From UPSC perspective, the following things are important :
Prelims level : Not Much
Mains level : WTO moratoruim on E-commerce
- India and South Africa have asked the WTO to revisit the issues related with moratorium on customs duties on e-commerce trade, which is expiring in December this year.
- Since about 75 countries, led by developed country members, have launched pluri-lateral talks on e-commerce at the WTO.
- It is a good time for developing countries to discuss common concerns related to e-commerce.
- The member countries will brainstorm on straightforward matters such as whether binding rules on e-commerce could result in concrete gains for poorer countries.
- In addition, nuanced issues, such as the possibility of developing nations influencing the outcome of negotiations, will also be explored.
Why scrap WTO moratorium?
- The existing industries and tariffs play an important role in protecting infant domestic industries from more established overseas competitors until they have attained competitiveness and economies of scale.
- According to industry experts, India wants an end to the moratorium and imposition of import duties to protect domestic industry and revenue.
- Since 1998, the moratorium is being extended time and again for two years.
- The potential tariff revenue loss to developing countries is estimated at $10 billion.
- The moratorium will negatively impact the efforts of many developing countries, which are laggards as far as digital industrialization is concerned, to industrialize digitally.
Impacting digital industry
- Customs duty-free imports of digital products may also hinder the growth of the infant digital industry in developing countries.
- This will also negatively impact digital industrialization, local employment creation and erode trade competitiveness of small and medium enterprises (SMEs) in developing countries.