US plans to push 'digital duty-free' amid WTO deadlock…supported by Korea, Japan, etc.

"US plans to push 'digital duty-free' amid WTO deadlock…supported by Korea, Japan, etc."

Reuters report…US prepares its own plan after e-commerce tariff moratorium fails

As negotiations at the World Trade Organization (WTO) over the moratorium on e-commerce tariffs continue to be deadlocked, the United States plans to join hands with South Korea, Japan, and others to push ahead with a 'digital duty-free' measure, Reuters reported on the 5th (local time).

Quoting diplomats stationed at the WTO, Reuters reported that "there is little prospect of resolving the deadlock between the United States, Brazil, and Turkey ahead of the WTO General Council meeting to be held in Geneva, Switzerland, on the 6th," adding that the US has prepared its own alternative.

This alternative involves the United States and some WTO member countries agreeing not to impose tariffs on electronic transmissions.

A senior diplomat told Reuters that "if there is no change in position at the WTO General Council, the United States plans to push for a multilateral agreement with the support of countries including South Korea, Japan, Australia, and New Zealand."

Reuters reported that it was not immediately confirmed how many WTO member countries would participate in the US's digital duty-free proposal.

The e-commerce moratorium, also known as digital duty-free (a measure to suspend tariff imposition), was first adopted at a WTO ministerial meeting in 1998 and has been regularly renewed since. This measure prohibits the imposition of tariffs on cross-border electronic transmissions such as music or movie streaming and software downloads.

However, the extension of the moratorium failed at the WTO Ministerial Conference held in Cameroon at the end of March. The existing moratorium was valid until March 31st, but negotiations to extend it collapsed, causing the multilateral international trade mechanism of digital duty-free to lose its effect.

For South Korea, digital duty-free is a noteworthy international trade issue given that its exports primarily consist of digital content such as webtoons and games.

Previously, the Office of the United States Trade Representative (USTR) criticized that 164 WTO member countries had agreed to extend the e-commerce tariff moratorium until the end of 2030, but Brazil and Turkey blocked it, and the US agenda for WTO reform also made no progress.