Info Service on WTO and Trade Issues (Nov09/05)
Members intensify talks on Work Programme on E-Commerce
Geneva, 28 Oct (Riaz K. Tayob) -- Members of the World Trade Organization (WTO) have intensified their discussions in informal and formal meetings during the past week on the Work Programme on Electronic Commerce, and are also considering the future of the moratorium on the practice of not imposing customs duties on electronic transmissions.
discussions centred on the proposed language on E-commerce for inclusion
in the outcome document of the seventh WTO Ministerial Conference, scheduled
to take place in
According to the Hong Kong Ministerial Declaration of 2005, the moratorium on customs duties on electronic transmissions applies only until the next Ministerial Conference. Though the WTO agreement mandates a Ministerial Conference at least once in two years, no Ministerial Conference has been held since the one that took place in Hong Kong-China in 2005.
Work Programme on E-commerce was adopted by the General Council on 25
September 1998 and is referred to in both the
The General Council was called upon to establish a comprehensive work programme to examine all trade-related issues relating to global electronic commerce, taking into account the economic, financial, and development needs of developing countries, and to report on the progress of the work programme, with any recommendations for action, to the then Third Session (in Seattle in 1999).
The mandate is that the General Council shall play a central role in the whole process, keep the work programme under continuous review through a standing item on its agenda, and additionally shall take up consideration of any trade-related issue of a cross-cutting nature. All aspects of the work programme concerning the imposition of customs duties on electronic transmission shall be examined in the General Council.
For the purposes of the work programme, "electronic commerce" means "the production, distribution, marketing, sale or delivery of goods and services by electronic means." The work programme will also include consideration of issues relating to the development of the infrastructure for electronic commerce.
the Doha Ministerial Conference in 2001, Ministers agreed to continue
the work programme, as well as to extend the moratorium on customs duties
and instructed the General Council, in paragraph 34 of the Doha Declaration,
to report on further progress to the Fifth Ministerial in
(According to a 26 October 2009 Secretariat Briefing Note, there have been five discussions held under the General Council's auspices dedicated to electronic commerce.)
Paragraph 46 of the Hong Kong Ministerial Declaration took note of the reports on the Work Programme on Electronic Commerce, and stated that the examination of issues was not yet complete. Members agreed to reinvigorate that work, including the development-related issues under the Work Programme and discussions on the trade treatment, inter alia, of electronically delivered software. Institutional arrangements were maintained, and the moratorium was also maintained until the next Ministerial Conference session.
[In a United Nations ICT Task Force study (Wunsch-Vincent, S. -2004 "WTO, E-commerce and Information Technologies, From Uruguay Round through the Doha Development Agenda - Report for the UN ICT Task Force" -- www. unicttaskforce. org/perl/documents. pl? id=1536 ), the difficult issue of classification of digital products as goods or services and problems with the scope of the moratorium is discussed.
[On the goods and services classification, it states that "most WTO Members agree that the majority of services that are delivered electronically (e. g., financial or professional services) are services and governed by the GATS. But Members do not agree on whether digital products that have traditionally been traded on a physical carrier medium are goods but are now traded electronically, governed by GATT, services governed by GATS, or some unique category deserving its own set of trade rules.
[The reason, it states, is that neither the GATT classification system (Harmonized System) nor GATS classification system (Services Sectoral Classification List, W/120) offer an unambiguous way to classify digital products. Using the example of computer software, it states that under the GATT system, because software has no physical attributes, there is no classification for it under the Harmonised System.
["Only certain carrier media on which software is recorded (e. g., laser discs or magnetic tapes) are listed. The classification of computer software under the GATS is not any easier as the sub-sector classification for computer services refers only to the "consultancy" services related to "development and implementation" of software - not to the software itself.
[The study further states that the classification of digital products will determine the level of trade liberalization that exporters of these products can expect from WTO Members and whether Members can maintain cultural protections in the face of ubiquitous electronic distribution of movies, music, and literature. Physical carrier media classified as goods can be subject to border measures, but these are limited by an established set of obligations and agreements governing tariff bindings, national treatment, quotas, subsidies, safeguards as well as the Customs Valuation Decision. Under the GATT, the range of discriminatory trade treatment that a WTO Member may engage in is limited.
[The study says that in contrast, under the GATS, digital products are guaranteed national treatment or market access only pursuant to a GATS commitment and these commitments may include significant limitations. A GATS classification would permit Members to extend discriminatory limitations and cultural support measures to audiovisual services that are delivered electronically.
[On the moratorium, the Task-force study states that there is no clear understanding of what "electronic transmission" means. One meaning is that duties cannot be imposed on the electronic transmissions (the transport service) that support E-commerce. Another is that the moratorium prohibits duties on the content of the transmission, namely digital products and electronically delivered services (e. g., legal services). And another is that products that are duty-free in the offline world remain so in the online world.
[Even the WTO's Special Study No. 2 "Electronic Commerce and the Role of the WTO" highlights the difficulties of definitions in the E-commerce work programme, for instance, "whether services transactions over the Internet could be considered trade in goods, trade in services, or a different kind of trade."]
At a 27 October meeting at the WTO as well as informal meetings held earlier, under the auspices of the General Council as mandated in the Work Programme, a number of inputs were provided by various countries regarding the moratorium and the future of the work programme on E-commerce. The meetings were chaired by Mr Harsha Singh of the Secretariat.
to trade diplomats, during the informal consultations held earlier in
to trade diplomats, prior to the 27 October meeting, and during the
There are similarities and differences between the Indian and Cuban proposals.
The proposals of India and Cuba both include a recognition that the E-commerce Work Programme is not yet complete; agree to reinvigorate work, including development issues, after the seventh Ministerial Conference; that current institutional arrangements be maintained (i. e. the work is conducted under the auspices of the General Council, and mandates work to subsidiary bodies, namely the Council for Trade in Goods, Council for Trade in Services, Council for TRIPS and Committee on Trade and Development); the Work Programme include development issues; and, that the General Council Chairman submit a written report including recommendations that meet the "concerns" (in Cuba's proposal) or issues (India's proposal) raised by Members.
to SUNS after the meeting,
proposal, aside from the different deadline for the moratorium, seeks
completion of the E-commerce Work Programme by the July 2010 General
Council, which it amended to December 2010 at the 27 October meeting.
to SUNS after the informal meetings (before 27 October),
Cuban tourism industry has not escaped the adverse effects of the embargo,
it added. One example of the problems it faces, is that its tourism
companies cannot advertise on the main web pages of companies like Yahoo!
and Google, as the
Cuban delegate told SUNS that the defenders of the moratorium regarded
it as beneficial for developing countries and development in particular.
the 27 October meeting,
According to trade diplomats, at that meeting, Cuba submitted a revised proposal which included, "to hold a midterm review with an interim report of the state of play of the programme and to complete it by the session of the General Council on December 2010, with the submission of a written report by the Chairman of the General Council including recommendations on the concerns raised by members." It also proposed that the extension of the moratorium be until the General Council of December 2010.
to trade diplomats,
Trade diplomats said that another meeting is expected to be held on Friday for further discussions. +