US seeks permanent WTO digital trade moratorium

Key topics:US pushes for permanent WTO ban on tariffs for digital trade.Moratorium key for global digital services, AI, and Big Tech growth.India, South Africa, and other holdouts create uncertainty at MC14..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.By Brendan Murray.The US is pushing to make permanent an international ban on tariffs on ecommerce, setting the stage for a debate on America’s global dominance of digital services and data flows at the World Trade Organisation’s ministerial later this month.The WTO’s “moratorium on customs duties on electronic transmissions” has been renewed every two years since it was first instituted in 1998, back in the infancy of digital commerce. The prohibition’s wording was vague by design back then but it’s understood to mean economic activity that’s now ubiquitous — from online purchases and social media to data transfers and video calls.The moratorium has divided nations for nearly three decades as economies including Brazil, India and South Africa argued they wanted to preserve domestic policy options rather than rubber-stamp it. Behind that vague justification are concerns including the hit to customs revenue as online services replace goods purchases, US Big Tech’s growing market share, and data sovereignty and security issues more recently tied to the boom of artificial intelligence.A draft WTO statement of support for the moratorium circulated in late February included the US, Singapore, Argentina, Japan, South Korea, Mexico and 13 others. The Trump administration wants it to be permanent, making it the most consequential issue facing the Geneva-based organisation at its 14th biennial ministerial conference March 26-29 in Cameroon, known as MC14..Read more:.South Africa pushes to secure AGOA trade pact amid tariff threats.“Now is the time, in our view, for the WTO to act and for the ministers to make the ecommerce moratorium permanent,” said Ambassador Joseph Barloon, President Donald Trump’s point person at the WTO. “Businesses need that stability we think to really further digital trade, and just having that go from MC to MC to MC does not send the right signal. So that’s a key priority. ”In an interview with Bloomberg News on Friday, Barloon said the US currently has 22 co-sponsors.The European Union’s long-time support for a permanent extension remains in effect, according to European Commission spokesman Olof Gill.But heading into MC14 in Cameroon’s capital of Yaounde, South Africa’s stance remains unclear and India has raised concerns.Barloon said the traditional holdouts in the moratorium debates have a chance to send the world a message that the WTO can evolve with the internet age.Countries have an opportunity to “send a signal to the world that the WTO can actually adapt, the WTO can actually become more relevant for today’s economy,” he said. “So we’re hopeful that those other members that traditionally have been more hesitant to agreeing to the moratorium, will agree to it making it permanent.”.The stakes are high and rising for companies ranging from Spotify Technology SA and Alphabet Inc.’s Google to Amazon.com Inc., and also for governments that need revenue where they operate. The WTO estimates that digitally delivered services exports hit $4.8 trillion in 2024, about double the level reached in 2017. European and North American firms were the source of about 70% of that total. Taxation and regulation of digital services have for years sparked disagreement between Washington and Brussels. The Trump administration has complained about unfair treatment of US companies and threatened to seek redress through so-called Section 301 investigations like the kind the White House started launching last week.Yet customs duties on online trade remain an unsettled issue. Global business organisations view the WTO moratorium as essential to provide certainty and widen access to digital innovations and efficiencies to emerging economies. Another timely upside is keeping the internet free of the kinds of protectionist moves and retaliations involving tariffs on merchandise trade over the past decade. While another moratorium extension is likely, Washington’s push for permanence may be a tough sell in a political environment where trade tensions are high and the US is imposing tariffs on most of its major trading partners.‘Mood Music’“We’ve seen, particularly in the past two or three months in Geneva, a real shift in the mood music around the moratorium,” said Andrew Wilson, deputy secretary general for policy at the International Chamber of Commerce. “Now the vibe we get is very much that it’s unlikely that the US proposal for a permanent prohibition will pass, but there could be a compromise where instead of the usual two-year extension,” countries could renew it for four years, he said.Without an extension in Yaounde, the moratorium sunsets at the end of March, conceivably clearing the way for customs officials to collect duties on digital services of foreign companies.Most observers, though, see that as a remote possibility in the near term given how technically challenging it would be to measure transactions that zip invisibly across borders over fibre optic lines, mobile networks and subsea cables. Doing so would also likely invite a backlash from the US.For WTO members, failure to extend the moratorium would be a blow to Director-General Ngozi Okonjo-Iweala’s agenda and another setback for the forum’s attempts to write the rules of international trade by consensus.While the Trump administrations has criticized the effectiveness of the WTO, keeping the global internet free of tariffs is one area where it sees value in multilateralism.“The time has come to make this moratorium, which benefits all the members, to make it permanent. And we’re hopeful that we’ll be able to achieve that,” Barloon said. “Frankly we think the notion of just kicking the can down the road is not helpful.” Once a regular holdout in approving extensions of the moratorium, Indonesia has recently pledged its support to do so in its trade deal framework signed with the US in February. That was seen by some observers as a breakthrough.India’s RoleSecuring another extension — either permanent, or for another two years at least — likely hinges on India’s backing just as it did at the WTO’s last ministerial conference in Abu Dhabi in 2024.The US and India are currently negotiating the fine print in a trade deal that was outlined in a White House statement on Feb. 9, and digital pledges are part of that agreement..Read more:.Trump spares Big Tech from tariff hike.In it, India “committed to negotiate a robust set of bilateral digital trade rules that address discriminatory or burdensome practices and other barriers to digital trade.” That was less specific about its stance on customs duties on electronic transmissions than a earlier statement which underwent revisions, adding to the uncertainty about India’s position.“I still doubt there will be agreement on a permanent moratorium due to the need for consensus, and the fact that many other countries still oppose it,” said Martina Ferracane, an associate professor of international digital trade at Teesside University in the UK. “There might be space for a temporary renewal.”.© 2026 Bloomberg L.P.

US seeks permanent WTO digital trade moratorium

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