WITSA Applauds Extension of WTO’s Moratorium on Customs Duties on Electronic Transmissions

MEDIA RELEASE June 17, 2022Contact: Dr. Jim Poisant, Secretary General. Mobile +1 703 728-4547 E: jpoisant@witsa.orgMr. Anders Halvorsen. Mobile: +1 571 265-5964 E: ahalvorsen@witsa.orgWITSA Applauds Extension of WTO’s Moratorium on Customs Duties on Electronic Transmissions Fairfax, VA: The World Innovation, Technology and Services Alliance (WITSA) welcomes the World Trade Organization’s decision to extend the moratorium on placing customs duties on electronic transmissions, from streaming services to financial transactions and corporate data flows, worth hundreds of billions of dollars a year. The moratorium, which has been in place since 1998, was extended until the next WTO ministerial conference, which would normally be held by the end of 2023, but in any case, will expire on March 31, 2024. A few countries had been critical of further extensions, citing lost customs revenues.“The customs revenue implications of the Moratorium are likely to be small and outweighed by important gains from ensuring that electronic transmissions remain tariff-free”, stated WITSA Secretary General Dr. Jim Poisant. “On the basis of existing evidence, there is therefore, a strong case for renewing the Moratorium. Overall, the fiscal policy case for abandoning the Moratorium on customs duties on electronic commerce does not stand up to scrutiny”, continued Dr. Poisant.The fiscal policy case is just one part of the equation. There are considerable benefits from digitalization for trade across all sectors of the economy and for countries at different levels of development. Electronic transmissions reduce trade costs and imposing tariffs is welfare-reducing. Moreover, empirical evidence suggests that the use of foreign business services is key for export competitiveness. 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 lockdown.“WITSA is pleased that WTO members ultimately took into consideration the wider benefits of the Moratorium and did not focus solely on the potential customs revenue implications,” said WITSA Vice President for Global Public Policy Anders Halvorsen. “A lapse would come at the expense of wider gains in the economy, including in terms of consumer welfare and export competitiveness”, continued Halvorsen. The onus is now on the WTO members to come together to agree on a permanent solution to the moratorium before the next ministerial”.About WITSA: The World Innovation, Technology and Services Alliance (WITSA) is the leading recognized international voice of the global digital technology industry, whose members from over 80 countries and economies represent more than 90 percent of the world tech market. WITSA is dedicated to advocating policies that advance industry growth and development; facilitating international trade and investment in digital technology products and services; strengthening WITSA’s national industry associations; and providing members with a broad network of professional contacts.WITSA members are leaders in a globally interconnected marketplace. Because the challenges facing the digital technology industry are undisputedly global in nature, WITSA members work together to achieve a shared vision on important issues of common interest. WITSA makes it possible for its members - ranging from Mongolia and Argentina to Kenya and the United States - to identify common issues and priorities, exchange valuable information, and present a united position on industry issues. For more information on WITSA, please visit https://witsa.org/.