WASHINGTON: The World Trade Organization's tariff moratorium on digital transmissions, a key pillar of internet development for decades, won a last-minute reprieve on Friday, but the deal leaves companies once again facing a 2026 deadline. It turns out.
Near the end of the WTO's 13th Ministerial Meeting, an agreement was reached in Abu Dhabi to extend the grace period until the next Ministerial Meeting in two years, but at that time there was a strict deadline that would require broader negotiations. ing.
“Some countries may see this as an opportunity and start working on a tariff system for implementation in 2026,” a person close to the talks told Reuters on condition of anonymity.
India, which was seeking concessions in the agricultural sector, had blocked an extension, but changed its mind at the request of host United Arab Emirates, and the only significant outcome of the conference was a two-year extension.
Digital tariffs were launched in 1998 to facilitate the growth of the nascent internet and have been updated regularly since then, so trades that know what digital tariffs will actually look like There are very few experts. Big companies like Google and Microsoft now generate hundreds of billions of dollars in revenue, and a growing number of countries want a share of that wealth, making tariffs a potential tool.
But such obligations “would be difficult for companies that rely on data and digital services — virtually all companies in this day and age,” said the Information Technology Industry Council, a trade group in Washington that regulates trade policy. said Naomi Wilson. .
“So this is more than a Big Tech problem or a developed world problem,” Wilson said. “This really undermines the entire digital economy.”
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So far, only Indonesia has introduced regulations that allow for the imposition of customs duties on digital goods (described as software, electronic data, and multimedia transmissions distributed via electronic transmission).
Currently, Indonesia's tariffs on such electricity transmissions are zero in accordance with the moratorium. However, Indonesia said in a WTO statement that low-income and developing countries lost $56 billion in customs revenue between 2017 and 2020 due to increased imports of films, video games, music and other digital distribution. Ta. Indonesia added that digital tariffs would help. Local software developers and content providers will be able to more easily compete with global technology giants.
U.S. industry groups also called for the ban on digital tariffs to be made permanent, ending constant threats by some countries to block renewals in an effort to win concessions elsewhere.
“We're relieved that the moratorium has managed to survive,” said Tiffany Smith, vice president for global trade policy at the National Trade Council, a group that represents large U.S. companies.
“Endless brinkmanship around the moratorium forecloses the ability to move forward on a broader agenda on important issues and undermines the viability of the WTO as a useful forum for trade ministers,” Smith added. Ta.
William Reinsch, a trade expert at the Strategy Center, said that if the moratorium is ultimately ended, the likely outcome is that around 140 people, representing most major economies, support the moratorium. He said the countries would agree to renew the moratorium as part of the WTO's Joint Statement Initiative. International research think tank in Washington.
“That will give the business community some peace of mind,” Reinsch added.
