India Opposes E-Transmission at WTO

Why in the News?

Recently, at the 12th ministerial meeting of the World Trade Organization in Geneva, India reiterated its opposition to a proposal to extend the global moratorium on customs duties on electronic transmission.

• The moratorium was extended at the 11th MC in Argentina in 2017 for two years. 

Key Points:

Key Highlight of 12th Ministerial Meeting

1. Curtailing harmful fishing subsidies: The WTO passed a multilateral agreement that would curb ‘harmful’ subsidies on illegal, unreported and unregulated fishing for the next four years, to better protect global fish stocks. 
2. Since 2001, member states have been negotiating the banning of subsidies that promote overfishing.
3. Global Food Security: Members agreed to a binding decision to exempt food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes, from any export restrictions.
4. In light of the global food shortages and rising prices caused by the war between Ukraine and Russia, the group’s members issued a declaration on the importance of trade in global food security and that they would avoid bans on food exports.
5. However, countries would be allowed to restrict food supplies to ensure domestic food security needs.
6. E-commerce transactions: India has asked the WTO to review the extension of the moratorium on custom duties on e-commerce transactions, which include digitally-traded goods and services.
7. All members agreed to continue the long-standing moratorium on custom duties on e-commerce transmissions until the subsequent Ministerial Conference or until March 31, 2024.
8. Covid-19 vaccine production: WTO members agreed to temporarily waive intellectual property patents on Covid-19 vaccines without the consent of the patent holder for 5 years, so that they can more easily manufacture them domestically.

About E-transmission Moratorium:

1. In 1998, the General Council (GC) of the WTO established the Work Programme on E-Commerce (WPEC), with an exploratory and non-negotiating mandate, to comprehensively examine all trade-related issues relating to global e-commerce.
2. WTO members had agreed not to impose customs duty on electronic transmission since 1998 and the moratorium has been periodically extended at the Ministerial Conferences, which is the highest decision-making body of the WTO.
3. The moratorium is on digitizable products like photographic films, cinematographic films, printed matter, music, media, software and video games.
4. The validity of the current extension on the moratorium was up to the 12th ministerial which was held in June 2022 in Geneva, Switzerland.

Why is India opposing the extension of the E-transmission Moratorium?

1. India is witnessing an exponential rise in imports of electronic transmissions, mainly of items like movies, music, video games and printed matter, some of which could fall within the scope of the moratorium.
2. Allowing moratorium to lapse is important for developing nations to preserve policy space for their digital advancement.
3. While the profits and revenues of digital players are rising steadily, the ability of governments to check these imports and generate additional tariff revenues is being ‘severely’ limited because of the moratorium on e-commerce.
4. The United Nations Conference on Trade and Development has estimated the potential tariff revenue loss for developing countries every year due to the moratorium on e-transmissions at $10 billion as compared to only $289 million for high-income countries.

About WTO (World Trade Organisation):

1. The World Trade Organization is the only international organization that deals with the rules of trade between countries. 
2. It is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1947.
3. The Uruguay Round (1986-94) of the GATT led to the WTO’s creation. WTO began operations on 1st January 1995.
4. The Agreement Establishing the WTO, commonly known as the “Marrakesh Agreement”, was signed in Marrakesh, Morocco in 1994.
5. Headquarters: Geneva, Switzerland.
6. Members: The WTO has 164 members.
7. India is a founder member of the 1947 GATT and its successor, the WTO.
8. Objective: The overall objective of the WTO is to help its members use trade as a means to raise living standards, create jobs and improve people’s lives.

Governing Structure

Ministerial Conference(MC):

1. The Ministerial Conference is the WTO’s top decision-making body and usually meets every two years. 
2. All members of the WTO are involved in the MC and they can take decisions on all matters covered under any multilateral trade agreements.
3. The WTO’s 12th Ministerial Conference was held in Geneva from 12-17 June. 

General Council (GC):

It is composed of all WTO members and is required to report to the Ministerial Conference.

Dispute Settlement Body and Trade Policy Review Body:

General Council convenes in two particular forms:

• Dispute Settlement Body: To oversee the dispute settlement procedures
• Trade Policy Review Body: To conduct regular reviews of the trade policies of individual WTO members