High stakes for S’pore if pact to freeze duties on e-services ends

Companies, consumers may have to pay more if WTO fails to renew moratorium at key conference this week

- Kang Wan Chern

A 26-year-old trade rule protecting cross-border digital services from Customs duties could expire in March if members of the World Trade Organisation (WTO) fail to renew it this week.

The stakes will be high for tradedependent Singapore at the biannual Ministerial Conference, which is the WTO's highest decisionmaking body.

Now in its 13th iteration, the conference is being held from Feb 26 to Feb 29 in Abu Dhabi, and brings together all 164 members of the WTO to formally discuss and decide on pressing trade issues.

Singapore, a strong supporter of the open, rules-based multilateral trading system under the WTO, will be represented at the conference by Minister for Trade and Industry Gan Kim Yong.

On the agenda is extending the digital trade rule, known as the Customs Moratorium on Electronic Transmissions, or the E-commerce Moratorium, which has come under rising threat since it was last renewed two years ago.

In the light of technological changes and rapid growth in digital trade, concerns are mounting among some member countries over the lack of clarity regarding the scope of the moratorium and the definition of "electronic transmission", as well as the potential forgone Customs revenue, the WTO said.

Mr Gareth Tan, a representative of the Coalition for Digital Prosperity for Asia, noted that there is no accepted common definition of "electronic transmission". "The term can be interpreted to include almost everything delivered electronically, whether it's e-mails, or text messages, streaming content or video games." Countries with large, emerging economies, such as Indonesia, India and South Africa, are among those most likely to decide against extending the moratorium as they have expressed a desire to maintain policy space, said Mr Tan.