Preserving E-Commerce Moratorium a Top Aim of US Delegation at WTO

A top official in the Office of the U.S. Trade Representative said that opposition to extending a moratorium on tariffs on sales of intangible goods has surfaced before, but that the e-commerce moratorium has been renewed at every World Trade Organization ministerial conference since 1998. "There are a few countries, despite benefiting from e-commerce and digital trade, who continue to resist an extension of the moratorium," she said, but most countries, including in the developing world, see the tariff-free status as important.

She talked with reporters on background ahead of the opening of the ministerial conference in Geneva that began June 12. "I am hopeful that we will get a moratorium," she said. Because the WTO works by consensus and not a majority vote, even if just three of the 164 members opposed extending the moratorium, it could lapse. According to a proposal posted at the WTO, Indonesia, South Africa and India are arguing that the inequitable gains from the digital economy need to be addressed.

However, 54 members, including the EU, the U.S., Japan and China -- but also smaller and larger developing countries such as Peru, Yemen, Nigeria, and Mexico -- are calling for a renewal of the moratorium.

The moratorium began in 1998, and has been renewed at every ministerial since then.

Thirty-four members of the House of Representatives, led by New Democrats President Rep. Suzan Del Bene, D-Wash., and Rep. Darin LaHood, R-Ill., wrote to USTR Katherine Tai asking her to make the renewal a top priority at the conference. The Ways and Means Trade Subcommittee's chairman and ranking Republican also joined the letter.

The members made the letter public in a June 13 press release. "Failing to renew the Moratorium, as we have done for more than twenty years, would undermine the strength of the American economy, jobs, and innovation. If the Moratorium is not renewed, governments around the world would be free to impose tariffs and other trade barriers on numerous American industries that transmit products and services electronically and rely heavily on the free flow of data around the globe, including manufacturing, agriculture, entertainment, software, financial services, semiconductors, aerospace, autos, robotics, and medical devices."

The official from USTR also said she hopes that the deadline of the ministerial conference will move WTO members to finally reach a compromise on overfishing negotiations, but reiterated that an agreement that doesn't change the status quo is not worth having.

"It has to be an agreement that actually does protect our oceans and fisheries, does promote sustainability, addresses the use of forced labor on fishing vessels, which is very well documented, and increases transparency in subsidies in this sector," she said.

The fisheries negotiations have been going on for 20 years. Some countries want exceptions or a longer phase-in, because they are not advanced economies. The official said a lot of the negotiation revolves around that argument. "What we want to see is disciplines that actually change the status quo, change some or all of the bad behavior that currently happens," she said. She said that having a very strict discipline with a lot of exceptions would mean nothing would change. And, she explicitly said, China doesn't deserve special treatment, because it is already the largest fishing nation in the world.

Many WTO watchers have said that if the fisheries negotiations cannot be concluded now, the WTO has become so dysfunctional that it is no longer relevant. The USTR recently said she didn't agree that it should be such a litmus test.

This official declined to say what the minimum outcome would be for the conference for her to consider it a success. "Maybe I’m one of those people that I set low expectations, but then I’m just so happy they’re surpassed," she said during a June 10 call with reporters.

Director-General Ngozi Okonjo-Iweala, at a press conference in Geneva June 12, said that even though there are still brackets in the texts of several negotiations, representing the desires of some members that have not found consensus, just having texts for trade ministers to negotiate is an achievement.

"It wasn't always evident that we could get to the point where we would have the texts that you see," she said. "We may have a lot of dossiers, a lot of potential, I don't know if we can land all of them, but if we land one or two I think that's success."

"We now need the political will from ministers to go the last mile," she said. "But let me be clear, even landing that one or two will not be an easy road. The road will be bumpy and rocky, there may be a few land mines on the way."

She said it would be "very helpful" if there could be an agreement on intellectual property waivers for COVID-19 vaccines and for trade in health items. She also said she's hoping "ministers will come to a sensible decision on" the e-commerce moratorium.

She said she is cautiously optimistic there will be at least one deliverable.

"I've said since I took office 15 months ago that achieving one or two deliverables at this meeting, this MC12, would be a success. And I haven't changed. Why? Because if you think at the last conference, at Buenos Aires, ministers walked away with no deliverable and no agreement," she said.

However, she sounded more pessimistic about the likelihood of wrapping up the fishery subsidies negotiations this week during the conference.

"It's been 21 years in the making, I think it's time for us to really try to come to an agreement. But let's be clear, where we are now represents considerable progress. There've been some very tough issues in the fisheries negotiations that we've been able to overcome that I thought we never would," she said. She suggested it could still happen, but might take more time than this week.