In a potential boost to global digital trade members of the World Trade Organization (WTO) have tentatively agreed to extend a moratorium on tariffs on electronic commerce for another two years, according to a draft document released last week. However, the decision still requires formal approval from all 164 member states.
As per the document: "We agree to maintain the current practice of not imposing customs duties on electronic transmissions until the 14th Session of the Ministerial Conference. The moratorium and the Work Programme will expire on that date." Ministerial conferences are held by the WTO every two years, with the next one scheduled for 2026. This temporary extension would allow further discussions on the future of e-commerce within the organization.
Boost to free flow of goods
This move comes as a relief to businesses and consumers who rely on the free flow of goods and services across borders. The moratorium, originally established in 1998, has been periodically extended since then, fostering the growth of e-commerce and the digital economy.
Proponents of the moratorium argue that it has fostered the growth of the global digital economy by reducing barriers to trade and encouraging innovation. They also emphasize its potential to support economic recovery efforts in the wake of the COVID-19 pandemic.
While the draft document signifies a positive step towards continued duty-free online trade, it is crucial to note that formal approval from all 164 WTO members is still necessary.
However, the decision to extend the moratorium is not without its critics. Some countries argue that it prevents them from raising revenue to support domestic industries. Others call for further negotiations to clarify the scope and application of the moratorium.
Overall, the potential extension of the moratorium has been met with optimism by industry leaders and advocates who view it as essential for fostering the continued growth of the global digital economy. They believe it would prevent potential disruptions and increased costs for businesses and consumers alike.
