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<\/a>\u201cIt\u2019s not a done deal,\u201d John Denton, secretary general of the International Chamber of Commerce, said of efforts to renew the arrangement. He cited Indonesia, the largest economy in southeast Asia, as a major holdout, with South Africa and India likely to follow.<\/p>\n\n\n\n
\u201cWe think this will go down to the wire,\u201d Denton said.<\/p>\n\n\n\n
World Trade \u2018Shockwave\u2019<\/strong><\/p>\n\n\n\n It\u2019s not the first time countries have threatened to let the moratorium lapse to win concessions from major exporters of digital services like the US. But there\u2019s a sense they\u2019re not bluffing this time.<\/p>\n\n\n\n Indonesia believes governments need to be free to impose tariffs in response to rapid change in the digital world, said Askolani, director general of customs and excise at the country\u2019s Ministry of Finance. India has signaled a similar position. A spokesman for South Africa\u2019s trade ministry declined to comment.<\/p>\n\n\n\n One difficulty is the lack of an international legal framework or standard definitions for digital trade. That means it\u2019s not clear how governments would apply tariffs \u2014 whether they\u2019d charge per transaction, per byte or per digital product, like a song, for instance.<\/p>\n\n\n\n The sums they\u2019d raise aren\u2019t huge. An October study by the Organization for Economic Cooperation and Development found that taxing digital transfers would only add about 0.1% to government revenue.<\/p>\n\n\n\n Still, ending the moratorium \u201cwill send a shockwave through the WTO,\u201d an organization dedicated to lowering trade barriers, said Keith Rockwell, its longtime spokesman.<\/p>\n\n\n\n \u201cFor the first time since the WTO\u2019s founding, members will have opened the door to applying new tariffs,\u201d said Rockwell, who\u2019s now a Geneva-based senior research fellow for the Hinrich Foundation.<\/p>\n\n\n\n More than 180 business groups around the world, including the US Chamber of Commerce, wrote an open letter backing the status quo. They said countries seeking to impose tariffs will harm themselves in the long run, by sending a negative signal about their business climates and openness to investment.<\/p>\n\n\n\n Prospects \u2018Uncertain\u2019<\/strong><\/p>\n\n\n\n Some corporations worry that the Biden administration isn\u2019t fully committed to defending the tariff ban. The US in October pulled a negotiating proposal from related WTO e-commerce talks about the flow of data across borders. Earlier it withdrew its text for the digital chapter of a trade pact with allies in the Indo-Pacific.<\/p>\n\n\n\n US Trade Representative Katherine Tai recognizes that there\u2019s a debate going on within the WTO about the moratorium, and looks forward to working with members on a solution, according to a senior US trade official.<\/p>\n\n\n\n European Union Vice President Valdis Dombrovskis, who oversees the bloc\u2019s trade policy, told a parliamentary committee this week that the prospects of extending the moratorium in Abu Dhabi \u201cremain uncertain.\u201d<\/p>\n\n\n\n \u2018Break the Internet\u2019<\/strong><\/p>\n\n\n\n Among the government agencies pushing for renewal is the United Nations Conference on Trade and Development, which promotes the interests of developing countries in world trade. UNCTAD says digital inequality widened during the pandemic.<\/p>\n\n\n\n It\u2019s \u201cincreasingly important to countries and businesses to be able to adapt to digital trade,\u201d said Torbj\u00f6rn Fredriksson, head of the agency\u2019s e-commerce group. \u201cUnfortunately, the rapid speed of digitalization tends to outpace the ability of many countries to do so.\u201d<\/p>\n\n\n\n With global trade increasingly fragmented amid growing great-power competition between China\u2019s national firewall model and the more open US system, getting a deal in Abu Dhabi to keep the internet tariff-free won\u2019t be easy.<\/p>\n\n\n\n \u201cIt\u2019s a bad time for multilateralism,\u201d said Martina Ferracane, a research fellow with the European University Institute, which recently launched a digital trade database. \u201cIt\u2019s not a moment in which countries are willing to create a new global consensus on almost anything.\u201d<\/p>\n\n\n\n Denton, who represents 45 million companies with the international chamber, made trips to Indonesia and Brazil in recent weeks arguing the case for keeping the moratorium.<\/p>\n\n\n\n Scrapping it, he said, could open up a protectionist abyss with \u201cthe capacity to break the internet.\u201d<\/p>\n\n\n\n<\/a><\/a>
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