The growing role of data and cross-border ecommerce in the world economy and Latin America and the Caribbean - Intergovernmental Group of Experts ...
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The growing role of data and cross-border
ecommerce in the world economy and Latin
America and the Caribbean
Intergovernmental Group of Experts on E-Commerce (IGE)
and the Digital Economy
Sebastián Rovira, ECLAC
Geneva, 3 April 2019
• Trends on digital globalization and barriers to
cross-border data flows
• The unexploited dimension: intraregional
Content flows
• Factors to improve cross-border e-commerce
• Regional cooperation: Digital agenda for Latin
America and the Caribbean eLAC2020Trends on digital globalization and barriers to
cross-border data flowsOnly one thing is certain, the world economy
has experienced intense digital globalization
Cross-border global flows
(2003 Index = 100 and Tbps)
7000
600
6000
500
5000
400
4000
300 3000
200 2000
100 1000
- 0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Exports of goods Service exports
Foreign direct investment Other financial flows
International bandwidth (right axis)
Source: ECLAC based on data from IMF, WTO, McKinsey Global Institute and TeleGeography.Digital trade has become increasingly more
important globally but also regionally
Latin America and the Caribbean: Digital trade (services potentially enable by ICT) and
merchandise exports, 2005-2017
(Index 2005=100)
300
250
200
150
100
50
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Digital trade (Services potentially enabled by ICTs exports) Merchandise exports
Source: ECLAC, based on WTO (2019)Global B2C e-commerce is growing fast, especially
cross-border
Global B2C e-commerce: growth and participation of domestic and cross-border trade, 2014-2021
(In billions of dollars and percentages)
A. Global e-commerce B. Participation of domestic and cross-border trade
5 000 4 878 100%
4 500 4 135 90% 15 16 18 21 24 27 29
4 000 3 453 80%
3 500 70%
3 000 2 842
60%
2 500 2 304
1 845 50%
2 000 1 548 40% 85 84 82 79
1 336 76 73 71
1 500 30%
1 000 20%
500 10%
0 0%
2014
2015
2016
2017
2018p
2019p
2020p
2021p
2014
2015
2016p
2017p
2018p
2019p
2020p
Domestic Cross border
Notes Data : from 2018 to 2021 are projections in the case of panel A and data from 2016 to 2021 in the case of panel B.
Source: ECLAC, on the basis of data from eMarketer (panel A) and AliResearch and Accenture (2016), Global Cross Border e-Commerce Market 2020 (panel B).Barriers to cross-border data flows
Local Storage
A copy of data
Barriers to cross-border
Local Processing
Data must bedata flows
must be stored Illegal transfers
locally to be
transferable stored and Conditionality
Data must be
processed
Data can be domestically stored, processed
processed outside and accessed Data cannot be
the country It implies the domestically
construction of transferred unless
local data centres Data transfer is the receiving
for businesses prohibited even countries
within the same guarantees a
firm (holding to determined level of
partner) data protection
If conditions apply:
no restrictions to data transferPolicy responses to digitalization have been very
diverse
The Digital Trade Restrictiveness Index (DTRI) • The index shows that policy
responses to digitalisation
have been very diverse.
• China is the most restricted
country in digital trade, follow
by Russia, India, Indonesia and
Vietnam.
