The World Trade Organization (WTO) has maintained a moratorium on customs duties for electronic transmissions of digital products and services since 1998. But now, despite a strong consensus among economists and trade policy experts that countries benefit greatly from duty-free e-commerce, some of them, particularly India, Indonesia and South Africa have begun to push for an end to the moratorium.The initiative would be a terrible mistake, according to one new report of the Information Technology and Innovation Foundation (ITIF) and the Global Trade and Innovation Policy Alliance (GTIPA), a global network of independent think tanks supporting trade liberalization and integration.
The next renewal of The moratorium was due to be considered at the WTO's 2020 biennial Ministerial Conference, but was put on hold due to the pandemic; The new report compiles evidence from a dozen countries and regions around the world on the benefits of tariff-free digital trade, which have become more pronounced during the COVID-19 pandemic. According to the report, Online commercial activity must remain tax-free to boost national and transnational growth, foster global integration, drive innovation and reduce the digital divide.l.
“The moratorium on e-commerce obligations should be extended, because imposing barriers to electronic transactions would have serious repercussions for the global economy,” says Stephen Ezell, ITIF’s Vice President for Global Innovation Policy. Countries affected by digital taxes could retaliate in ways that would undermine digital and e-commerce. By adding economic burdens to the flow of information and digital goods and services, governments would only increase the costs for their own industries to access a wide range of technologies and data sources critical to growth and innovation, business operations, and technology transfer.
The report prepared by ITIF and GTIPA analyses the benefits of digital free trade for Argentina, Colombia, Germany, Ghana, Greece, Italy, Jordan, Mexico, Poland, South Africa and the United StatesThe document concludes that ensuring that e-commerce and global digital trade remain tariff-free is a necessity, but it is only part of a broader strategy that countries need to build a growing digital economy. Other aspects include the creation of a robust digital payments system, cybersecurity protections, intellectual property protection, data privacy, digital literacy and skills, ICT infrastructure, among other elements.
Maintaining the WTO moratorium on digital rights fosters certainty and predictability, both for domestic digital economic activity and for global production networks and supply chains.“It is not clear whether it is technically feasible to administer a fair, predictable and efficient system for identifying and collecting digital duties,” said Nigel Cory, ITIF’s Associate Director for Trade Policy. Regardless, any effort to collect customs duties on every digital transaction would hamper the seamless global flow of information and data through software, digital content and any other internet-based processes, which would inevitably impact economic output as well as global productivity and innovation levels.
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.
