Five things every worker should know about ‘digital trade’

Posted on October 23, 2019
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This month on the shores of Lake Geneva, activists, civil servants and entrepreneurs gathered at the WTO Public Forum to talk about trade. High on the agenda were the WTO’s e-commerce negotiations, which aim to create global rules for the digital economy. Platform companies like Google, Amazon and Uber are pushing governments to fix the new rules in their favour.

UNISON and the Trade Justice Movement hosted a session with panellists from India, Uganda and Europe to explore the potential impacts on workers. Here’s what we discovered.

1. Digital trade rules could put your job, wages and rights at risk

The digitalisation of work brings some advantages but many workers are losing out. Digital platforms are outcompeting brick-and-mortar businesses, causing a shift of workers from secure jobs into the gig economy. The ILO found this can lead to wages as low as $1.33 per hour, with some companies openly advocating below-minimum-wage rates on their sites.

The digital trade (aka e-commerce) rules being written at the WTO and in other trade agreements look likely to make this worse. These anti-rules will severely limit countries’ ability to regulate the digital economy or support the creation of local digital jobs. Meanwhile the e-commerce deal will grant tech companies major new ‘rights’ to penetrate markets, avoid local wage laws and worker protections, and treat their digitalised HR processes as ‘trade secrets’ that workers cannot ask to see.

Organisations who are resisting this process don’t aim to turn back the clock. Instead they want rules to manage the digital economy for workers’ benefit. Georgios Altintzis of the International Trade Union Confederation (ITUC) asked, “Should we stop this digital innovation? No - quite the contrary. We should be free and unafraid in thinking about how we spread the value it generates.”

2. Data is the new wealth, but workers are not getting their fair share

Data is a raw material that people generate through their work, which tech companies capture and turn into high value insights and products. At the moment tech companies take full ownership of this wealth, are often get extremely rich as a result: seven of the top ten companies by market value are tech firms.

The emerging digital trade rules would cement this model in place. They mandate ‘free’ cross border data flow and ban countries from requiring that data be processed locally. Localisation is likely to be a key precondition for declaring any kind of meaningful worker ownership over data, or to support positive alternatives like digital data commons and platform co-ops, so the new e-commerce rules could have a major impact on worker-owner distributions of wealth.

3. It will probably be worse for women

The WTO’s e-commerce proposals are presented as a means of womens empowerment. The dream is that women, especially in the Global South, will be able to run their own businesses and sell their products directly via platforms like Amazon. In reality they can do this already, but women face barriers that will be entrenched rather than solved by the new digital trade rules.

“Women-led enterprises tend to be small with thin price margins,” explained Nandini Chami, from the India-based organisation IT For Change. “The rates of commission they must pay to these companies are often unaffordable. They also cannot usually qualify for high product search rankings (e.g. Amazon BuyBox) and other features that would make them visible to customers.”

Digital trade rules are being written to lock in the advantages of these platform companies. They will secure their right to operate with no local presence, which means options like commission rate caps, intel sharing requirements and positive discrimination cannot be used to improve gender outcomes.

“Winner-takes-all has become the distributional ethos of the digital economy,” Chami concluded. “The e-commerce proposals currently being mooted will entrench inequality for women.”

4. It will probably also be worse for workers in the Global South

On top of the ‘pink-washing’, the emerging digital trade agenda is presented as a key development initiative for the Global South. Analysis by Martin Luther Munu, formerly of the Economic Policy Research Centre Uganda, suggests this is a grave misrepresentation.

“African countries have low digitalisation capabilities and very high unemployment rates,” Munu explained. “We need to examine the implications of the emerging digital trade rules on manufacturing jobs. We should also retain the freedom to enhance the role of the state in digitalisation so we can create high-quality jobs, and to support the empowerment of workers in the gig economy.”

Workers in the South are likely to be some of the biggest losers from current models of 'data extractivism', as their work produces insights and products that they often cannot afford to purchase, and that may ultimately put them out of work through automation. “Digital technology operates within the framework of increasing private ownership (capture),” Munu explained. “We instead need to control cross border data flows and harness the economic value of data.”

5. We can stop this, but we need to act fast

The WTO's e-commerce rules are being drafted right now. The 76 countries involved in the negotiations hope to have a deal drafted by June next year. The rules are advocated most strongly by the US so they are likely to crop up in a UK-US trade agreement too.

After Brexit, the UK will have to decide whether to join the WTO negotiations, and how to handle digital trade in future trade agreements. Understanding of this issue in political spaces is very low, and most political parties do not have established policy positions. This gives us a wide open window through to achieve a shift in direction.

If we can persuade the next UK government to take a more progressive way forward on digitalisation, this will be a huge blow to the WTO process. Sources suggest that many countries are taking part only through a wish to be 'at the table rather than on the menu', so the non-participation of a major post-industrial economy may sow doubt among participants and help to scupper the negotiations.

Coupled with growing civil society pressure from groups around the world, this could contribute to a major change of direction. There is a real chance here to block the creation of harmful digital trade rules. This would leave room to regulate for a worker-friendly digital economy that properly shares value and supports decent work.


By Laura Bannister, Trade Justice Movement. This piece was originally published by Left Foot Forward and is available at https://leftfootforward.org/20...