trade policy brief
Understanding the scope, definition and impact of the WTO e-commerce Moratorium
October 2023
New OECD analysis demonstrates the case for renewal of the WTO e-commerce Moratorium at MC13. he WTO e-commerce Moratorium is up for renewal at the forthcoming WTO Ministerial T Conference (MC 13) in early 2024. WTO Members are currently discussing issues around its scope, definition and impact. he 102 countries that currently have provisions not to impose customs duties on electronic T transmissions in their trade agreements tend to do so independently from the multilateral discussions. They also tend to clarify that their commitments do not cover internal taxation and that they largely apply to content. he potential fiscal implications of the Moratorium are small, representing, on average, around T 0.1% of total government revenue or 0.68% of total customs revenue. Foregone customs revenue is also likely to be offset by rising GST/VAT revenue on digital services imports. ifting the moratorium would imply losses in competitiveness and increased trade cost that will L hit developing countries and smaller actors most, including SMEs and women owned firms.
The WTO Moratorium is up for renewal For more than two decades, the WTO Moratorium on applying customs duties on electronic transmissions (henceforth the “Moratorium”) has supported a stable, predictable and duty-free environment for digital trade to thrive. During its latest renewal, at the 12th Ministerial Conference in June 2022 (MC12), WTO Members agreed to intensify discussions on the Moratorium, including on its
scope, definition, and impact, underscoring the need for renewed evidence to inform this debate. At the upcoming WTO Ministerial Conference (MC13), to take place in February 2024, WTO Members will, once again, discuss whether or not to renew this Moratorium.
Insights from RTAs on the potential scope and definition of the Moratorium The scope and definition of the e-commerce Moratorium are among the most highly debated aspects in existing discussions. Some WTO Members question whether the Moratorium applies to the ‘content’ of the transmission (e.g., movies or downloaded e-books) or its ‘carrier-medium’ (i.e., the bits and bytes that carry the content). Some have also questioned whether the Moratorium affects the ability of countries to raise taxes beyond customs duties, or if the Moratorium erodes other commitments made in the WTO.
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Identifying how countries have approached customs duties on electronic transmissions in their trade agreements provides useful information about the possible contours of WTO Members’ understanding of the Moratorium. Of the current 105 regional trade agreements (RTAs) with an e-commerce chapter, 100 include a provision on the non-imposition of customs duties on electronic transmissions (NICDET provision for short). A number of key observations emerge from their analysis:
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