WTO / Digital Trade Impasse Persists

Countries seeking the continuation of the World Trade Organization's (WTO) existing moratorium on imposing customs duties on electronic transmissions have not provided sufficient evidence of its benefits for global trade and price reduction, according to sources familiar with ongoing discussions.

Opponents of the moratorium, including India, South Africa, Pakistan, Indonesia, and Bangladesh, representing the least-developed countries group, believe they have provided concrete evidence debunking the proponents' arguments.

During an informal meeting on the e-commerce moratorium, both proponents and opponents remained sharply divided. The current practice of not imposing customs duties on electronic transmissions will be maintained until the 13th Ministerial Conference (MC13), scheduled for December 31, 2023. If MC13 is delayed beyond March 31, 2024, the moratorium will expire unless a decision to extend is made by ministers or the General Council.

Indonesia has been advocating for a reconsideration of the scope and definition of electronic transmissions since the WTO's 11th Ministerial Meeting in Buenos Aires in 2017. It presented a detailed study outlining the realities of goods traded via electronic transmissions and the distinction between electronic transmissions and goods imported through electronic transmissions. Indonesia called for a "holistic" approach to analyzing the moratorium and maintaining a degree of policy space to allow necessary adjustments since customs duties are a manifestation of a state's fiscal rights.

However, proponents of the moratorium, such as the United States and European Union, argued that the moratorium proved beneficial during the COVID-19 pandemic, providing predictability and certainty in digital trade. Japan and other Joint Statement Initiative (JSI) members supported a permanent moratorium. Ambassador Usha Cannabady of Mauritius, the facilitator, said she would present a consolidated report of the proceedings by the end of the week.