Citing diplomats in Geneva, Reuters said on May 5 (local time) that there was little chance the standoff between the United States and Brazil and Turkey would be resolved ahead of a WTO General Council meeting in Geneva on May 6, and that Washington has prepared an alternative.
The U.S. proposal is a plurilateral agreement under which participating WTO members would pledge not to impose tariffs on electronic transmissions between them. A draft text says that starting May 8, “we,” as co-sponsors of the document, will continue not to levy duties on electronic transmissions among ourselves.
A senior diplomat told Reuters that if positions do not change at the General Council, the United States plans to press ahead with the agreement based on support so far from countries including South Korea, Japan, Australia and New Zealand.
Reuters said it was not immediately clear how many WTO members would join the U.S. initiative.
The e-commerce moratorium, often described as “digital tariff-free,” was first adopted at a WTO ministerial meeting in 1998 and has been renewed regularly. It bars tariffs on cross-border electronic transmissions such as music and movie streaming and software downloads.
But an extension failed in March at a WTO senior-level meeting in Yaounde, Cameroon. The previous moratorium had been valid through March 31, but the collapse of talks meant the multilateral trade mechanism lost effect.
The United States and other large digital-economy members including the European Union, Canada and Japan have argued the moratorium should be made permanent, saying it provides predictability for global digital trade.
South Korea, too, has a growing share of exports in digital content such as webtoons, games and software, making the question of e-commerce tariffs a potentially important trade variable.
Andrew Wilson, deputy secretary-general for policy at the International Chamber of Commerce, warned that failing to restore the multilateral moratorium would damage the WTO’s credibility. “This sends a clear signal that WTO rules are slowly weakening,” he said, adding that a plurilateral deal would be only a second-best option, would not apply universally and could add uncertainty for businesses.
* This article has been translated by AI.
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