Netflix, Amazon could face tariffs on digital trade as Indonesia, India look to end tax moratorium
- Indonesia, India and South Africa are major holdouts in renewing a digital trade tariff moratorium that has been continuously renewed since 1998
- The World Trade Organization meets in Abu Dhabi next week to discuss the agreement, which expires in March, but opposition from one state could kill it
The decades-old global consensus that’s allowed e-commerce and a growing tidal wave of data to cross borders without tolls is at risk of falling apart.
Every couple of years since 1998, ministers Netat the World Trade Organization have renewed a moratorium on digital customs charges. It’s kept online transactions – a Netflix movie streamed in South Africa, an international Zoom call with a doctor in India, an e-book downloaded on a beach in Bali – free of tariffs throughout the internet age.
Maybe not for much longer. The WTO meets in Abu Dhabi next week with the latest moratorium set to expire in March. At least three large developing economies are signalling they’ll oppose another extension. Because the WTO operates on consensus, all it takes is one to kill it.
Ranking Digital Trade Openness
Here are the top five most and least open economies for digital trade
| Most Open | Least Open |
|---|---|
| New Zealand | China |
| Iceland | Russia |
| Norway | India |
| Ireland | Indonesia |
| Hong Kong | Vietnam |
Source: Digital Trade Restrictiveness Index, European Centre for International Political Economy
Now, emerging economies cite concerns about the dominance of US-based Big Tech – and other worries including risks from artificial intelligence, the need to protect data privacy, and the loss of customs revenue into the ether of the digital economy.