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BRIEFING NOTES

E-commerce: duties on hold while impact discussed

Since 1998, WTO members have agreed not to impose customs duties on electronic transmissions. A work programme was set up at the same time to clarify the concepts and impacts of this new area in trade. One of the decisions ministers are expected to take at their 2009 conference in Geneva is to extend this “moratorium” on charging duties, as they have previously done from one ministerial conference to the next.

The work programme

Broadly speaking, electronic commerce is the advertising, sale and distribution of products or services electronically.

The WTO work programme was launched in 1998 and reinforced at the Doha Ministerial Conference in 2001. The General Council has decided that the task should cover reviewing all issues related to trade arising from global electronic commerce, including the economic, financial and development needs of developing countries.

Related issues have been examined by the Services, Goods and Intellectual Property (TRIPS) Councils and the Trade and Development Committee.
However, activity slowed in recent years. From the 2005 Hong Kong Ministerial Conference, when ministers last raised the issue, until the run-up to the Geneva Ministerial Conference in 2009, no substantive discussions took place.

Recent discussions

Then, in a series of meetings in October and November 2009, members discussed the content of a draft decision to be sent to ministers. Deputy Director-General Harsha Singh chaired the discussions on behalf of the General Council chairperson.

Some members expressed concern over the lack of work under the work programme. They suggested ways to reinvigorate the work, including a detailed schedule for the next two years. Many developing countries stressed that electronic commerce is important for their economies.

They agreed on a text, which ministers are expected to adopt. It includes six-monthly reviews, and a report to the General Council on progress under the work programme, to be submitted before the Ministerial Conference of 2011.

The draft decision

This is the decision that ministers are expected to adopt, as forwarded to them by the General Council.

“We take note of the reports from the General Council and subsidiary bodies on the Work Programme on Electronic Commerce and express our concern that the examination of issues under the Work Programme is not yet complete. We decide to intensively reinvigorate that work, based on the Work Programme and guidelines given in the General Council Decision of 25 September 1998.

“We instruct the General Council to hold periodic reviews of the progress on the Work Programme in its sessions of July 2010, December 2010 and July 2011. The reports of these reviews, including any recommendations for action, would be taken into consideration during our next session, which we have decided to hold in 2011, for decisions under this item.

“The Work Programme shall include development-related issues, basic WTO principles including among others non-discrimination, predictability and transparency, and discussions on the trade treatment, inter alia, of electronically delivered software. We agree to maintain the current institutional arrangements for the Work Programme.

“We decide that Members will maintain their current practice of not imposing customs duties on electronic transmissions until our next session, which we have decided to hold in 2011.”