An eBay Response to G20 Summit Call

By: eBay Inc. Staff

The G20 Declaration following last week’s Summit calls for work to identify new trade opportunities and facilitate trade flows. On that very point, Hanne Melin of eBay’s Public Policy Lab and Pierre-Louis Vezina of Oxford University published an article in the latest OECD Observer. It describes new trade patterns emerging thanks to technology.

The G20 Declaration underlines “the importance of trade as a key to economic growth, sustainable development and job creation”. It stresses the importance of inclusive growth and supporting small- and medium-sized enterprises.

In their article, Melin and Vezina show that those priorities – trade, inclusiveness and SMEs – can be enhanced through technology solutions such as those offered by eBay Inc. The authors describe how technology dramatically reduces information friction and can help create trusted cross-border relationships with customers: “This gives all businesses, no matter how small, a helping hand in crossing borders”.

Indeed, digital services innovation is opening up unparalleled opportunities for individuals and businesses of all sizes and provenance to participate in the global economy. We are witnessing the linking of local communities to global markets – a great promise to societies worldwide.

Of course, technology-enabled economic opportunity requires supportive policy action to deliver on its participatory promise. In his speech at the G20 Summit, OECD Secretary-General Angel Gurria reminded that “in many less developed economies, obstacles to effective participation in global markets” remain and he pointed to trade facilitation as a key to unlock participation.

Here, the International Business Dialogue set up by the OECD earlier this year could support the work requested by the G20 Declaration: the monitoring of trade and promotion of global trade liberalization by the WTO, the OECD and the UNCTAD.

Specifically, the G20 Declaration calls on the OECD to deliver a report in the first half of 2014 on the opportunities and challenges of participating in global value chains.

However, as described in the article by Melin and Vezina, global value chains are not the only way for SMEs to participate in the global economy. Internet technology services create an alternative path to global growth opportunities. A phenomenon called the Global Empowerment Network.

Therefore, to effectively identify new trade opportunities and facilitate trade flows, the forthcoming OECD report to the G20 should broaden the perspective and look at the conditions needed for well-functioning Global Empowerment Networks along side global value chains. That would provide useful and concrete input towards creating a global trade regime that works for everyone and helps address the challenges of restoring strong, sustainable and balanced growth.

“If offline information frictions were reduced to the level prevailing on eBay, the trade gains would translate into large increases in real income. These gains would be largest where they are most needed – in remote countries with bad institutions. E-commerce can thus be seen as a veritable development tool, as remote sellers from unstable countries integrate into world markets.” Lendle et al (2012) VOX EU

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