New Delhi, March 30 – The 14th Ministerial Conference (MC14) of the World Trade Organization (WTO), which concluded on Monday in Yaounde, Cameroon, failed to reach an agreement on extending the moratorium on customs duties on electronic commerce, including digital downloads and streaming.
In May 1998, WTO members agreed for the first time not to impose customs duties on electronic transmissions for two years, a moratorium that has been extended biennially since then. Lifting this moratorium would allow countries to impose tariffs on e-commerce.
Negotiations on the duty ban reached a deadlock between Brazil and the US. While some member countries opposed extending the moratorium or favored a two-year period, the US was pushing for a five-year duration.
The existing moratoriums related to electronic transmissions and non-violation complaints are scheduled to expire on March 31.
The 14th Ministerial Conference (MC14) of the WTO began on March 26 in Cameroon's capital city. Although the talks were scheduled to end on March 29, they were extended slightly and concluded on March 30.
Cameroon's Minister of Trade, Luc Magloire Mbarga Atangana, who chaired MC14, said that trade ministers worked to resolve as many issues as possible during the four-day meeting.
However, he said, "We ran out of time" regarding several outstanding issues, including the WTO's work program on electronic commerce and the continuation of the existing moratoriums on customs duties for electronic transmissions and non-violation complaints under the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS).
It was agreed to continue discussions on these issues in Geneva, the WTO headquarters.
Director-General Ngozi Okonjo-Iweala welcomed the progress in discussions on a work program for advancing ongoing talks on WTO reform, the decision on advancing work on further disciplines on harmful fisheries subsidies, and other issues.
She suggested that members use the draft texts developed during the four days of ministerial discussions to finalize agreements on outstanding issues in Geneva at the next General Council meeting.
The WTO said in a statement that ministers agreed to continue engaging in negotiations on fisheries subsidies, aiming to make recommendations to the 15th Ministerial Conference.
The Ministerial Conference, held every two years, is the highest decision-making body of the WTO. Nearly 2,000 trade officials, including more than 90 ministers, attended MC14. It was the second time the MC was held in Africa. The MC10 was held in Nairobi in 2015.
E-COMMERCE MORATORIUM:
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WTO's work program defines e-commerce as the production, distribution, marketing, sale, or delivery of goods and services by electronic means.
Products that were traditionally traded physically are now increasingly traded digitally, with streaming services progressively taking the place of CDs or DVDs, and with e-books witnessing growing demand.
Customs duties are usually applied by WTO members on imported goods, but since 1998, they have agreed not to impose tariffs on electronic transmissions.
WTO members have agreed not to impose customs duties on electronic transmissions such as digital downloads and streaming since 1998.
However, developing nations have opposed the extension on multiple occasions, as they are witnessing a rise in the imports of electronic transmissions, mainly items like movies, music, video games, and printed matter, some of which could fall under the moratorium.
Think tank GTRI said that the US, supported by the EU and Japan, pushed for a long-term or permanent extension, while India and other developing countries opposed this, arguing it would lock in revenue losses and limit policy space in a rapidly growing digital economy.
"Without an agreement, the moratorium lapsed for the first time in 26 years, opening the door for countries to impose tariffs on digital transmissions," GTRI Founder Ajay Shrivastava said, adding that most gains from waiving such duties accrue to top US tech firms, including Google and Meta.
The extension also carries revenue implications, with estimates suggesting potential tariff revenue losses of about USD 10 billion annually for developing countries, while for India, the loss could exceed USD 500 million each year.
Additionally, as the profits and revenues of digital players continue to rise steadily, the moratorium limits developing countries' ability to regulate such imports and generate additional tariff revenue.
It was last extended for two years at MC13, which was held in Abu Dhabi in 2024.
The expiry of the moratorium would enable countries to impose customs/import duties on electronic transmissions.
TRIPS:
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The failure to extend the e-commerce moratorium also led to the expiry of the safeguard against non-violation complaints under the TRIPS Agreement of the WTO.
Developing countries had relied on this safeguard to protect policy space, especially in areas like public health. This protection has been in place since 1995.
"Without it, even WTO-compliant measures – such as compulsory licensing – can be challenged by developed countries for affecting their expected commercial gains," Shrivastava said.
Section 3(d) of the Indian Patents Act, 1970, restricts patents for already-known drugs unless the new claims are superior in terms of efficacy. It curbs the evergreening of patents.
WTO REFORMS:
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GTRI said that efforts to agree on a WTO reform roadmap also failed, and a draft proposal to work toward reforms by 2028 could not gain consensus.
"The divide is clear – advanced economies want quicker decision-making and stricter rules, while developing countries want to protect policy flexibility and the consensus-based system. As a result, reform talks have been pushed back to Geneva with no immediate progress," it said.
