AAFA joins global plea to extend WTO digital moratorium into 2024

The moratorium, a pivotal agreement nearly as old as the WTO itself, has been instrumental in allowing the digital economy to flourish. It has facilitated the cross-border exchange of knowledge and digital tools, significantly contributing to raising global living standards, expanding education, and sustaining economies through unprecedented digital transformation.

AAFA highlights the moratorium's particular benefits to supply chain resilience across manufacturing industries, which depend on the uninterrupted flow of digital data. Furthermore, the moratorium's expiration threatens micro, small, and medium-sized enterprises (MSMEs) the most, as it would disrupt their access to vital digital resources, potentially leading to increased digital fragmentation and reduced global market opportunities.

International bodies such as the United Nations, World Bank, OECD, and others have detailed the extensive benefits of the moratorium. Ending it could result in increased customs restrictions, harming MSMEs and the global supply chain, and potentially leading to greater GDP losses due to retaliatory duties. The OECD has noted that tariffs on electronic transmissions would disproportionately affect low-income countries and smaller, women-owned firms.

At a time when the G20 has endorsed the OECD Inclusive Framework’s Solution to address tax challenges from digitalisation, the AAFA and its co-signatories argue that abandoning the Moratorium would be counterproductive. They highlight the G7 Digital Trade Principles, which support freedom from customs duties on electronic transmissions in accordance with the WTO Moratorium.

In their unified appeal, the AAFA and global industry associations urge WTO members to demonstrate leadership by supporting the continuation of the moratorium, thereby ensuring the ongoing growth of the digital economy and upholding the integrity of global trade relations.

Fibre2Fashion News Desk (DP)