WTO provisionally agrees to extend e-commerce tariff moratorium

The prospect of ending the moratorium had raised major concerns among businesses. PHOTO: REUTERS

GENEVA (REUTERS) - World Trade Organisation (WTO) members reached a provisional deal on Thursday (June 16) to extend a moratorium on applying duties to electronic transmissions until the next ministerial meeting, likely to be in 2023, two trade sources involved in the discussions told Reuters.

The prospect of ending the moratorium, which has exempted data flows from cross-border tariffs since 1998, had raised major concerns among businesses.

Backed by major players like the United States, the United Kingdom and the European Union, they argued that letting it expire would undermine a global recovery already threatened by spiralling prices.

"We agree to maintain the current practice of not imposing customs duties on electronic transmissions until MC13 which should ordinarily be held by Dec 31, 2023," the agreement showed, referring to the next ministerial conference. It specified that the moratorium would expire in March 2024, should the next conference be postponed.

The provisional deal was reached in a negotiating room of the WTO's Geneva headquarters between a group of major members and still needs to be backed by the body's 164 members.

India, Indonesia, Sri Lanka, Pakistan and South Africa had threatened to block an extension earlier in the five-day ministerial conference, where negotiations aimed at clinching deals on food security, fishing and vaccines entered their final hours on Thursday after all-night talks, with some trade sources hopeful that efforts to circumvent Indian opposition would succeed.

Ministers from more than 100 countries are meeting at the global trade watchdog's headquarters in Geneva this week for the first time in more than four years to thrash out new trade rules - a feat many doubt in an era of high geopolitical tensions.

The body's 164 members must all agree for new global trade rules to be passed, meaning that one member can block deals.

In the June 12-15 meeting, prolonged until Thursday afternoon, that member has been India. New Delhi, which has a history of blocking multilateral negotiations, has stuck to long-held demands to maintain subsidies for fisheries and agriculture and pushed for extra carve-outs, trade sources say.

Indian Commerce Minister Piyush Goyal's statements confirmed those demands.

"India is strongly representing its perspective at the WTO to protect the future of every Indian and that of the marginalised," he said on Twitter.

However, some delegates were more upbeat on Thursday, including on a package of deals with trade-offs possible across the topics.

European Union trade commissioner Valdis Dombrovskis said they were "getting closer" in a tweet. WTO deputy director-general Anabel Gonzalez said she was "hopeful".

Negotiators including US Trade Representative Katherine Tai were involved in talks in the so-called "Green Room" of the WTO most of the night trying to thrash out agreements. But Ms Tai left early on Thursday, a US official confirmed.

Negotiations resumed around 7am GMT and are ongoing with the conclusion due Thursday afternoon, trade sources said.

One of the possible outcomes of the talks is a pared-back version of a deal designed to curb fishing subsidies that cause over-fishing, a document seen by Reuters showed. Another is a waiver of intellectual property rights for Covid-19 vaccines and pledges to ease the food security crisis although tussles over the wording continued, sources said.

WTO officials have maintained throughout the meetings that deals can be reached, saying that talks often look hopeless until a final bargain comes together.

Observers expressed frustration with the process.

"The ministerial (conference) laid bare the increasing dysfunction that inhibits collective action at the WTO," said Mr Jake Colvin, president of the National Foreign Trade Council, adding that members should not reward "obstructionism".

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