The 13th Ministerial Conference of the World Trade Organization (MC13 WTO), held in Abu Dhabi, recently concluded with a mixed bag of outcomes, with the highlight being the decision to prolong the moratorium on e-commerce tariffs for an additional two years until 2026.
Though the conference (February 26-29) could not reach a consensus on significant issues such as agricultural and fisheries subsidies, it demonstrated a collective willingness to bridge divides.
What is e-commerce moratorium?
The e-commerce moratorium provides worldwide businesses, companies in developing nations, especially small enterprises, and consumers with access to a broad spectrum of innovative and cost-effective electronic services.
This enables them to tap into new markets or audiences and engage in international value chains or discussions.
The essential nature of the internet relies on the free flow of data across borders. However, with the burgeoning e-commerce, many governments were looking to impose customs duties and control data moving across borders.
While this was being considered by various governments on the basis that they are protecting their own data, these actions are difficult to monitor and quantify across international boundaries.
Since 1998, WTO members have been debating whether to apply customs duties to e-commerce and electronic transactions and decided to establish a “WTO e-commerce moratorium” which was set to expire in 2024.
Approximately a quarter of worldwide trade is currently conducted through digital channels, and this proportion is expected to increase at a rate surpassing that of conventional goods trade in the coming ten years.
The ongoing debate at the WTO revolves around how to effectively manage and tax the burgeoning digital economy without stifling its growth.
After lengthy discussions which extended 16 hours into the early hours of the final day, WTO members reached an agreement to extend the “e-commerce moratorium” until MC14 in 2026.
This means that trade in online services such as apps, games, and software, along with digital content like music, videos, and other files, remains free from duties for at least till 2026. – TradeArabia News Service
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