Talks at the World Trade Organization have reached a deadlock after Brazil blocked the extension of a moratorium on e-commerce tariffs. This means that the current ban on imposing tariffs on digital goods – including downloads, software, and streaming – has effectively expired. This was reported by Reuters, writes UNN.
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Thus, WTO member countries now formally have the opportunity to impose tariffs on electronic transmissions if a new agreement is not reached.
The breakdown of negotiations was another strong blow to the authority of the WTO, which is already experiencing a serious crisis of influence. The organization is increasingly unable to keep countries within common rules, especially amid global trade conflicts and new economic upheavals.
WTO Director-General Ngozi Okonjo-Iweala stated that the parties simply did not have time to reach an agreement, although the US and Brazil were still trying to find a compromise.
The US wanted stability, Brazil wanted more room to maneuver
Washington insisted on a long-term or even permanent extension of the moratorium, while Brazil advocated a shorter term and a stricter review of the terms.
Developing countries explain their position simply: they believe that the current regime deprives them of potential tax revenues that could be directed to their own economies.
Business got the worst-case scenario – uncertainty
For the global digital market, this decision creates a new level of instability. Companies operating in the field of digital services, software, and online content now risk facing new tax strikes in various countries.
Further negotiations are to continue in Geneva, but the very fact of such a failure shows that the global trading system is increasingly struggling with the new realities of the digital economy.