A Global Focus

4. TEL’s reference framework will help position APEC to play a lead role in the global expansion of electronic commerce initiatives. Such initiatives are recognised as a principal component of economic growth in the next century and also will position the member economies of APEC to bridge the development gap that continues in the region and to regain their economic strength.

5. Accordingly, in developing an action plan under the reference framework, TEL will collaborate with the APEC Task Force, where possible, and with other international organisations so as to share mutually in the benefits and to avoid duplication. In its plan, TEL will endeavour to ensure that the specific needs of APEC economies are met. Work also will be undertaken in close cooperation with other APEC fora, other organisations in the region, and between APEC member economies on a bilateral basis to ensure coordination in the Asia-Pacific region.

6. While involvement of the private sector has always been a hallmark of TEL’s activities, it is realised that the electronic commerce programme of TEL requires an expanded network of advisors from the communications and information industries. TEL is committed to working with PECC and other relevant organisations to develop this network and subsequent joint efforts for the promotion of electronic commerce.

The Challenges

7. TEL recognises that electronic commerce will be a key driver of business development and expansion and new trading mechanisms in the region. Business expansion will be based largely on business integration as well as on the provision of consumer products and services by electronic means.

8. Nevertheless, TEL has noted that there are challenges presented by the roll-out of electronic commerce. These challenges include the need to ensure that the telecommunications and information infrastructure continues to develop in a manner that supports electronic commerce, and the need to promote a stronger role throughout APEC for Small and Medium-sized Enterprises (SMEs).

9. In addition, measures must be taken to develop electronic commerce for the benefit of the whole region and to ensure that economies that rely on existing telecommunications and information systems are supported in the transition to electronic commerce.

Impediments to Electronic Commerce

10. The efforts of TEL will address many of the impediments to electronic commerce that exist in the region. The most fundamental obstacle to electronic commerce is inability to access and use the network infrastructure. Access and use are functions of:

• network capacity at local, country and international levels;
• cost of network access and use;
• availability and cost of access devices (telephones, personal computers); and
• availability of technical skills to facilitate access.

11. These issues lie at the core of TEL’s mandate, and TEL has actively pursued relevant liberalisation, human resource development and economic and technical cooperation activities to meet each of these challenges. 

12. Further impediments are barriers to market entry and competition in member economies, such as laws and regulations restricting particular industry sectors. Other impediments include economic disincentives to investment such as those caused by the fear of the impacts of systems failure, the absence of suitable business models, the “immature” state of the electronic marketplace, inadequate intellectual property protection, and the need to facilitate business and consumer confidence and trust. While the range of electronic commerce issues exceeds the mandate of TEL, its framework for action focuses on a variety of issues including those of trade liberalisation, business facilitation, the need for development and cooperation among member economies’ and human resources development.

Promoting Business-to-Business Electronic Commerce

13. It is anticipated that business integration activity over the next five years may account for up to ninety percent of the expansion of electronic commerce on basic, advanced and value-added networks. The Internet and other public networks also will play an increasingly important role as security and data protection are enhanced. Improved security and data protection will contribute to the confidence of SMEs in electronic commerce.

14. Business-to-business communications have been the focus of past activity of TEL. This remains a priority, with the particular emphasis on promoting SME involvement in e-commerce. Business-to-business communications is the basis for strengthening regional economies, ensuring broad-based access to networked infrastructure and for liberalising trade and attracting investment. Accordingly, TEL’s reference framework builds on work that already has been carried out or has been initiated recently to identify the issues for SMEs doing business over the Internet in the Asia-Pacific region. Further work will review the integration of SMEs into electronic commerce by measuring their usage and uptake, studying the cost to SMEs of the telecommunications and information infrastructure and services that underpin electronic commerce in the region and determining how SMEs can play a stronger role throughout APEC. TEL will promote a test-bed programme between interested SMEs in APEC economies to design, manufacture and market appropriate products.

Promoting Business-to-Consumer Electronic Commerce

15. Consumer transactions will expand from current levels and contribute to the growth of electronic commerce in the region, but expansion is not expected to occur at the same rate as business-to-business transactions. Consumer involvement will rely most directly on access to Internet connectivity and on standard telecommunication services linked to private networks. Increased consumer confidence in the reliability of networks, the security of networks and the protection of personal information, and affordability to Internet access to consumers are key to increasing their purchase of goods and services by electronic means in the region.

