In a major update for cross-border trade, 91 countries have agreed on new e-commerce standards, ending five years of consecutive negotiations.
The last agreement includes an extension of the moratorium on the levying of taxes on cross-border electronic transmissions and is part of the World Trade Organization’s Joint Statement Initiative on Electronic Commerce.
The moratorium, which is crucial for global digital trade, ensures that no customs duties are levied on electronic transmissions between different countries.
Cross-border electronic shipments are not taxed
The agreement covers a wide range of transmissions, including video, audio and written text. Although no customs duties have ever been applied to the sector, the agreement affirms the importance of the free flow of data. It also leaves the door open to future “internal taxes, fees or other charges on electronic transmissions.”
Domestic taxes could solve the problem of social networks and search engines paying taxes to support local journalism. However, Meta and others oppose this proposal.
Other key areas highlighted in the statement include facilitating cross-border e-commerce for SMEs by cutting red tape, making government data both available and machine-readable, combating spam and addressing cybersecurity.
Australia, Japan and Singapore have also pledged to support less developed countries by providing technical assistance and capacity-building opportunities.
What is good news for consumers and businesses now, however, may not last forever. The moratorium on taxing electronic transmissions is being extended for two years, after which a review could lead to a change of position.
Nevertheless, the agreement is an important step in global trade and focuses on a growing trade area that must be properly stimulated to encourage growth, without restricting countries, companies and consumers.
