Jack Ma aspires to free the invisible hand of e-trade

Jack Ma, the executive chairman of Alibaba Group has a dream. A dream where political barriers to global e-commerce and cross border trade no longer exists.

Speaking at the Boao Forum for Asia, the founder of the Chinese e-commerce giant called for the establishment of a virtual, borderless economy not constrained by politics. The vehicle for achieving this ambitious dream: the World e-Trade Platform or eWTP, a business-driven, Internet-based platform that would function something like the World Trade Organization — but ideally without all the controversy.

An open virtual economy inclusive of developed and developing countries
Ma reportedly wants to make cross border trade simpler, minus the rules and laws some believe ineffectual, to move trade faster.

As envisioned, businesses would drive the eWTP with governments, NGOs and other organizations participating to formulate international rules that eliminate perceived barriers to e-commerce and help small businesses and global consumers participate in cross-border trade. The online platform would be open to a wide range of stakeholders including SMEs and would not be dominated by governments and multinational corporations.

With the platform, Ma says he intends to help “the 80% of companies and developing countries that cannot participate in world trade,” adding, “It is not the purpose of the eWTP to destroy the WTO, but to try to destroy trade protectionism.”

The democratizing power of technology
The explosive worldwide growth of e-commerce is spawning new business models and has the potential to spark fundamental changes in the way international trade is conducted by eliminating costly layers of intermediaries and shortening global supply chains. At the same time, the borderless, relatively frictionless nature of e-trade offers small-and medium-sized businesses everywhere unprecedented access to global markets.

A call for harmonization of regulations
However, while opportunity is in sight, cross-border e-commerce still faces a number of challenges, not the least of which being the inconsistent delivery of products across borders because of inefficiencies in international logistics and customs procedures.

“For a product to enter a country there might be 10 agencies you have to deal with,” said Luis Alberto Moreno, president of the Inter-American Development Bank and eWTP panelist at the Boao event.

Another eWTP panelist and CEO of US-based infant formula maker Mead Johnson, Kasper Jakobsen agreed that global import regulations needed greater uniformity. “The biggest barrier to expanding [trade] platforms across boundaries is so many products have to comply with different regulations in all the markets they are sold in,” Jakobsen said.

Panelists agreed backing for the eWTP proposal should be sought from world leaders at the upcoming G20 summit, scheduled for September in Hangzhou, China, where Ma’s Alibaba Group is headquartered.

Tags: Alibaba, global e-commerce, cross-border

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