Customs Duty on e-transmissions-India, South Africa make New Submission at WTO

Argue that extension of moratorium will result in serious tariff loss for developing countries, as digitisable goods could be included

India and South Africa have made a new submission at the World Trade Organisation against the proposed extension of the moratorium on customs duty on electronic transmissions, raising concerns on the possible inclusion of digitisable goods in its scope that could severely hit developing countries.

“Today, members (countries) are waking up to the weighty impact of the moratorium assuming the scope of the moratorium is centred on digitised and digitisable goods...The moratorium will be equivalent to developing countries giving the digitally advanced countries duty-free access to our markets,” said a recent joint communication by India and South Africa to the General Council of the WTO.

The moratorium has been getting extensions every two years since 1998, when it was first introduced. It is due for an extension at the Ministerial Conference of the WTO, in June. The moratorium got temporarily extended for six months in December 2019, which was an unusual measure, as there was a delay in the scheduling of the conference.

Radical changes

India and South Africa argued that in 1998, the digital economy was at its inception, and the world wide web was only starting to be used by the general public. There was no clarity on how the economy would be transformed by digital advancements.

“Today, the digital economy is growing rapidly. This is radically changing trade as we knew it. With the advent of new technologies — 3D printing, big data analytics and artificial intelligence — our economy is being further transformed. With regards to traditional trade in goods, 3D printing is expected to be a game changer,” the submission said, adding that the moratorium would lead to loss of use of tariff as a trade policy, which historically has been important for the growth of developing economies.

All countries trying to catch up need time for their industries to become competitive before full liberalisation can be optimal, the submission said. “To do so (extend the moratorium) whilst industries are still struggling will consign many developing countries to be only consumers. This will be catastrophic for economic growth, jobs and the attainment of Sustainable Development Goals,” it added.