US seeks permanent WTO ban on e-commerce tariffs

The US is pushing to make permanent an international ban on tariffs on e-commerce, setting the stage for a debate on America’s global dominance of digital services and data flows at the World Trade Organization's (WTO's) ministerial later this month.

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At MC14 in Cameroon, WTO members will discuss the future of e-commerce tariff rules and digital trade.

(REUTERS)

The WTO’s “moratorium on customs duties on electronic transmissions” has been renewed every two years since it was first instituted in 1998, back in the infancy of digital commerce. The prohibition’s wording was vague by design back then but it's understood to mean economic activity that’s now ubiquitous—from online purchases and social media to data transfers and video calls.

The moratorium has divided nations for nearly three decades as economies including Brazil, India and South Africa argued they wanted to preserve domestic policy options rather than rubber-stamp it. Behind that vague justification are concerns including the hit to customs revenue as online services replace goods purchases, US Big Tech’s growing market share, and data sovereignty and security issues more recently tied to the boom of artificial intelligence.

A draft WTO statement of support for the moratorium circulated in late February included the US, Singapore, Argentina, Japan, South Korea, Mexico and 13 others. The Trump administration wants it to be permanent, making it the most consequential issue facing the Geneva-based organization at its 14th biennial ministerial conference 26-29 March in Cameroon, known as MC14.