YAOUNDE, March 28 (Reuters) - The e-commerce moratorium

is a global agreement among World Trade Organization members

which bans customs duties being applied to electronic

transmissions such as digital downloads and streaming.

The policy was first adopted in 1998 at the WTO's Second

Ministerial Conference in Geneva as part of a declaration to

encourage early digital trade growth.

It covers cross-border transmissions such as software

downloads, e-books, music and movie streaming and video games.

Originally intended to be temporary, the tariff moratorium

has been renewed roughly every two years at each WTO ministerial

conference, and was most recently extended for two years at the

13th conference in 2024.

It is set to expire this month at the 14th WTO ministerial

conference in Yaounde, Cameroon.

ARGUMENTS FOR EXTENSION

WTO members with large digital economies such as the U.S.,

the EU, Canada and Japan want the moratorium permanently

extended because they say it ensures predictability for global

digital trade.

The ⁠U.S. wants ​major American tech businesses such as Amazon ( AMZN ),

Microsoft ( MSFT ) and ​Apple to have a stable regulatory environment

without the fear and costs of countries introducing duties that

could impact ​cross-border digital trade.

More than 200 global business organisations signed a joint

statement calling for an extension of the moratorium.

Its lapse would raise costs, fragment the internet and

hinder the ability of businesses to participate in cross-border

digital trade, the International Chamber of Commerce says.

ARGUMENTS AGAINST EXTENSION

Some developing nations, including India which has long opposed

the moratorium, contend its extension would deprive them of

tariff revenue to fund infrastructure and close the digital

divide.

Sofia Scasserra of the Transnational Institute think tank

said the moratorium has failed to bolster digital economies in

developing countries, and instead entrenches dominance by U.S.

and other advanced Big Tech giants.

A United Nations Conference on Trade and Development

(UNCTAD) research paper in 2019 estimated that developing

countries faced a potential tariff revenue loss of $10 billion

in 2017 from the moratorium.

However, an OECD study found the potential revenue loss

could largely be offset by value added tax or goods and services

tax applied to imported digital services.

COUNTRIES' POSITIONS AT THE CAMEROON MEETING

Four formal proposals have been submitted for the e-commerce

moratorium at the Cameroon ministerial conference.

The African, Caribbean and Pacific Group proposes extending

the moratorium until the next ministerial conference. The U.S.

wants a permanent extension.

A group including Switzerland proposes a permanent extension

and establishing a committee on digital trade, and a Brazil plan

proposes extending until the next conference and creating a

digital trade committee.