The possible end of a ban on digital product tariffs could hit small and medium sized businesses hardest and set back the trade in digital goods, says a leading international trade figure.
Currently, countries are banned from imposing duties on electronic products sold abroad under the E-Commerce Moratorium.
Last month, at the 13th Ministerial Conference (MC13) in Geneva, the WTO agreed to extend the mortarium by the “skin of its teeth”.
Marco Forgione, director general of the Institute of Export & International Trade (IOE&IT), warned that failure to extend the moratorium would be a “step backwards”.
End to moratorium?
Late last week (27 March), WTO director general Ngozi Okonjo-Iweala told the FT that she was expecting the moratorium to end in 2026.
She said that some governments, notably India, South Africa and Indonesia would refuse to extend the exemption, which had been in place for thirty years.
“I don’t think the membership is prepared to continue arguing over this every couple of years. So they’ve agreed on this date.
“It sends a signal to business on what they need to do. Two years is a very reasonable timeframe.”
Bad for business
In response, IOE&IT’s Forgione said that the decision would have a negative effect on traders, particularly SME businesses:
“It was clear from my conversations at MC13 last month that the E-Commerce Moratorium was in the last chance saloon. The announcement by director general Okonjo-Iweala confirms that a multi-lateral agreement is now very unlikely to be found.
"This would be a step backwards for the progress of digital trade and lead to significant impacts on small and medium-sized businesses engaging in ecommerce in those countries which choose to impose tariffs."
Okonjo-Iweala noted that nothing stopped individual members from exempting e-commerce products from tariffs.
Voluntary extension
Over 80 countries are currently negotiating a ‘voluntary’ version of the moratorium. These countries include the majority of North and South America, Europe and most Asian nations.
Forgione said that he was “heartened that most members of the WTO are looking to negotiate a voluntary e-commerce moratorium.
“We look forward to scrutinising the detail of this voluntary mechanism on behalf of our members.”
Second act for Okonjo-Iweala
The possible end of the thirty-year moratorium would coincide with the end of Okonjo-Iweala’s first term as head of the WTO.
Before MC13, she declined to say whether or not she was considering a second term in office, telling Politico she still had “so much to deliver in the short term. This thought hasn’t even crossed my mind.”
The former Nigerian finance minister was first selected for the role in 2021, and was both the first African and first female to serve as director general. Her four-year mandate expires 31 August 2025.
