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Keep cross-border electronic transmissions free to recover together, stronger
The WTO needs to extend its cross-border electronic transmission moratorium to drive equitable post-pandemic recovery.
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The logo of the World Trade Organization, along with its French abbreviation OMC for L'Organisation mondiale du commerce, adorns its Geneva headquarters in Switzerland, as seen on June 2, 2020. (Reuters/Denis Balibouse)
G
lobal trade is at a critical juncture. The conflict in Ukraine has impacted post-pandemic economic recovery, causing serious food and energy insecurity. The ongoing supply chain disruption, as well as the long-term issues of sustainability and digital transformation, also poses serious challenges.
Against this background, the 12th World Trade Organization (WTO) ministerial meeting, to be held next week in Geneva, has a vital role to play in coming up with appropriate responses. Sadly, the WTO looks set for yet another failure.
One defining outcome of the pandemic is rapid adoption of digital technology, including in Indonesia. Going online has been a lifesaver in every sense of the word. Businesses and consumers only coped by going online and turning to e-commerce. Education, health, communication and entertainment services went online. Other online services such as digital communications and e-payments kept our economy going, sustaining supply chains for all essential goods and services.
However, this development can be easily disrupted by sentiments related to cross-border data transmission currently being discussed at the WTO. Since 1998, WTO members have agreed to put a moratorium on customs duties on electronic transmissions, which has allowed digital content to be transmitted across borders without duties.
The moratorium has been a positive force for good in enabling the digital transformation, by reducing business costs, including for all developing countries and especially for start-ups and micro, small and medium enterprises (MSMEs). During the pandemic, the WTO moratorium was vital to keeping the online ecosystem available and affordable. In post-pandemic recovery, the WTO moratorium is vital to digital innovation, productivity and export competitiveness.
The ingredient fundamental to the success of the upcoming WTO ministerial conference is an extension of the moratorium. Failing to extend the moratorium would mean the reimposition of tariffs on all kinds of services that can be delivered digitally, leading to price increases. Hiking the price of online services during a period of surging global inflation would constitute a major setback to efforts to make the internet more accessible and to promote inclusive development.
Many economic researches make it clear that having greater access to the internet makes countries more economically competitive. This will help businesses of all sizes by letting them tap into online marketing, financing and logistics applications as well as cloud storage, and makes it easier for them to become exporters. The cost advantages of such tools are even greater for smaller firms.
