WTO MC13: A decisive moment to advance digital trade

The 13th Ministerial Conference of the World Trade Organization from 26 to 29 February 2024 in Abu Dhabi will be crucial to demonstrate the organisation’s ability to cope with global challenges and advance the trade rules of the 21st century. It is a good opportunity to move forward on key digital trade files.

We call on WTO member states to:

• Make permanent -or at a minimum extend- the Moratorium on Customs Duties on Electronic Transmission, including content transmitted electronically;
• Conclude the negotiations for the Joint Statement Initiative (JSI) on E-commerce in 2024. Any agreement must contain an ambitious timeline and clear commitments about continuing the process of negotiating binding rules on data flows and source code. The agreement must likewise include clear and binding commitment of all negotiating parties to permanently ban the imposition of customs duties on electronic transmissions; and
• Bring together a motivated coalition of countries to expand both the product and geographical scope of by initiating negotiations on an expanded Information Technology Agreement (ITA3), while also extending the geographical reach of current ITA agreements (ITA1 and ITA2). Simultaneously, the enforcement of existing agreements must remain a priority.

Detailed MC13 Priorities

Securing the Moratorium on Customs Duties on Electronic Transmissions

For more than two decades, WTO members have maintained the Moratorium preventing the use of customs duties on electronic transmissions.

Letting the Moratorium expire without renewal or making it permanent would constitute an unprecedented setback at a time when the relevance of the WTO hangs in the balance. We count on all Member States to do their utmost to secure the Moratorium. In practical terms, the expiry of the Moratorium would:

• Prove counterproductive to all participating members, especially in countries with less developed digital infrastructure, facing far greater costs to their economies than any revenue the measure might generate at the border and result in less availability of products;
• Participation in the ITA Agreements has become a virtual prerequisite for developing countries that are seeking to attract semiconductor investment or participate in global technology supply chains;
• Significantly increase costs to businesses and introduce needless economic strain, which would disproportionately affect SMEs, who rely on the Moratorium for access to digital tools;
• Further complicate efforts to reduce the “Digital Divide” (supported by numerous UNGA resolutions); and
• Hinder progress towards the UN Sustainable Development Goal No. 9 to build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.

We therefore call on all WTO members to make permanent -or at a minimum extend- the Moratorium at MC13.

Advancing the E-commerce negotiations

In December 2023, the co-convenors of the JSI on E-commerce published a joint statement to announce their intention to ”conclude negotiations in a timely manner in 2024”.

The negotiations are crucial to overcome global barriers to the free flow of data. Unjustified barriers to cross-border data flows impede innovation and access to the most advanced technologies. A DIGITALEUROPE study conducted by Frontier Economics showed that overall, Europe could be €2 trillion better off and gain two million jobs by the end of the Digital Decade if we reverse current trends and harness the power of international data transfers.

Therefore, we welcome the renewed impetus to conclude the negotiations in the first half of 2024. We welcome the progress achieved on digital trade facilitation, open digital environment, and business and consumer trust. At the same time, we regret that the agreement that may be found in 2024 is unlikely to contain binding rules on data flows, source code or data localisation.

Any agreement that may be found must contain an ambitious timeline and clear commitments about continuing the important process of negotiating binding rules on data flows and source code.

Similarly, any conclusion of the JSI needs a clear and binding commitment of all negotiating parties to permanently ban the imposition of customs duties on electronic transmissions. A strong, binding clause on the Moratorium in the JSI will be crucial for achieving predictable rules for the growing digital economy.

Expanding the Information Technology Agreement

The ITA, following its 2015 expansion has generated approximately US $50 billion in tariff savings on global ICT sales each year, contributing roughly US $190 billion to global GDP. We call for more governments to join and become signatories of the ITA. It is evident to us that expanding the ITA’s product and geographical scope should be complemented by efforts in JSI E-commerce. Simultaneously, our objective remains the enforcement of already established commitments under the ITA.

MC13 represents a distinctive opportunity to unite a motivated coalition of countries, propelling efforts towards both the ITA3 and the geographical expansion of current ITA agreements.