World Trade Organization (WTO) members have agreed to extend the existing moratorium related to customs duties on electronic transmissions, a decision welcomed by the International Chamber of Commerce (ICC).
The WTO members, meeting as General Council, decided on December 10 to maintain the current practice of not imposing customs duties on electronic transmissions until the 12th Ministerial Conference in Nur-Sultan, Kazakhstan, scheduled for June 8-11, 2020.
The ICC lauded the WTO decision to renew the longstanding global prohibition on applying customs duties to cross-border data flows.
Known as the “WTO e-commerce moratorium,” the agreement has been periodically renewed since 1998 by WTO members at each ministerial conference.
The moratorium has played an important role in the development of the Internet by keeping tariffs off digitally delivered products, services and content, ICC said in a statement released also on December 10.
In recent months ICC has warned that a failure to renew this deal would not only add to a damaging pattern of escalating tariffs, but could also wreak potential havoc in the online economy.
“We welcome the pragmatic approach taken by member states to renew the moratorium through to the WTO’s next ministerial conference in June 2020. The potential for tariffs to break the global Internet as we know it today is real,” ICC secretary general John W.H. Denton AO said.
“The concept of applying bureaucratic customs checks and duties to the millions of bits of data crossing national borders every minute just doesn’t fit with how the digital economy functions in the real world.”
Denton also called for making the e-commerce moratorium permanent.
“Today’s decision clearly shows the continued value of the WTO as a forum for multilateral trade policy making. Understandable questions about the taxation of digital products and services cannot—and should not—be resolved by introducing a new frontier for tariff wars. The importance of retaining a global consensus on this agenda cannot be overstated,” he continued.
“We stand ready to work with WTO members to advance discussions on why it makes plain sense—for business, consumers and governments—to make the moratorium permanent in the months ahead.”
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