World Trade E-commerce Plan Gaining Momentum

By David Molony at CommunicationsWeek International20 September 1999  

A project to develop a global electronic commerce infrastructure for international trading companies is rapidly gaining momentum with backing from international trade associations and multinational companies.

The plan to establish e-commerce hubs in world trade centers in as many as 110 countries received a major boost as it emerged that it is set to get vendor financing from some of the e-commerce industry's biggest equipment suppliers.

And major international services corporations already are showing interest in the Global Electronic Commerce (GEC) network as a system that has more extensive end-user reach than established network service operators.

In a parallel development, the geopolitical authority of the project has been enhanced by an agreement with the International Telecommunication Union, Geneva, which wants to redirect some of its revenues into e-commerce projects in developing countries.

But there are early indications that communications service providers, which have yet to find a role in the project - and could find themselves competing with it - may be unhappy about ITU involvement.

But the World Trade Center Association is now talking up the initiative's prospects.

"We had a real close look at the ... project and we're really on fire about this," said Herbert Ouida, executive vice president of the WTCA and co-chairman of the WTCA's communications committee.

The project began as an ITU experiment in packaging e-commerce technology for markets that could not afford proprietary systems. But the idea was taken up by the World Trade Center in Geneva, which established its own company to commercialize the scheme.

Now the project is beginning to take shape following a series of major developments. Last week Oracle Corp., of Redwood Shores, California, was set to announce it would join a consortium of e-commerce vendors and integrators in the GEC project.

These companies, which already include IBM and corporate directory supplier Kompass International SA, Cruet, France, will supply equipment and services to world trade centers that decide to set up as e-commerce service providers.

The vendors will recoup their investment through transaction fees on the international e-commerce traffic generated on the network.

Key administrative details are also being tackled. The WTCA, based in New York, is keen to take on the mantle of global certification authority for individual world trade centers that want to become e-commerce service centers.

"We will set standards for our members to become certification authorities," said WTCA's Ouida. "The WTCA will be a super-certification authority."

Carlos Moreira, chief executive of ECCE SA, Geneva, a joint venture company that has developed an e-commerce pilot service for the Geneva World Trade Center, and which would be a principal integrator for other WTCs if they decide to follow the Geneva center, said vendors would earn royalties from transactions on the GEC network.

Similarly, the GEC would provide a form of levy on transactions, which, in accordance with an agreement with the ITU, would be placed in a trust fund for developing economies.

ITU secretary general Yoshio Utsumi was due to announce the agreement to establish the trust to administer funds derived from the levy at a conference in Geneva last Friday.

Prospects for this kind of project appear good. According to the World Bank, world trade in goods and services amounted to $1.7 trillion in 1998, but so far only $36 billion of that was transacted on-line. Companies say the WTCs' physical presence and existing business on-line services could be a platform for expanding global electronic commerce services.

"There are strong analogies between what the WTCs have done in the physical world and what potentially they could do in e-business," said Richard Golding, partner and European leader for global risk management services at PricewaterhouseCoopers, one of the companies discussing possible involvement in the project. "The [GEC] is a potentially enormously significant project for e-commerce players."

Golding said PwC could provide trust and assurance services to multinationals across the GEC network. Trust and assurance services cover legal, insurance and risk management services as well as basic public key infrastructure and digital certification.

Golding said the GEC had the potential to provide interoperability between existing industry sector e-commerce projects.

Some national e-commerce service providers also have expressed interest in using the proposed global e-commerce network.

A spokesperson for PostCom, e-commerce services provider of Deutsche Post AG, Germany's national postal operator, said the company was interested in joining the GEC project, but that no decision had yet been made. National service providers such as PostCom could act as administrators for the WTCA branded digital certificates.

But there are signs that service providers in the e-commerce space - or currently eyeing it up - may lose out. For instance, the network potentially could challenge "market-site" partners of services integrator Commerce One Inc. These include regional operators such as BT in Europe, Singapore Telecom and Cable & Wireless Optus in Asia-Pacific - all of which host Commerce One's electronic procurement software on their local e-commerce infrastructure.

Michael Backhaus, a consultant at Commerce One SA in Zurich, said the WTCs could themselves provide market-site partners in other countries.:

And GTE Corp., one operator quick to build an e-commerce services division, is believed to have complained directly to the Geneva WTC's operating company ECCE about the GEC project.

Robert Bartlett, business manager for New-York Marsh Inc.'s In-Mind service, a knowledge-base service for corporate clients in the insurance broking sector, said companies such as Marsh were interested in using networks like the GEC because the international organization behind it would give access to a business community, which other e-commerce portals do not.

"Business opportunities are not easy to define anymore," said Bartlett.

"A system like [GEC] gives the opportunity to supply different information to different people."