US and Allies Propose WTO E-Commerce Duties Moratorium as Deadlock Persists
WTO E-Commerce Duties Moratorium: Ongoing Negotiations and Implications
By Olivia Le Poidevin and David Lawder
GENEVA/WASHINGTON, May 5 (Reuters) - The U.S. and a group of countries are planning to press ahead with their own moratorium on e-commerce duties if Brazil and Turkey continue to oppose an extension of a global deal at World Trade Organization talks on Wednesday, a draft document shows.
Failure at a high-level WTO meeting in Yaounde, Cameroon, in March to renew the long-standing moratorium on duties for cross-border streaming and downloads marked another setback for the WTO's role in setting global trade rules.
Background of the E-Commerce Duties Moratorium
The moratorium, agreed in 1998 and regularly renewed since, bars duties on cross-border electronic transmissions such as streaming music or films and downloading software.
It is a priority for WTO members with large digital economies - including the U.S., the European Union, Canada and Japan - which argue it provides predictability for global digital trade and want it made permanent.
Deadlock at the WTO: Current Status
Stalemate Between Key Members
DEADLOCK
Prospects for breaking the deadlock between the U.S., Brazil and Turkey appear slim ahead of the WTO General Council meeting in Geneva on Wednesday, five diplomats said.
A draft text, dated May 1 and seen by Reuters, shows that the U.S. and a subset of members are proposing an alternative plan under which they would agree among themselves not to impose duties on electronic transmissions for an unspecified period. The text was proposed by the U.S., diplomats said.
"Beginning on May 8, 2026, we, the co-sponsors of this communication, will continue to not impose customs duties on electronic transmissions among ourselves," the draft states.
If there is no shift at the General Council, Washington plans to push ahead with this plurilateral agreement, with support so far from countries including South Korea, Japan, Australia and New Zealand, a senior diplomat said.
It was not immediately clear how many members would co-sponsor the text.
Flashpoints and Diplomatic Efforts
The moratorium became a flashpoint in Yaounde amid a broader dispute between the U.S. and Brazil after members failed to agree on a four-year extension.
Diplomatic efforts since then have yielded little progress, despite indirect contacts between Washington and Brasilia, two diplomats said. The permanent missions of Brazil and Turkey did not immediately respond to requests for comment.
Implications for the WTO and Global Trade
WTO Credibility at Stake
WTO CREDIBILITY AT STAKE
The draft builds on a declaration made in April by 23 countries pledging not to introduce duties and says the aim remains a multilateral deal, while expressing "disappointment" over the lapse.
Statements from Key Stakeholders
U.S. ambassador to the WTO in Geneva, Joseph Barloon, said the inability to secure a long-term extension because of opposition from "two members" - an apparent reference to Brazil and Turkey - underscored the WTO's struggle to address modern trade challenges.
"The U.S. has secured commitments from dozens of countries - and nearly all its major trading partners - not to impose tariffs on electronic transmissions and it will continue to support efforts to obtain a plurilateral moratorium on e-commerce duties," he said.
Potential Impact on Businesses and Trade Rules
While diplomats said immediate imposition of duties was unlikely, Andrew Wilson, deputy secretary-general for policy at the International Chamber of Commerce, warned that failure to restore the multilateral moratorium would damage the WTO's credibility.
"It sends a clear signal that WTO rules are slowly eroding away," Wilson said, adding that a plurilateral outcome would be "sub-optimal," because it would not apply universally and could add uncertainty for businesses.
(Reporting by Olivia Le Poidevin. Editing by Mark Potter)
