Trade in Digital Products and Opportunities for SMEs August 28, 2015 Jenny Wong Executive Director Time Warner Public Policy Asia-Pacific

Transcription

1 Trade in Digital Products and Opportunities for SMEs August 28, 2015 Jenny Wong Executive Director Time Warner Public Policy Asia-Pacific

2 Time Warner Who Are We? A global leader in media and entertainment with businesses in television networks and film and TV entertainment.

3 Trade in Digital Products

4 Digital Commerce

5 Digital Commerce Physical Goods Internet economy is transforming international trade by changing both how the world trades and who can trade. Using digital platforms, businesses of all sizes are finding new ways to deliver products reduce and/or achieve scale cut costs enhance marketing improve customer interaction access global consumers

6 Digital Commerce Physical Goods (1) Online Market Platforms - Ebay, Taobao Etsy describe themselves as a marketplace where people around the world connect, both online and offline, to make, sell and buy unique goods.

7 Digital Commerce Physical Goods (2) Direct to Consumers - Katie Hughes is a Charlotte, NC dance instructor and creator of an innovative elastic band that turns virtually any shoe into an aerobic dance shoe. - $15 Slip-On Dancers sells to cardio enthusiasts in more than 20 countries, from Australia to Europe. -

8 Digital Commerce Physical Goods (3) Business to business - Hoe Lui manufactures gifts, toys and premiums in China and sells them to sports teams and companies in the United States and abroad.

9 Digital Commerce Digital Products Internet economy is transforming international trade also changing what we trade.

10 Digital Products Digital products means*: Computer programs, text, video, images, sound recordings, and other products that are digitally encoded and produced for commercial sale or distribution, regardless of whether they are fixed on a carrier medium** or transmitted electronically. Includes products such as: software (productivity tools, security software, databases, design applications etc.) audio visual products movies and television programs video games digital images and products e-books music files * Drawn from language used in US trade agreements ** carrier medium means any physical object designed principally for use in storing a digital product by any method now known or later developed, and from which a digital product can be perceived, reproduced, or communicated, directly or indirectly, and includes, but is not limited to, an optical medium, a floppy disk, or a magnetic tape

11 Importance of Digital Products Digital and electronically-delivered products will be an important growth area of commerce with digital rollout and infrastructure fast increasing in the Asia Pacific region and advances in technology (for example, 3D printing).

12 Digital Products and SMEs / Opportunities Digital products can travel far and wide at negligible costs. With extensive automation and falling costs of machinery and technology (including 3D printers and robots), scale economies are less and less important. Creation of new opportunities for companies of all sizes, especially SMEs.

13 Digital Products and SMEs / Opportunities Fashion Continuum

14 Digital Products and SMEs / Opportunities Eye Glasses Protos design and alter a pair of glasses to fit an individual s unique features and accentuate facial features.

15 Digital Products and SMEs / Opportunities Cubify Cubify offers digital files that can be downloaded or sold for home printing or produced directly by Cubify printers using higher quality materials.

16 Digital Products and SMEs / Opportunities in Services Services to Support Digital Products - design, consultancy and technology services

17 Barriers to Trade in Digital Products Market access barriers impede the full potential of digital products. Digital products are costly to produce (R&D, production costs) and have high intellectual property content as well as value. By contrast, they cost relatively little to distribute. Growing trend towards data protectionism. Discriminatory treatment on certain digital products.

18 Proposals Sought For economies to reap the benefits of the trade in digital products, it is essential to create an economic framework where: borders remain open, unnecessary regulatory barriers are removed, operating environments are predictable and transparent, and digital trade is conducted without uncertain and burdensome customs measures that slow down delivery and increase costs.

19 Trade in Digital Products Recommendation Adoption of a zero tariff policy for the trade in digital products.

20 Expected Outcomes Open up the trade in digital products. Drive more inclusive trade in the global economy. Support growth in the Digital Economy.

21 Questions?

22 Appendix

23 Digital Trade is Important Digital products are at the cutting edge of innovation and creativity. Source: WIPO Studies on the Economic Contribution of the Copyright Industries (2014)

24 Digital Trade is Important Source: WIPO Studies on the Economic Contribution of the Copyright Industries (2014)

25 Digital Media Business in the U.S. The copyright industry is a major private sector employer in the US. In 2013: Industry supported 1.9 million jobs, and nearly $113 billion in total wages Contributed $15.8 billion in film and television exports Industry had a positive services trade surplus of $13.4 billion, or 6% of the total U.S. private-sector trade surplus in services Larger than the surpluses of the telecommunications, management and consulting, legal, computer, health related and insurance services sectors Source: MPA Report The Economic Contribution of the Motion Picture & Television Industry to the United States 2015

26 Detailed Trade in Digital Products Initiative Specifically, APEC Economies should adopt policies and measures to ensure that: Trade restrictions that discourage, disadvantage or prohibit the distribution of digital products conveyed electronically or on carrier medium are eliminated and avoided. Permanent, duty-free treatment for all electronically transmitted products is provided; making permanent the WTO moratorium on customs duties on electronically-delivered products. Permanent, duty-free treatment for all digital products on carrier medium is provided. Comprehensive definitions of digital products and carrier medium are adopted, with no digital products or sectors excluded.

27 Barriers to Trade in Physical Products Marshall School of Business study on physical supply chain chokepoints found: Lack of adoption of globally accepted customs standards is a significant chokepoint (>85% respondents) 5.46% improvement in customs efficiency would increase intra-apec trade by $27B Recommended: Accelerate harmonization efforts in customs requirements and procedures across APEC Source: University of Southern California. Marshall School of Business. APEC Supply Chains: Identifying Opportunities for Improvement 2011

28 Efforts to date APEC Leaders issued a Declaration Promoting Effective, Non-Discriminatory and Market-Driven Innovation Policy in At the forefront of that Declaration was a commitment to Develop and maintain an open economy that allows the flow of capital, people, ideas, goods, and services across borders in ways that ensure competition, enhance productivity and foster growth across the Asia-Pacific region. APEC should be urged to take leadership, just as it has with the ITA (Information Technology Agreement which removed tariffs on trade in ICT products.

29 Efforts to date In 1998, in recognition of the unique and enabling status of the Internet, the WTO issued the Geneva Ministerial Declaration on Global Electronic Commerce, extending an earlier moratorium on collecting customs duties on electronic transmissions. The moratorium has since been extended several times while the General Council examines all trade-related issues relating to global electronic commerce. However, a moratorium is only a temporary suspension. For digital trade to reach its full potential, the uncertainty of the moratorium needs to be lifted, and duty free treatment for digital products be made permanent.

30 ABAC 2012 Report to APEC Leaders Adopting a digital trade agenda for APEC ABAC supports open, duty-free cross border trade in digital and electronicallydelivered products and services and would like to see APEC establish a digital trade agenda to achieve that objective. Recommendations: Develop an action plan to secure open markets for digital and electronically delivered products. Commit to adopting policies and measures that foster digital trade, including by providing permanent duty-free treatment for all digital products.

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