What is eWTP, and why you should care
2016 was a record year for Tmall Global, Alibaba’s online platform that enables international brands to sell directly to Chinese consumers. The number of imported product categories available on Tmall Global climbed almost 50% to 3,700, with offerings from more than 14,500 international brands from sixty-three countries.
And it wasn’t just the number of products available that broke records, sales grew just as strongly. Alibaba said Tmall saw new highs in overall transactions, in orders from overseas merchants shipped from bonded warehouses within China, and in orders shipped directly to Chinese consumers’ homes from overseas.
But for Alibaba founder Jack Ma and CEO Daniel Zhang, this is just the start. Alibaba’s Alizila news service reported that at a conference devoted to cross-border e-commerce in late December, Mr Zhang envisioned “a future of frictionless, borderless e-commerce.” This vision is based on Jack Ma’s push for the establishment of what he calls the Electronic World Trade Platform, or eWTP, an international agreement that would remove trade barriers that currently make it difficult for small- and medium-size enterprises (SMEs) to buy and sell globally – a sort of World Trade Organization for e-commerce.
In fact, Mr. Ma sees the eWTP as a complement to the WTO. You can read Alibaba’s “eWTP Fact Sheet” here, but the short version is that Ma sees the eWTP as “an international organization with the overall goal of making it easier for SMEs to take part in global trade via e-commerce by simplifying regulations, lowering barriers to entry to new markets and providing small businesses with easier access to financing.” Of course, achieving this goal would require governments around the world to agree to a reduction in tariffs and a streamlining of customs-clearance procedures – at a time when nationalistic pressure around the world is pushing governments in just the opposite direction.
Mr Ma pitched his idea at the G20 summit in Hangzhou, China, last fall, and met with a reasonably warm reception. The G20 Leaders Communiqué, issued at the end of the summit, included a statement that the group had taken note of Ma’s eWTP proposal, and that it supported policies that would “encourage greater participation, value addition and upward mobility” in the global economy.”
Following the G20 Summit, Mr Ma met with Director General Roberto Azevêdo, who later issued the following statement: “Trade has been at the top of the agenda here in Hangzhou at both the G20 and B20 summits, with leaders calling for trade to be at the heart of efforts towards global growth. As part of this, we must trade more inclusively, allowing everyone to take part and feel the benefits. That means trade must work for SMEs.”
What next? Supportive statements like those from the G20 and WTO are encouraging, but real progress toward Mr Zhang’s “future of frictionless, borderless e-commerce” is going to take more than kind words. Still, if the last decade is anything to go by, betting against Jack Ma hasn’t worked out too well, has it?
