The World Trade Organisation’s Moratorium on Customs Duties Applied to Electronic Transmissions

Readers will recall that this issue has appeared on a regular basis in this Newsletter. The agreement must be confirmed every 2 years and comes up for renewal at WTO’s 13th Ministerial Conference (MC13) next February in Abu Dhabi. SA has consistently threatened not to approve the agreement along with India. EFA understands that there is a growing industry pressure in India to retain the agreement, and also in Indonesia, which is the only country with a customs regulation theoretically allowing it to apply customs to incoming electronic transmissions. SA has tabled a paper at WTO announcing that it will vote against the moratorium and demanding that the developed countries set up a fund to assist SMEs in developing countries to sell online.

While the latter request is interesting and deserves more thought, the news that SA will not agree the moratorium is not going to make it popular. Significantly this paper is only signed by SA. Neither India nor Indonesia are supporting. EFSA will send a letter to the Minister asking him to reconsider, however, if SA does not agree the moratorium under WTO’s unanimity rules it will fall away. We understand it may then be transferred to another international body and SA will be excluded. This will be a major shot in the foot for SA trade in services.