector, displacing traditional value chains and orchestrating a new market environment. From agro-inputs, to credit and logistics, markets are centrally controlled.. There are serious concerns here about how livelihoods and economic well-being of the majority of women in the global South are bound to be affected in the longer term.
The promise of e-commerce for women’s empowerment can be claimed only if countries take on a catalytic role in the digital marketplace. Firstly, competition law frameworks must be overhauled to prevent monopolies. Regulators also need to consider measures to tackle unfair use of algorithms by platform companies, for instance prioritizing their own products over other vendors.
Governments in the developing world must not sign away in trade deals their right to determine the extent to and conditions under which their domestic markets will be opened up to transnational platform companies. It should be possible, for governments, to impose a local sourcing quota for women’s producer organizations as a licensing conditionality for operating in specific domestic markets.
And finally, governments need to think of platform marketplaces provisioned as public goods to support small entrepreneurs – women producers/ micro-entrepreneurs/ artisans/ service providers and so on. Such interventions can create new digital infrastructure where techno-design principles operate on positive discrimination.
Ironically, Jack Ma’s ‘easy and simple’ digital trade paradigm, touted as the harbinger of gender inclusivity, completely displaces this very policy space that can establish a truly empowering e-commerce agenda for women.
Blocking the policy autonomy of developing countries to institute necessary measures for equity and inclusion in the name of trade-distorting protectionism, rich countries in the WTO seek to stall many critical provisions. These include mandatory disclosure/sharing of source code and algorithms for public scrutiny; market access conditionalities on transnational e-commerce platforms; and the introduction of data localization measures.
This hyper-liberalization of digital trade, and its hard-coding into binding rules through multilateral/ plurilateral processes can be more grievous and devastating for women in the global south than in any other previous round of trade globalization. Developing countries need to urgently find a way to come together to hold firmly to the ‘right to regulate’ digital trade, rejecting the dominant policy rhetoric on gender and e-commerce.