Revenue Implications of Eliminating WTO Moratorium on Electronic Transmission Duties ‘Relatively 'Small," OECD Says
The Organization for Economic Cooperation and Development recently released a report on the World Trade Organization moratorium on customs duties on electronic transmissions. The moratorium, in effect since 1998, is scheduled to expire this year. The report provides details of the “different issues at stake” in the debate over whether to extend the moratorium or eliminate it, the OECD said.
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Some WTO members are concerned about “possible foregone government revenue due to the” moratorium, the OECD said, adding, however, that there is “disagreement” on how to measure the moratorium’s impact. This has led to varying estimates of the revenue impact of the moratorium, ranging from $280 million to $8.2 billion, the OECD said.
The OECD urges WTO members to “take into consideration the wider benefits of the Moratorium and not focus solely on the revenue implications.” The organization said the report’s results suggest the “revenue implications … are likely to be relatively small and its discontinuation would cause wider economic losses, including losses to consumer welfare and export competitiveness.”
To help members understand the “full economic implications” of the moratorium, the OECD’s report also provides a “checklist of some of the factors to be considered” and dives into possible indirect consequences of lifting the moratorium. These include considerations about “who bears the burden of tariffs and whether tariffs are an appropriate and/or efficient tool for raising revenue,” the report said.
Renewing the moratorium is “crucial for business,” the U.S. Council for International Business said in a statement. The USCIB said it “has been actively engaged in pushing back against” opponents of the moratorium and said it wants to make it permanent. The moratorium issue will be considered during a WTO General Council meeting Dec. 9-11.