Trade talks stall amid US-India split over e-commerce

· Michael West

Trade ministers are close to agreeing on a reform plan for the World Trade Organization as wrangling continues over ‌extending a moratorium on customs duties on electronic transmissions such as digital downloads, diplomats say.

The talks at a WTO meeting ‌in Cameroon include efforts to bridge differences between the US and India over extending the e-commerce moratorium, due to expire in March.

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Extending the moratorium – first adopted in 1998 as part of a declaration to encourage early digital trade growth – is seen as a test for the WTO’s relevance following a year of tariff-fuelled trade turmoil and major disruptions due ‌to the Iran war.

After initial resistance from some WTO members, a new draft of the reform roadmap ​provides a timeline for progress and sets out the key issues to address, according to a copy of the draft seen by Reuters.

Those issues include improving decision-making in a consensus-based system that has long been stymied by a few countries and the trade benefits extended to developing countries.

The reform debate comes amid efforts to rework WTO rules to make subsidy use more transparent ⁠and decision-making easier. 

The US and the EU argue China, ‌in particular, ​has taken advantage of current rules to their detriment.

Bringing an agreement reached by a subset of members ​aimed at boosting ‌investment in developing countries into WTO rules also remained blocked by India, which said plurilateral accords risked eroding the body’s founding principles.

Alongside the reform discussions, a senior diplomatic source – speaking on condition of anonymity – said there was a possibility of a four-year extension of the e-commerce moratorium.

The US wants a permanent extension to the e-commerce moratorium, trade chief Jamieson Greer says. (AP PHOTO)

India indicated on Friday it would accept ​a ​two-year extension, diplomats said, while there were suggestions ​the US could accept a 10-year extension, another diplomat said. 

US Trade ‌Representative Jamieson Greer said this week Washington wanted a permanent extension.

A new draft document on e-commerce seen by Reuters proposed support for developing country members concerned about losing tax revenues, as well as a review clause.

Business leaders say an extension is vital to guarantee predictability, fearing duties could otherwise be introduced. 

It is also seen as key to ​securing US support for the global trade body.

“If the moratorium does not get extended, the US will use it ​as an excuse to beat ⁠the WTO on the head,” a senior diplomat said.

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