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The following story is from the November 12 issue of International
Trade Reporter
Current Reports:
WTO
WTO Members on Course for Ministerial
Deals on E-Commerce, TRIPs Disputes
GENEVA—Members of the World Trade Organization are on course to reach an agreement on two issues that will be discussed at the WTO's upcoming seventh ministerial conference starting later this month.
WTO members agreed in principle Nov. 6 on the wording of a ministerial decision that would result in a renewal of the organization's moratorium on the collection of duties on goods transmitted digitally over the Internet. The moratorium would continue until the eighth ministerial conference, which is due to take place sometime in late 2011.
In addition, WTO members have also agreed on the wording of a ministerial decision that would extend a moratorium on “nonviolation”
dispute cases under the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).
The agreements on the e-commerce moratorium and the TRIPs nonviolation moratorium were reached in separate meetings chaired by WTO Deputy Director-General Harsha Singh and Singapore's WTO ambassador Karen Tan, respectively.
The decisions on the e-commerce and TRIPs nonviolation moratoriums are two of only three decisions due to be taken at the Nov. 30-Dec. 2 ministerial conference, the first formal ministerial gathering organized by the WTO since December 2005. Members will also decide on the dates and location for the eighth ministerial conference.
WTO members originally agreed to the e-commerce moratorium at their second ministerial conference in Geneva in May 1998. In specific, members agreed to continue their current practice of not imposing duties on electronic transmissions—understood to mean data sent over the internet or other telecommunications means—until the next ministerial.
Even though the moratorium was not formally renewed at the next ministerial conference, the failed 1999 Seattle meeting, WTO members agreed to subsequent renewals at their 2001 Doha and 2005 Hong Kong conferences.
Compromise on E-Commerce
The agreed wording on the e-commerce moratorium reflects a compromise on proposed texts put forward by India, Pakistan, and Cuba during the negotiations.
The wording agreed to by members states that WTO members will maintain their current practice of not imposing customs duties on electronic transmissions until the next ministerial session, which members have decided to hold in 2011.
The draft agreement also stated that the WTO's existing work program on trade-related issues related to electronic commerce shall include development related issues, basic WTO principles such as, among other things, nondiscrimination, predictability and transparency, and discussions on the trade treatment of electronically delivered software.
Cuba insisted on the language relating to nondiscrimination, arguing that the U.S. trade embargo against the island is preventing it from integrating into the global system for electronic trade.
The WTO's ruling General Council would hold periodic reviews of the work program in July 2010 and July 2011 and an interim review of the work program in December 2010.
Symbolic Importance
Officials admit the e-commerce moratorium is mainly of symbolic importance.
No WTO member has signaled any intention of applying duties to electronic transmissions, and actual application is considered technologically difficult, if not impossible. The moratorium does not apply to sales taxes or other internal charges, and does not apply to goods ordered on the Internet and shipped physically across borders.
The moratorium on TRIPs nonviolation complaints refers to WTO rules which allow a government to initiate a dispute complaint if it can show that it has been deprived of an expected benefit because of another member's action, even if specific provisions of an agreement have not been violated.
WTO members can bring nonviolation complaints under the WTO's agreements covering goods and services. Provisions were written into the TRIPs Agreement setting out an initial five-year moratorium on such complaints for intellectual property disputes, with the moratorium being extended on successive occasions.
As in the case of e-commerce, WTO members have agreed on wording which would extend the moratorium until the eighth ministerial conference set for 2011.
By Daniel Pruzin
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