US Moves to Bypass WTO on Digital Tariff Moratorium

The United States and a group of allied countries plan to pursue their own moratorium on e-commerce tariffs if a global agreement cannot be reached at the World Trade Organization (WTO).

The move comes after a stalemate at the WTO, where Brazil and Turkey have refused to extend a long-standing moratorium banning tariffs on cross-border electronic transfers such as streaming services and software downloads.

A draft document indicates that the US and its partners want to conclude a multilateral agreement under which they "will continue to not impose customs duties on electronic transmissions among ourselves" for an indefinite period. The proposal is backed by Japan, South Korea and Australia, among others.

The moratorium, in place since 1998, is regarded by major digital economies as essential to the stability of global trade. Its potential non-renewal is seen as a sign of the WTO's weakening ability to address modern challenges. "It sends a clear signal that WTO rules are slowly eroding away", said Andrew Wilson, a representative of the International Chamber of Commerce.

Diplomats concede that the immediate imposition of tariffs is unlikely but warn of growing uncertainty for businesses. The US has stressed that a multilateral agreement remains its primary goal, while signaling it will work more closely with partners if that effort fails.

(reuters, max)