16. There also will be consumer and social involvement, in addition to the transactional activity noted above. It will focus on access to electronic services provided by both government and business. Governments, as model users, will spur the development of information, health, education, and community services. The provision of consumer services such as entertainment, financial, media, retailing, recreational support and travel will contribute to enhanced levels of consumer participation and overall levels of awareness and confidence. Economies of scale will unfold as networks and information services expand to serve both business and community needs.

A TEL Electronic Commerce Reference Framework for Action

17. The following reference framework is established to guide the development of a focused TEL work programme through each of its Steering Groups to promote electronic commerce in the Asia-Pacific region. The categories of actions that might be taken have been established in response to the need to access electronic commerce, raise awareness about the benefits, build confidence and trust, and to develop compatible approaches to the digital marketplace.

• Improving Access
  • promoting cooperation between the public-business/private sectors to expand and enhance access to robust, interconnected telecommunications and information services, so as to enable all citizens and businesses to take advantage of electronic commerce;
  • encouraging competition among providers of telecommunications and Internet capacity, leading to more affordable and higher quality services; and
  • discouraging market access restrictions or regulatory barriers that inhibit telecommunications and Internet service providers from entering the market and/or providing access to end users.
• b) Raising Awareness
  • developing and sharing a knowledge base on the economic and social benefits of electronic commerce on the Asia-Pacific region;
  • continuing its programme of activities, technology trials and pilot projects to demonstrate the practical benefits of electronic commerce;
  • promoting awareness of the benefits of electronic commerce and encouraging its use among SMEs in all member economies; and
  • encouraging governments and other public sector organisations to act as model users to promote electronic commerce.
• Building Confidence and Trust
  • building an understanding of business and consumer confidence in digital transactions and developing appropriate strategies to respond to identified needs across the region;
  • reviewing and contributing to international approaches for protecting the privacy of personal data; and
  • verifying the feasibility of digital transactions and authentication through electronic commerce test-bed pilot projects.
• Developing compatible approaches to the electronic marketplace
  • reviewing different approaches to authentication, which could include electronic signatures and electronic records among economies;
  • using the results of the surveys of legal and regulatory barriers to electronic commerce in the region, identify the essential elements of a legal and regulatory framework for electronic commerce;
  • encouraging all APEC member economies to remove existing and avoid the introduction of new legal, regulatory and other barriers to conducting electronic commerce in the region to the greatest extent possible and as soon as practicable; and
  • promoting the use of best practices on electronic commerce, e.g., the development of self-regulation measures by industry.

Further Support to the APEC Task Force on Electronic Commerce and Collaboration with Other Relevant Fora

18. In many cases, the priorities proposed in TEL’s reference framework for action are already being addressed by the four Steering Groups within TEL. Such electronic commerce activities influence and support the development of an APEC-wide workplan for electronic commerce by the APEC Task Force. Any new project activity in support of TEL’s framework for action that is identified at the next meeting of TEL in September in Papua New Guinea will be made available to the Chair of the APEC Task Force on Electronic Commerce.

19. The Task Force and other APEC Working Groups and Committees were represented at the APEC-PECC Electronic Commerce Seminar held in conjunction with the TEL meeting in Brunei in March 1998. Continued collaboration with relevant APEC fora such as the APEC Sub-Committee on Customs Procedures, Expert Group on Intellectual Property Rights, Policy Level Group on SMEs, the Human Resources Development Working Group, the Transportation Working Group, the Industrial Science and Technology Working Group and other groups supporting the APEC work programme in areas such as consumer protection, banking, finance or taxation issues. TEL stands ready to support electronic networking of relevant information within APEC.

20. TEL will also continue its close contact with relevant work in other international organisations including United Nations Commission on International Trade Law (UNCITRAL), Organization for Economic Cooperation and Development (OECD), International Organisation for Standardization (ISO), World Trade Organisation (WTO) and International Telecommunications Union (ITU).