In an effort to address the disparities in interpreting e-commerce trade in goods and services, India has urged the World Trade Organization (WTO) members to establish a concise and unambiguous definition. This move is expected to provide developing nations with the necessary policy flexibility to regulate and make decisions in the ever-expanding digital commerce landscape.
During a recent WTO meeting in Geneva, the discrepancies in understanding between developed and developing member nations regarding e-commerce were brought to light. A senior official from India emphasized the importance of a precise definition that accounts for both digital goods and services, considering the differing perspectives on imposing customs duties.
“India stated that the definition should be clear about digital goods and services because customs duties are there on goods and not on services. The Western world wants no customs duties, and on the other hand, developing countries want that policy space to impose the duties,” the official explained.
Amid the ongoing discussions on establishing global rules for e-commerce, India remains excluded from the dialogue involving a group of 80 countries. The United States recently withdrew from these talks, further complicating the ongoing efforts to frame comprehensive guidelines for the burgeoning digital trade sector.
The intricate nature of e-commerce, which involves the convergence of goods and services, presents a significant challenge in arriving at a definitive understanding. The official pointed out that platforms like Netflix, which provide a mix of digital products and services, further blur the lines between what constitutes a good and what qualifies as a service.
Given the absence of a clear consensus, the moratorium on imposing customs duties on electronic transmissions, in place since 1998, has been extended by the WTO during successive ministerial conferences. However, there is growing apprehension, particularly in India, about the need for customs duties to ensure a level playing field in the e-commerce arena.
India intends to contest the continuation of the moratorium on customs duties at the upcoming 13th ministerial conference of the WTO in Abu Dhabi scheduled for February next year. The lapsing of the moratorium is seen as essential to safeguard the policy space for developing nations to regulate digital imports and generate revenue through customs duties, thereby fostering their digital growth.
Drawing attention to the emergence of cryptocurrencies and their impact on the existing e-commerce framework, the Global Trade Research Initiative (GTRI) stressed the urgency of including discussions on their classification within the ongoing e-commerce negotiations. The rise of cryptocurrencies has introduced a new layer of complexity in the digital trade landscape, necessitating a deeper understanding and consideration within the broader framework of e-commerce regulations.
While the WTO defines e-commerce as the electronic production, distribution, sale, or delivery of goods and services, the complexities of the modern digital economy continue to challenge the existing norms, requiring a comprehensive and nuanced approach to ensure equitable and transparent global trade practices.