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TWN
Info Service on WTO and Trade Issues (Apr26/03) Geneva, 6 Apr (D. Ravi Kanth) — The United States, along with several other countries, on 2 April issued a “Joint Statement on the Moratorium on Customs Duties on Electronic Transmissions” committing to “provide each other as a temporary, plurilateral measure of support, the commitment that we had hoped to reach at MC14,” a seemingly divisive step to pressure the non-signatory countries, said people familiar with the development. With the e-commerce moratorium having expired at the end of March, restoring it appears to involve “a war of nerves” and could result in trade-offs and a balance in deciding on its duration, said people familiar with the development. The joint statement (WT/GC/283) was issued by the following countries: Argentina; Australia; Costa Rica; Ecuador; Guatemala; Iceland; Israel; Japan; Korea; Malaysia; Mexico; New Zealand; North Macedonia; Norway; Panama; Paraguay; Peru; Singapore; Switzerland; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; United Kingdom; United States and Uruguay. The 23 co-sponsors of the joint statement expressed “disappointment in the failure to extend the e-commerce moratorium at the 14th Ministerial Conference (MC14) in Yaounde, Cameroon.” They said, “our efforts in Yaounde produced a compromise solution that can be seen in the Facilitator’s draft text (WT/MIN(26)/35) that would have extended the e-commerce moratorium to an unprecedented length and provided greater predictability and certainty for businesses and consumers in the digital economy.” To recall, the US called for a permanent moratorium, placing the issue as the central piece of the negotiations at MC14 while nearly scuttling any outcome in other areas. Later, during the four days of the negotiations, the US saw the proverbial writing on the wall against the permanent moratorium, which was opposed by a large number of countries. Subsequently, the US demanded a two-digit number for the duration of the moratorium and, when it found out that this was not acceptable, it insisted on a four-year duration in the final hours of negotiations with Brazil and Turkiye, as reported in the SUNS. A draft text of the Jamaican Minister-Facilitator overseeing this issue, which has been annexed to the MC14 chair’s summary (WT/MIN (26)/35), states: “We agree to maintain the current practice of not imposing customs duties on electronic transmissions until 31 December 2030. Unless Members agree to extend the moratorium and the Work Programme on Electronic Commerce in the 16th Ministerial Conference, or in case the 16th Ministerial Conference is delayed beyond 31 December 2030, the moratorium and the Work Programme should expire on 31 December 2030.” Several members told SUNS that the Minister-Facilitator’s draft text reflected only one side, and did not even mention the two countries (Brazil and Turkiye) that demanded that the current practice be extended for only two years as has been the case since 1998. “The Minister-Facilitator on electronic commerce seemed biased and only carried the US demand,” said an Asian trade envoy, who asked not to be quoted. The Minister-Facilitator justified the four-year duration, stating that ” … Members agree to conduct a focused review of this decision and intensified discussions to seek a common understanding on the scope, definition, and impact of this decision. We agree to deepen dialogue by reviewing existing empirical evidence and gathering additional empirical evidence on the impact of this moratorium on the economies of developing and least developed Members, and seek a common understanding on the scope and definition.” Clearly, if members could not resolve their differences over the definition of electronic transmissions, it is unlikely that they would reach a consensus on the very definition, more so when it was agreed that the e-com moratorium will be terminated at MC14, said another envoy who asked not to be quoted. However, in their joint statement, the US-led co-sponsors said that the proposed duration of four years for the moratorium until 31 December 2030, “while not perfect, this landing zone worked for nearly all WTO Members.” The positions adopted by the US at MC14 seemed more like a “my-way-or-the-highway” stand, the trade envoy said. It is somewhat intriguing that the US did not join another seemingly illegal plurilateral deal on e-commerce, namely the “Declaration on Interim Arrangements for the Agreement on Electronic Commerce,” in which most of the above co-sponsors were a party, including China and the European Union among others, said trade envoys, who asked not to be quoted. The WTO Director-General, Ms Ngozi Okonjo-Iweala, appears to have played a pivotal role in asking the parties to the interim arrangement to submit their notifications, knowing full well that such a call would be tantamount to sowing the seeds of disaffection with the rules, said trade envoys who asked not to be quoted. The DG’s call is in line with Article 29.1 of the interim arrangement reached among 66 countries, which states, “any Member of the WTO may accept this Agreement. Acceptance shall take place by deposit of an instrument of acceptance to this Agreement with the Director-General of the WTO.” Further, as per Article 29.2, “this Agreement shall enter into force, for those Members of the WTO that have accepted it, on the 30th day following the date of deposit of the 45th instrument of acceptance. Thereafter, this Agreement shall enter into force for any other Member of the WTO on the 30th day following the date of deposit of that Member’s instrument of acceptance.” Clearly, the DG seems to be campaigning for arrangements that are allegedly inconsistent with the core provisions of Articles IX and X of the Marrakesh Agreement, said trade envoys, who asked not to be quoted. The interim arrangement pressed for a permanent moratorium, something for which the US had expended its negotiating capital at MC14, the trade envoys said. “In light of the current situation,” the co-sponsors said in their joint statement, “we commit to take immediate steps to provide the predictability and certainty that businesses and consumers rely upon to promote digital trade. This responds to the call from the diverse group of over 100 global business group representatives who supported our goal of establishing a permanent moratorium against the imposition of customs duties on electronic transmissions.” Plurilateral measure More importantly, the joint statement argues that “members of this Joint Statement commit to provide to each other as a temporary, plurilateral measure of support, the commitment that we had hoped to reach at MC14.” The co-sponsors further clarified that they “agree to maintain the current practice of not imposing customs duties on electronic transmissions among ourselves. For the purposes of this communication, “electronic transmission” means a transmission made using any electromagnetic means and includes the content of the transmission.” They stated that their “commitment will remain in place until the next General Council meeting,” which is expected to be held sometime in the month of May. According to a digital trade expert who preferred not to be quoted, “this is an opportune moment for developing countries to start preparing for a new HS Chapter for customs duties on e-transmissions in line with what Indonesia has done. While these 66 countries are bound by the commitment of not applying customs duties, the others are not.” “Regulating and monitoring the inflow of electronic transmissions is an absolute necessity today for national security in times of spreading conflicts and wars,” the expert added. +
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