• In the top five group of the
most digitally open economies,
New Zeland is followed by
Iceland, Norway, Ireland and
Hong Kong.Different types of restrictions
The Digital Trade Restrictiveness Index (DTRI)
Tax restrictions Establishment restrictions
Brazil China
China Ecuador
Argentina Germany
United States United States
Rep. Of Korea Brazil
Paraguay Colombia
0 0,2 0,4 0,6 0,8 0 0,2 0,4 0,6 0,8
Data restrictions Commercial restrictions
China China
Germany Argentina
Rep, Of Korea Brazil
Mexico Ecuador
Colombia Rep, Of Korea
Peru Mexico
0 0,2 0,4 0,6 0,8 0 0,2 0,4 0,6 0,8The unexploited dimension: intraregional flows
Key findings of the empirical evidence
The effect of distance is
Language is the main
reduced but not Payment systems and
1 determinant for cross- 2 3
eliminated online (home- package delivery matter
border ecommerce
bias)
➔ Transaction costs associated ➔ Even if the costs of ➔ The improvement of online
with language barriers transport, search and other payment systems and parcel
increase when moving from trade barriers are reduced, delivery offer the best
traditional to online the effect of distance
option in terms of policy
commerce persists
➔ To what extent can the ➔ The effect varies according ➔ Due to diseconomies of
policy affect this variable? to product: Physical / digital scale in the delivery of
goods packages and physical
transport costs can increase
➔ Taste matters (music and online
software)The unexploited dimension: intraregional flows
Distribution of flows between intraregional (short haul) vs. interregional
(long haul), 2014, % of world flow
GOODS FDI
SERVICES
Short haul (intraregional)
Short haul (intraregional) Short haul (intraregional)
Long haul (interregional)
Long haul (interregional) Long haul (interregional)
36
DATA PEOPLE 46
47 54
64 Short haul (intraregional) 53 Short haul (intraregional)
Long haul (interregional) Long haul (interregional)
33 35
67 65
SOURCE: UNCTAD; UN World Tourism Organization; TeleGeography, Global Internet Geography; IMF; McKinsey Global Institute analysisPotential for cross-border e-commerce at regional
level
Domestic vs. cross-border e-commerce marketplaces, Top ecommerce sites in Latin America, ranked by unique
2017 visitors (millions), May 2018
Rest of the world 97 3 MercadoLibre 56,3
Amazon sites 22,4
Latin America and the
82 18 B2W Digital 16,1
Caribbean
Alibaba 11,8
United States 66 34 eBay 9,5
Cnova 9,1
European Union 62 38 Apple sites 8,4
Walmart 7,7
Asia-Pacific 57 43 Google Shopping 7,5
Buscapé 6
0 20 40 60 80 100
%
Domestic Cross-border
Source: Forrester and Channel Advisor. Source: eMarketer based on Comscore, 2018The deepening of regional integration offers answers to several challenges the region is facing today • Enhancing export diversification and value addition • Reducing vulnerability to commodity prices • Promoting the internationalization of SMEs • Reducing exposure to an escalation of protectionism • In mining, plurinational technology centers to develop new applications of shared resources such as lithium • Advancing towards a regional digital market that promotes the diversification of the region's exports
Factors to improve cross-border e-commerce
To improve its participation in cross-border
e-commerce, the region faces 4 challenges
Human capital: Regulatory Inefficiencies in International
digitalization convergence: trade logistics, customs payment systems are
increased faster than and integration and postal services: inadequate: there is
human capital supply agreements lack generate delays and a lack of banking
for advanced ICT adequate provisions on increase the costs of interoperability and
sectors cross-border e- international high transaction costs
commerce shipments persist#1: human capital
Latin America and the Caribbean: Level of development of digitalization and human capital for advanced ICT
(Composite indices, where 50 is similar to advanced countries)
60
49 50 51
50 46
43
38 40
40 35
33
30
30 26 25
24
22 23 23 22 22 22 22 22 22 22
21
20 21 20 21 21
20
10
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
digitization index human capital index
Source: ECLAC, on the basis of Katz, F. Callorda and M. Lef (2016), Business initiatives and public policies to accelerate the development of a Ibero-American digital ecosystem,
Madrid, Ibero-American Council for Productivity and Competitiveness (CIPC) / Cotec Foundation for Innovation.#1: human capital
Latin America and the Caribbean (selected countries): Transactions and Internet users
