E-Commerce Levels International Playing Field

Yesterday, U.S. Undersecretary of Commerce David Aaron reported that ministers at the WTO meeting in Seattle, Washington had agreed to keep the Internet tax-free, probably well into next year.

The Net has been officially, if temporarily, free of duties since 1998, and can now, with the impending formal agreement among nations, evolve without varying and extra trade barriers throughout the world.

But is the world ready for full-blown electronic commerce? Analysts seem resolute in their prophecy of a $2 to $5 trillion (US$) online marketplace by 2005, half of which is expected to be generated outside of the U.S.

Still, the speed at which electronic commerce is growing and the previously unheard of implications of that growth are daunting to some.

Beijing Meets Long Island

Even as communication continues to grow among countries across the world, many countries have chosen a form of commercial isolation over international cooperative trade. The Internet could change that. Consider:

If China embraces the Internet and discovers that its massive population gives it the power to compete commercially with Western markets, will it alter its concept of capitalism?

When Latin America fulfills its current promise of becoming the next major center of e-commerce, will its demand for imports directly and positively affect a number of other countries?

If delivery systems become more streamlined and reliable, is it possible that online business-to-business activity among all the countries in North America could suddenly create invisible commercial borders among countries?

If wireless communication adopts some form of international standardization, and devices come into widespread general use, is it possible that next year’s holiday online shopping might see a consumer in Texas purchasing silks from India?

Slow Cultural Change

All of these concepts are possible, but only if countries are willing to ride the current wave of electronic development and commerce. Some countries are cautiously optimistic, but not ready to take giant leaps.

In Germany, for example, only about 30 percent of companies are convinced that they could generate one quarter of their total revenue from online business, according to a recent pan-European marketing study by German consulting group CMG. In the past six months, the report indicates that Germans have taken on a new pessimism about e-commerce.

By contrast, other European countries cited in the report believe that more than a quarter of total revenue can be generated via e-commerce in two years’ time.

In other parts of the world, consumer demand may be the driving force for e-commerce to fully emerge. In Asia, a recent poll showed that 40 percent of current Internet shoppers plan to increase their spending over last year.

Widespread Optimism

If the WTO formally announces its decision to keep the Net tax-free — as is widely anticipated — a wave of optimism will likely sweep the globe. The differences among cultures will likely spark volatile trade situations, but also infuse world commerce with new dynamics.

Even seasoned businesspeople with proven track records are buckling their seatbelts and getting ready for the roller coaster ride of a lifetime.

Just last week, 68 year-old media mogul Rupert Murdoch, speaking about electronic commerce, told Oxford University students, “Change is not only accelerating, its direction and consequences are becoming less predictable. Governments will have to get out of the way of change.”