WT/GC/W/747  
 
13 July 2018  
(18-4383) Page: 1/2 
General Council  
26-27 July 2018  Original: English  
 
WORK PROGRAMME ON EL ECTRONIC COMMERCE  
MORATORIUM ON CUSTOM S DUTIES ON ELECTRON IC TRANSMISSIONS: NE ED FOR A RE -THINK  
Communication from India and South Africa  
The following communication, dated 12 July 2018, is being circulated at the request of the 
delegation s of India and South Africa . 
 
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1  BACKGROUND  
1.1.  The realities prevailing in 1998, when WTO Members agreed for the first time to the 
temporary moratorium on customs duties on electronic tr ansmissions, have changed significantly 
during the subsequent two decades. These changes necessitate a re -examination of the 
implications of the temporary moratorium, particularly from the develop ment perspective.  
1.2.  While there is no definitive estimate of the volume of cross -border electronic transmissions, it 
is likely that the volume of such transmissions has increased manifold over the past two decades. 
Further, until a few years ago, electronic transmissions were  mainly used to deliver digitalised 
products, such as e -books, music and a variety of services.  
1.3.  With increasing diffusion of additive manufacturing technology through 3 -D printing, 
electronic transmissions have now acquired  an additional salience in manuf acturing physical 
products. Both these trends are likely to become more prominent in the near future, thereby 
bringing electronic transmissions closer to the centr e-stage of national economies. This compels a 
rethink of the role of the temporary moratorium  on customs duty on electronic transmissions.  
1.4.  As more products, which are presently traded in physical form, get digitalised and delivered 
through electronic transmissions , the moratorium on customs duties would result in higher 
revenue loss.  
2  ISSUES OF IN TEREST AND CONCERN  
2.1.  An analysis by UNCTAD suggests that it would mostly be developing countries, which would 
suffer loss in customs  revenue, if the temporary moratorium on electronic transmissions is made 
permanent .1  
2.2.  Further, a moratorium on customs dutie s on electronic transmissions could imply that 
customs duties are not imposed  on products exported in digitalised form, even if the bound rate on 
the same product, if it is delivered in the physical form, is not zero. Thus, a moratorium on 
customs duties o n electronic transmissions could in effect undermine the existing schedule of tariff 
concessions of WTO Members. Given the fact that the average bound tariffs of developing 
countries are considerably higher than those of developed countries, a moratorium o n customs 
                                                
1 Rising Product Digitalisation and Losing Trade Competitiveness, UNCTAD . WT/GC/W/747  
 
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  duties on electronic transmissions could significantly alter the negotiated balance of rights and 
obligations.  
2.3.  In this regard, a related issue which merits careful consideration is the scope of the 
e-commerce  moratorium. While the WTO Ministerial Declaration and subsequent decisions apply 
the mora torium to 'electronic transmissions ', there is no agreed definition nor common 
understanding amongst the Membership of what is covered under 'electronic transmissions '.  
2.4.  The above are issues of critical importance to most, if not all developing countries, given the 
role of development  and industrial policies in the digital age.  
3  WAY FORWARD  
3.1.  In accordance with the 1998 Work Programme on Electronic Commerce which has bee n 
reaffirmed  at MC11, we request Members to examine all the above -mentioned and other issues 
related to the imposition of customs duties on electronic transmissions in the General Council.  
 
 
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