The Importance of Extending the WTO Moratorium on Customs Duties on Electronic Transmissions

WTO Members have maintained a moratorium on these customs duties since 1998, renewing it at each two-yearly Ministerial Conference. The primary goal of this moratorium agreement was to establish a duty-free environment for digital trade. For many years now, this approach has helped reduce uncertainties and deliver a predictable and non-discriminatory digital trade landscape. As digitally delivered products and services are increasingly the drivers of global trade, maintaining an open and duty-free environment is essential in supporting economic growth and sustainable development.

However, it is important to be aware that this moratorium is not permanent, and any continuation of it requires unanimous support from all WTO members at each Ministerial meeting. The most recent renewal took place in 2022, and the moratorium is set to expire at MC13 unless WTO members agree to renew it once again.

Despite its proven benefits, in recent years, several WTO members – most notably India, Indonesia and South Africa - have raised concerns over the continuing economic relevance of the moratorium. They are arguing this on the basis of the potential customs revenues they will be forgoing. This debate raises concerns that not all members will choose to support a renewal of the moratorium at the upcoming WTO MC13. Such a development could adversely affect global trade, economic growth and sustainable development.

Given this situation, it is imperative that WTO members agree on extending the WTO Moratorium on Customs Duties on Electronic Transmissions at the upcoming ministerial conference. Doing so will both support the continued growth of digital trade and uphold the principles of fairness and inclusivity in the global economy. The following paper describes what the moratorium is and why its continuation is so vital.