NEW DELHI: As the World Trade Organization’s (WTO’s) 14th ministerial conference (MC14) drew to a close on Sunday, member nations were considering a five-year extension of the global ban on ecommerce tariffs, even as India continued to resist a long-term moratorium citing concerns over revenue loss, a Bloomberg report said.
Under the WTO moratorium, countries do not impose Customs duties on cross-border electronic transmissions. For nearly three decades, member nations have agreed to extend it every two years, though they remain divided over whether it should continue. At the 13th WTO ministerial conference in 2024, members agreed to maintain the practice of not imposing such duties until the next ministerial conference.
There was no clarity on the ministerial declaration at the time of going to press.
According to the Bloomberg report based on a draft statement, countries have agreed to maintain the practice of not imposing tariffs on online digital-services trade until June 30, 2031.
Most developed countries, including the United States (US), want the moratorium to be made permanent. Developing countries such as India, however, have argued for policy space to impose Customs duties on electronic transmissions, saying the moratorium has hurt revenue collections.
The US has been pushing strongly to make the ecommerce duty moratorium permanent, while India is willing to accept only a temporary extension.
“I want to be clear: The US is not interested in another temporary extension of the moratorium. It would not provide our businesses the certainty needed for their operations. It would also further weaken the WTO’s standing,” US Trade Representative Jamieson Greer had said in a video message on Thursday.
Commerce and Industry Minister Piyush Goyal, on the other hand, called for a careful review of the moratorium on customs duties on ecommerce, citing the lack of a common understanding among WTO member nations on its scope and its potentially significant implications.
“In the absence of a common understanding among members on the scope of the moratorium on Customs duties on electronic transmissions, and given its potentially significant implications, the continued extension of this moratorium warrants careful reconsideration,” Goyal had said.
Despite sharp divergences among countries on issues related to ecommerce and investment, issuing a declaration at the end of the ministerial meeting is crucial to restoring faith in multilateralism. The previous two ministerials — the 12th and 13th — were extended by a day due to logjams over key issues before a declaration or a roadmap could be finalised.
During MC14, India “showed courage” in standing “alone” on the contentious issue of the Investment Facilitation for Development (IFD) Agreement, Goyal has said. New Delhi has resisted pressure to join the IFD Agreement, which is backed by a majority of WTO members — 129 of the 166.
India has argued that incorporating the IFD Agreement risks eroding the functional limits of the WTO and undermining its foundational principles. “At WTOMC14… India showed the courage to stand alone on the contentious issue of the IFD Agreement and did not agree to its incorporation into the WTO framework as an Annex 4 Agreement,” Goyal said on social media on Saturday night.
The agreement aims to enhance transparency in investment regulations to make countries more efficient and attractive to foreign and domestic investors. However, India believes it could dilute the multilateral nature of the WTO.
Supporters of the IFD want to introduce the proposal through Annex 4 of the WTO framework, under which the agreement would be binding only on signatory members and not on those opposed to it. However, even inclusion under Annex 4 requires consensus among all WTO members.
At the biennial meeting, which was scheduled to conclude on Sunday in Cameroon, India, along with South Africa and Oman, proposed a time-bound plan to advance WTO reforms. According to a communication from the three countries on the draft ministerial statement on WTO reform, the General Council of the global trade body should appoint facilitators to lead discussions on key issues.
An official statement from the Department of Commerce said India actively contributed to shaping the ministerial decision that sets out the future course of Phase II negotiations on fisheries subsidies related to overcapacity and overfishing.
“Keeping sustainability concerns at the forefront…India emphasised that Phase II negotiations must reflect core principles of equity, including Special and Differential Treatment (S&DT) for developing countries and Least Developed Countries, as well as the principles of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) and the Polluter Pays Principle. Consistent with these principles, India highlighted key priorities such as a 25-year transition period for developing countries, stronger disciplines on distant-water industrial fishing fleets, a permanent carve-out for small-scale and artisanal fishers, and subsidy disciplines based on per capita intensity, thereby broadening the scope of Phase II discussions,” the statement said.
Goyal also pointed out that India is not a heavily industrialised fishing nation and does not have large-scale distant-water fleets or heavily mechanised operations. He added that India’s fisheries subsidies are among the lowest in the world — barely about $15 per fisher family annually — compared with tens of thousands elsewhere.
Source: Business Standard
