World Trade Organization negotiations ended this Monday (30) without an agreement on a reform plan or the extension of a moratorium on electronic commerce, increasing pressure on the trade body that finds itself increasingly affected by economic nationalism.
Four-day ministerial talks in Cameroon’s capital Yaoundé ended in the early hours of the morning with Brazil blocking a proposal from the United States and other countries to extend a moratorium on customs duties for electronic transmissions such as digital downloads and streaming.
“This marks yet another crack in the foundations of the WTO system,” argued Andrew Wilson, deputy secretary-general of the International Chamber of Commerce, urging delegates to renew the moratorium before states impose new fees on digital services.
Expectations of progress were low before the talks, but there were hopes that the moratorium – which has been renewed regularly since 1998 – would at least be extended.
Trade ministers were unable to agree to extend it beyond two years, which was not enough for the United States, diplomats said.
U.S. officials and business groups expressed frustration, and U.K. Business and Trade Secretary Peter Kyle called the failure to reach consensus a “major setback for global trade.”
The talks were seen as a test of the WTO’s relevance after a year of major trade turmoil and more recent disruptions due to .
Still, a subset of 66 members agreed to bypass previous hurdles to initiate the world’s first framework agreement on digital trade rules among participants.
Agreeing to a moratorium on e-commerce was seen as key to securing U.S. support for the WTO, which under President Donald Trump has distanced itself from global multilateral bodies.
WTO Director-General Ngozi Okonjo-Iweala said the trade body hoped the moratorium could be restored and that Brazil and the US were trying to reach an agreement on this.
A , and discussions on issues such as revamping rules to make the use of subsidies more transparent and facilitate decision-making are expected to continue in Geneva.
The US and the European Union argue that China, in particular, has taken advantage of the current rules.
US response
Diplomats worked throughout Sunday (29) to close the gap between Brazil’s initial two-year proposal on the moratorium and that of the US, which wanted a permanent extension, devising a plan for a four-year extension with a one-year transition period.
Brazil then offered a four-year extension with a mid-term review clause, but did not gain sufficient support.
Developing countries that oppose a long extension argue that the moratorium denies potential tax revenue.
A US official said Brazil had opposed a “quasi-consensual document”, stating that “it’s not the US against Brazil, it’s Brazil and Turkey against 164 members”. A Brazilian diplomat stated that “the US wanted the sky” and that it was not prudent to seek a longer extension, given the rapid evolution of digital trade.
Another diplomat shared that US Trade Representative Jamieson Greer made delegates “uncomfortable” by suggesting there would be “natural consequences” if an extension of the long-term moratorium was not agreed.
A US official commented that Greer explained that the WTO would become less relevant without this agreement and that discussions on digital trade would take place outside the organization.
Keith Rockwell, a trade analyst at the Hinrich Foundation and former WTO director, said Brazil’s efforts to leverage e-commerce to seek concessions in agriculture failed because the U.S. was no longer as committed to the WTO.
He pointed out that the impasse would boost alternative frameworks such as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership – a trade deal that encompasses 12 countries including Japan, the United Kingdom, Canada, Mexico and Australia, but not the US.
