WTO’s e-Commerce moratorium

At the 12th Ministerial Meeting (MC12), World Trade Organization (WTO) members reached a provisional deal on several issues, e-Commerce being one of them.

Background –

• When e-commerce was still at a nascent stage, in September 1998, the work programme on e-commerce was adopted by the General Council of the WTO.
• Under the work programme, WTO members agreed to continue not imposing customs duties on electronic transmissions.
• This moratorium on customs duties has been renewed regularly at each Ministerial Conference.
• With the growth of e-commerce, there is a fear that developing countries, including India, are importers and thereby are losing out on Customs duty.
• India wants customs duties applied to e-commerce.
• It has said that the moratorium, which has been in effect since 1998, has adversely impacted developing countries in terms of lost revenues.

What is the outcome?

• Extended a moratorium on applying duties to electronic transmissions —
  • • The meeting had reached an agreement to extend a moratorium on applying duties to electronic transmissions until the next ministerial meeting.
    • Extension of moratorium was 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.
    • The agreement specified that the moratorium would expire in March 2024, should the next conference be postponed.
• On the World Food Programme —
  • • Meeting decided not to impose export prohibitions or restrictions on foodstuffs purchased for non-commercial humanitarian purposes by the World Food Programme.
    • However, internal food security concerns will take precedence.
    • In other words, this agreement will not prevent the adoption by any Member of measures to ensure its domestic food security in accordance with the relevant provisions of the WTO agreements.
    • Also, there is no work programme on agriculture. This could be considered as a good outcome for India as our agri-subsidy will not face any further scrutiny.

Stance of India –

• Earlier, India, Indonesia, Sri Lanka, Pakistan and South Africa had threatened to block an extension to the moratorium.
• However, these countries later changed their stand and supported the current agreement.