6000
5000
Average Number of Transactions
Argentina
Brazil
Ecuador Uruguay
4000 Costa Rica
Peru Mexico
Chile
3000
Colombia
2000 Dominican Rep.
Panama
1000 Bolivia Paraguay
Honduras Guatemala
El Salvador
Nicaragua
0
20,00 30,00 40,00 50,00 60,00 70,00 80,00 90,00
% Internet Users (ITU 2017)#2: convergence of national regulations
Latin America and the Caribbean: Provisions on electronic commerce Intra-regional trade in Latin America and the
in selected agreements (Percentages of total agreements) Caribbean
Trade without paper support 59
Customs duties 48 Andean Community
Cooperation 41
BO, ECU
Electronic authentication and signature 38
Cross border transfer of information 38 COL,
Non-discriminatory treatment of digital… 38 PER
Pacific
Protection of online consumers 34 Mercosur
Alliance
Spam 17 ARG,
CHL, BRA,,
Brand for national electronic transactions 17 MEX PRY,
Protection of personal information 14 URY,
Location of computer facilities 0 VNZ
Original codes 0 Central America
Common Market
0 10 20 30 40 50 60
GTM, SLV, HND, NIC, CRI
%
Sources: ECLAC, on the basis of Giordano (Cord.) (2017), Beyond recovery. Competition for markets
in the digital age. Washington, DC: IDB# 3 logistic inefficiencies
Selected countries and regions: Postal development, 2018
(Index from 0 to 100 from the lowest to the highest level)
Reliability
80
60
40
Total Accessibility
20
0
Resilience Relevance
Africa Latin America and the Caribbean Asia Pacific Industrialized countries
Source: ECLAC, on the basis of Universal Postal Union (2018), Postal Development Report 2018# 4: adequate international payment systems
Selected countries: over 15 years with a credit o debit card, 2014
(As a percentage of the total of people over 15 years)
Trinidad & Tobago
Brazil
Chile • Low bank penetration
Venezuela • The difference between the country
Argentina with the highest and lowest
Uruguay
Colombia penetration is, in credit cards of 36.3
Mexico p.p. and on debit cards of 47.9 p.p.
Ecuador • The compensatory payment systems
Panama
Bolivia of ALADI, ALBA and MERCOSUR are
Domenican Republic currently in disuse.
El Salvador • Private initiatives like PayPal have an
Peru
Guatemala incipient or nonexistent presence, as
Honduras in the cases of Google Wallet, WePay,
Paraguay Stripe, and Dwolla.
Haiti
0 10 20 30 40 50 60 70
Credit card (% age 15+) Debit card (% age 15+)
Source: World Bank. 2014. Global Finance Inclusion Database.Regional cooperation: Digital agenda for Latin America and the Caribbean eLAC2020
Digital agenda
eLAC2020
At the Ministerial Conference of Cartagena,
Colombia (April 2018), the eLAC2020
Agenda was defined with the participation
of 23 ECLAC countries, 17 from Latin
America and 6 from the Caribbean, and IT HAS THE OBJECTIVE OF BEING A
Germany and Spain as observer countries. CATALYTIC INSTRUMENT FOR THE
Likewise, they accompanied COORDINATION OF THE EFFORTS OF
representatives of UNESCO, UNIDO, ITU, REGIONAL COOPERATION IN DIGITAL
OAS, IDB, CAN and the EU, among others. MATTERS.
In this instance, Colombia assumed the
Chair of the eLAC mechanism until 2020.Start and evolution of eLAC
eLAC emerged in 2005 as a regional response to the World Summit on the Information Society
and constitutes a political commitment to reduce the digital divide and promote access and
use of ICTs to enhance the social, economic and cultural development of the countries of Latin
America and the Caribbean.
eLAC2015 eLAC2018
eLAC2007 ActionPlan Digital agenda eLAC2022
ActionPlan Brasil 2030
Lima México SDGs
Rio de Janeiro
2008 2013 2018
2005 2010 2015
WSIS
eLAC2010
ActionPlan eLAC2015 eLAC2020
Digital agenda
2020 2030
San Salvador ActionPlan
2003 . 2008 Montevideo Colombia
Gineva-TunisDigita agenda The Digital Agenda includes 7 areas of action with
their respective Working Groups, 30 Objectives and
eLAC2020 a Regional Cooperation Activities Program.
1. Digital infraestructura
- Paraguay 2. Digital transformation and
digital economy – 3. Regional digital
market - Brasil
4. Digital
GEALC
egov– RED
Colombia
Governance for the
5. Culture, inclusión and
skills– México 6. Emerging technologies for
sustainable development– RED
GEALC
7. information society -
Argentina
In the framework of these Action Areas, different activities are carried out, such as
the identification of good practices in different topics, the formulation of
recommendations, the preparation of guides, the holding of workshops, studies and
reports and the exchanges of experiences, among others.Actions to promote cross-border e-commerce • Promote the regional digital market (e-LAC Agenda) - Generate conditions for international data exchange - Promote trust and the security of digital space • Improve the interoperability of digital regulations • Promote and simplify trade financing - Digitization and alternative finance (blockchain) - Payment platforms and online financing (FinTech) • Modernize logistics in general and postal services in particular - Expand the “Exporta Fácil” (Easy export) program to express services - Modernize customs processes • Reduce the costs of cross-border online payments
Thank you!
https://www.cepal.org/es/proyectos/elac2020
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