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WTO fails to reach consensus on key e-commerce moratorium, reforms

New Delhi, Mar 30 (PTI) The WTO ministerial conference in Yaounde, which concluded on Monday, failed to reach any agreement on key issues, including the extension of the moratorium on e-commerce and reforms of the global trade body. The 14th ministerial conference (MC), which concluded in the early hours on March 30 in the capital city of Cameroon, could not reach a consensus on a moratorium on non-violation complaints under the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). Talks on the e-commerce import duty moratorium reached a deadlock between Brazil and the US. While some member countries agreed to a four-year extension, Brazil was negotiating for two years, but the US was pushing for a longer duration of five years. In May 1998, WTO members agreed for the first time not to impose customs duties on electronic transmissions for two years, a moratorium that has been extended biennially since then. Its expiry would open the door to imposing tariffs on e-commerce. E-commerce moratorium expires for the first time in 26 years. The 14th Ministerial Conference (MC14) of the World Trade Organization (WTO) began on March 26 in the capital city of Cameroon. Though the talks were scheduled to end on March 29, they were slightly extended and concluded on March 30. Cameroon's Minister of Trade Luc Magloire Mbarga Atangana, the Chair of MC14, said that trade ministers worked to conclude as many issues as possible across various areas of negotiation during the four-day meeting. However, he said "we ran out of time" with regard to several outstanding issues, such as the WTO's work programme on electronic commerce and the continuation of the existing moratoriums on customs duties for electronic transmissions and non-violation complaints under the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). Director-General Ngozi Okonjo-Iweala suggested that members use the draft texts developed over the four days of ministerial discussions to finalise agreements on outstanding issues in Geneva at the next General Council (GC) meeting. GC is the second-highest decision-making body of the WTO after the MC. She welcomed the progress in discussions on a work programme for advancing ongoing talks on WTO reform, the decision on advancing work on further disciplines on harmful fisheries subsidies, and other issues. The WTO, in a statement, said ministers agreed to continue engaging in negotiations on fisheries subsidies, aiming to make recommendations to the 15th Ministerial Conference. The Ministerial Conference, held every two years, is the highest decision-making body of the WTO. Nearly 2,000 trade officials, including more than 90 ministers, attended the MC14. It was only the second time the MC was held in Africa. The MC10 was held in Nairobi in 2015. In a social media post, Commerce and Industry Minister Piyush Goyal said: "Going forward, India will continue to engage with WTO members on issues of critical importance for the global trade landscape, transparently, constructively and in good faith!" ECOMMERCE MORATORIUM: ------------------------------ WTO's work programme defines e-commerce as the production, distribution, marketing, sale or delivery of goods and services by electronic means. Products that were always traded physically are now increasingly traded digitally, with streaming services progressively taking the place of CDs or DVDs and with e-books witnessing growing demand. Customs duties are usually applied by WTO members on imported goods, but since 1998, they have agreed not to impose tariffs on electronic transmissions. WTO members have agreed not to impose customs duties on electronic transmissions such as digital downloads and streaming since 1998. However, on multiple occasions, developing nations have opposed the extension as they are witnessing a rise in the imports of electronic transmissions, mainly items like movies, music, video games and printed matter, some of which could fall within the scope of the moratorium. Think tank GTRI said the US, supported by the EU and Japan, pushed for a long-term or permanent extension, while India and other developing countries opposed this, arguing it would lock in revenue losses and limit policy space in a rapidly growing digital economy. "With no agreement, the moratorium lapsed for the first time in 26 years, opening the door for countries to impose tariffs on digital transmissions," GTRI Founder Ajay Shrivastava said, adding most gains from waiving such duties accrue to top US tech firms, including Google, Amazon, Microsoft, Apple, Netflix, and Meta. The extension also carries revenue implications, with estimates suggesting potential tariff revenue losses of about USD 10 billion annually for developing countries, while for India, the loss could exceed USD 500 million each year. Additionally, as the profits and revenues of digital players continue to rise steadily, the moratorium limits developing countries' ability to regulate such imports and generate additional tariff revenue. It was last extended for two years at MC13, which was held in 2024 in Abu Dhabi. The expiry of the moratorium would enable countries to impose customs/import duties on electronic transmissions. TRIPS: ------- The failure to extend the e-commerce moratorium also led to the expiry of the safeguard against non-violation complaints under the TRIPS Agreement of the WTO. Developing countries had relied on this safeguard to protect policy space, especially in areas like public health. This protection has been in place since 1995. "Without it, even WTO-compliant measures, such as compulsory licensing, can be challenged by developed countries for affecting their expected commercial gains. For India, this increases the risk of disputes over its intellectual property rules, including provisions like Section 3(d) of its patent law," Shrivastava said. Section 3(d) of the Indian Patents Act, 1970, restricts patents for already-known drugs unless the new claims are superior in terms of efficacy. It curbs the evergreening of patents. WTO REFORMS: ------------------ GTRI said that efforts to agree on a WTO reform roadmap also failed, and a draft proposal to work toward reforms by 2028 could not gain consensus. "The divide is clear - advanced economies want quicker decision-making and stricter rules, while developing countries want to protect policy flexibility and the consensus-based system. As a result, reform talks have been pushed back to Geneva with no immediate progress," it said. INVESTMENT FACILITATION FOR DEVELOPMENT AGREEMENT (IFDA): --------------------------------------------------------------------------- This China-led pact was backed by most members and was opposed solely by India. India argues that bringing such plurilateral deals into the WTO would weaken its multilateral nature and allow smaller groups to shape rules. PTI RR CS BAL BAL

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