Trade
The risks that taxing digital trade at the border pose to Pacific small business
Straw-Hat, a Fiji-based sustainability consultancy, relies on cross-border digital tools to support MSMEs and connect to international clients. If the WTO e-commerce Moratorium were to lapse – meaning customs duties on electronic transmissions could be introduced – higher digital transaction costs could weaken the competitiveness of smaller Pacific island firms, says Straw-Hat Co-founder Sagufta Janif. The impact, she warns, would impact not just business but the communities they serve.
Sagufta Salma Janif
Co-Founder/Lead Consultant
Straw-Hat Consultancy
Fiji
When Sagufta Janif founded Straw-Hat Consultancy in 2018, her goal was to help businesses, and particularly MSMEs, become drivers of sustainable, inclusive growth by equipping them with the right tools, insights and support to improve environmental, social and governance (ESG) performance. Today, Straw-Hat works with private-sector firms, and multilateral and development organisations, delivering advisory services, training and capacity-building programmes.
Yet, what makes Straw-Hat distinctive is not just its focus on sustainability, but the way it operates. Based in a small Pacific island economy, the consultancy operates fully online, Ms Janif explained.
“We use cloud technology, Zoom, and email exchanges,” she says. Moreover, the company is preparing to launch a self-help online portal that will allow businesses to evaluate their ESG standing and identify improvement pathways, a step that deepens its digital engagement.
It is this digital model which allows Straw-Hat to reach markets far beyond Fiji, a country with a population under one million and heavily dependent on international demand.
“80% of our revenue comes from our international clients,” she says, pointing to commercial partners in Australia, China, Germany, the United Kingdom and the United States.
For this consultancy on a small Pacific island, digital access is inseparable from growth. “Our website is the face of our business; that’s our home. We don’t have an office. We operate from anywhere in the world and can only grow if we go digital and offer our services internationally.”
Pacific islands already face steep digital barriers
Straw-Hat faces structural barriers that are common across the Pacific. Only around 58% of the population in Pacific Small Island Developing States (SIDS) is covered by 4G networks and Internet access in Fiji remains more expensive than global averages, despite the introduction of starlink and new undersea cables. Even routine online payment systems present obstacles. “Our clients can’t pay directly through our website,” Ms Janif said. “We have to provide a physical bank account and they have to go in person to transfer.” Integrating a digital payment gateway on the website would require a FJD 25,000 deposit, equivalent to over US$ 11,000 – a prohibitive cost for businesses in the pacific hoping to expand to global markets.
For Ms Janif, digital trade reduces the disadvantage of geography. But when connectivity is costly, infrastructure limited and financial systems underdeveloped, participation in global markets is already fragile. Introducing customs duties on electronic transmissions – as is the risk if the WTO e-commerce Moratorium were to lapse – would further add cost and uncertainty to the type of cross-border digital services on which Pacific MSMEs depend. In short, for Ms. Janif additional digital transaction costs would severely undermine Straw-Hat’s competitiveness.
“We’re a lean consultancy firm competing with large firms with abundant resources. If the moratorium lapses, clients might look elsewhere, countries that could offer competitive pricing and those that have the ability to absorb the costs ”, she warns.
The consequences of taxing digital trade would be felt by the communities Straw Hat serves
Straw-Hat links business sustainability with community impact. Revenue from commercial work supports local enterprises, cooperatives and women-led businesses, often through pro bono advisory services. Ms. Janif said: “So it’s not just an impact on our business, but also on the communities and the people that we serve.”
She recalls a market vendor adopting mobile wallet payments. “It’s safe, convenient and facilitates getting more customers.” Yet even small additional fees can erode fragile earnings. “If they make US$20 a day, paying extra fees can make a huge difference.” For micro-entrepreneurs such as market vendors and coastal fishers, these amounts are not small at all”, she added.
Her message to policymakers is clear: “If you are really talking about supporting small island developing economies, then the moratorium needs to stand, otherwise we create an even wider gap and ultimately the people suffer.”
ICC is committed to securing what business needs at the WTO’s 14th Ministerial Conference in March 2026. Learn more about the importance of renewing the WTO e-Commerce Moratorium and our call for WTO reform.
