The global technology industry is pressing the World Trade Organization to exempt data flows from cross-border tariffs, saying a failure to do so would undermine a global recovery already threatened by spiralling prices.
The WTO’s 164 members presented their views on the topic on Wednesday, [June 15] the final scheduled day of a four-day ministerial conference.
Keisal Peters, [minister of state in the Ministry of Foreign Trade] of St Vincent and the Grenadines, who is leading discussions, said at the conference that divergences remained. As time ran out, WTO members should consider meeting halfway, she added.
The WTO agreed in 1998 to a moratorium on e-commerce tariffs and repeatedly extended it at ministerial conferences, which the Geneva-based trade body normally holds every two years.
Now India, Indonesia, Sri Lanka, Pakistan and South Africa were threatening to block an extension, trade sources close to talks at the WTO said. This raises the prospect that tariffs could be imposed on such data flows as music streaming and financial transactions.
That possibility has prompted 108 tech company associations, including groups from India and Indonesia, to write to the WTO urging members to renew the moratorium, saying failure to do so would be a historic setback for the WTO and would undermine the global recovery.
Small developing countries, they say, would lose the chance to increase their digital competitiveness without a moratorium.
John Neuffer, chief executive of the U.S.-based Semiconductor Industry Association, said tariff-free data flows were essential for countries wishing to attract foreign [trade]. They also offered clear benefits to consumers and small businesses, he said.
“We heard alarm bells that things were in trouble, with much more risk of the moratorium not being extended.”
Studies demonstrated that tariff revenue benefits would be outweighed by economic losses, he said.
An EU official said countries favouring a moratorium extension were still hoping for a multilateral deal. They were not yet at the point of seeking a plan B – forming a smaller alliance in which they would not impose tariffs on data flows between them (Reuters).
