During the 13th Ministerial Conference, held in Abu Dhabi, the World Trade Organization (“WTO“) has extended a moratorium on digital trade tariffs for a further two years, at which point the moratorium will expire.
The Moratorium: A Brief Overview
The moratorium on e-commerce tariffs, officially called the moratorium on customs duties on digital transmissions, has been in place since 1998. It was initially introduced as a temporary measure but has been extended at each subsequent Ministerial Conference. The moratorium prevents WTO members from imposing customs duties on digital products and services, and as such promotes innovation and accessibility in the digital space.
The Extension: Looking Ahead
The recent extension of the moratorium was agreed upon by WTO members, despite strong opposition from countries such as India, Indonesia and South Africa. The extension is set to last until the next Ministerial Conference or 31 March 2026, whichever is earlier. It therefore offers a short period of certainty and stability for businesses in the rapidly evolving digital landscape.
The extension of the moratorium comes at a time when the broader negotiations on e-commerce within the WTO have been making slow progress. The future of the moratorium beyond the two-year extension remains uncertain. Discussions are ongoing around what digital tariffs would look like in practice which, alongside the continued negotiations at the WTO, will play a crucial role in shaping the future of digital trade.
Conclusion
The extension of the WTO’s moratorium on digital trade tariffs provides temporary relief for digital businesses and sets the stage for further discussions on the role of digital trade in the global economy. As the future of the moratorium beyond the two-year extension remains uncertain, we highly recommend companies begin assessing the potential financial and operational impacts of its removal on operations.
