Global business unites in call to keep the Internet free of tariffs
ICC has today joined a global coalition of industry associations in urging members of the World Trade Organization to keep the Internet free of tariffs ahead of the 12th WTO Ministerial Conference (MC12).
Supported by 73 industry associations active across six continents, the Global Industry Statement on the WTO Moratorium on Customs Duties on Electronic Transmissions urges WTO Members to renew the Moratorium until the 13th Ministerial Conference.
The statement reads:
“Allowing the Moratorium to expire would be a historic setback for the WTO, representing an unprecedented termination of a multilateral agreement in place nearly since the WTO’s inception – an agreement that has allowed the digital economy to take root and grow. All WTO members have a stake in the organisation’s continued institutional credibility and resilience, as well as its relevance at a time of unprecedented digital transformation.”
ICC Secretary General John W.H. Denton AO said:
“Failure to renew the moratorium on customs duties on electronic transmissions would be a grave error on the part of WTO Members. At this critical juncture in our recovery from COVID-19, the Internet must remain free of tariff adventurism.”
The statement also notes the benefits of the Moratorium to the COVID-19 recovery, supply chain resilience and to MSMEs:
“Continuation of the Moratorium is critical to the COVID-19 recovery. As detailed by the United Nations, the World Bank, the OECD, and many other organizations, the cross-border exchange of knowledge, technical know-how, and scientific and commercial information across transnational IT networks, as well as access to digital tools and global market opportunities have helped sustain economies, expand education, and raise global living standards.
Continuation of the Moratorium is also important to supply chain resilience for manufacturing and services industries in the COVID-19 era. Manufacturers – both large and small, and across a range of industrial sectors – rely on the constant flow of research, design, and process data and software to enable their production flows and supply chains for critical products.
The Moratorium is particularly beneficial to Micro-, Small- and Medium-Sized Enterprises (MSMEs), whose ability to access and leverage digital tools has allowed them to stay in business amidst physical restrictions and lockdowns.”
Importantly, the statement pushes back against recent claims that WTO Members, particularly developing country Members, are losing customs revenue from the tariff-free transmission of digitized goods:
“[A]s the OECD has explained, “the revenue implications of the Moratorium are likely to be relatively small and its discontinuation would cause wider economic losses.” Other reports predict greater GDP losses due to potential implementation of retaliatory duties. Countries that impose such duties also face longer-term harms due to a less predictable investment climate, reduced foreign direct investment, and reduced access to knowledge, information, and digital tools needed by local students, patients, MSMEs, and other domestic constituents” (citations omitted).