Written by Olivia Le Poidevin
YAOUNDE (Reuters) – World Trade Organization talks on extending a moratorium set to expire this month on tariffs on electronic transmissions such as digital downloads have reached an impasse, diplomats said on Sunday, although a broader reform plan is close to reaching an agreement.
Talks at the World Trade Organization meeting in Cameroon include efforts to bridge differences between the United States and India over extending the e-commerce moratorium, which was first adopted in 1998 to help encourage early digital trade growth.
In what is seen as a test of the WTO’s relevance, after a year of trade turmoil fueled by tariffs and major unrest over the Iran war, three diplomats told Reuters that ministers were stuck on extending the moratorium for more than two years after objections from Brazil.
Two diplomats said that the ministers are discussing a new draft document to extend the negotiations for four years, in addition to an additional reserve year until 2031.
Dead end for e-commerce
In addition to Brazil’s objections, India and the United States were far apart in their positions on stopping e-commerce, with India indicating it would accept a two-year extension, while US Trade Representative Jamieson Greer said this week that Washington wanted a permanent extension, diplomats said.
A draft document seen by Reuters proposed support for developing member states concerned about the loss of tax revenues, as well as a provision for review.
Business leaders say the extension is vital to ensure predictability, fearing the possibility of tariffs being imposed. It is also seen as key to securing US support for the World Trade Organization.
“If the moratorium is not extended, the United States will use it as an excuse to upend the World Trade Organization,” a senior diplomat said.
The draft reform plan takes it
After initial resistance from some WTO members, a new draft of the reform roadmap, seen by Reuters, which provides a timeline for progress and identifies key issues to be addressed, is close to being agreed, three diplomats said.
These reforms include improving decision-making in a consensus-based system, which has long been hampered by a few countries, and extending trade benefits to developing countries.
The debate on reform comes amid efforts to rewrite World Trade Organization rules to make the use of subsidies more transparent and make decision-making easier. The United States and the European Union say China in particular has benefited from existing rules at their expense.
Also, the introduction of the agreement reached by a sub-group of members aimed at promoting investment in developing countries into WTO rules remains blocked by India.
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