WTO

WTO faces crucial test amid Trump’s tariff gambit

The World Trade Organization (WTO) recently marked its 30th anniversary in a subdued ceremony, overshadowed by a growing threat to the global trade system – Donald Trump’s tariff policies. The US president’s plan to impose ‘reciprocal’ tariffs has unsettled global markets, causing the WTO to warn that international trade could shrink significantly.

Economists fear that Trump’s preference for bilateral deals over multilateral cooperation risks dismantling the rules-based system the WTO was designed to protect. WTO Director General Ngozi Okonjo-Iweala has called the situation an opportunity to reform and modernise the organisation, emphasising the urgent need to strengthen global trade rules.

While some countries are tempted to negotiate directly with Trump to shield their economies, experts like Dartmouth’s Robert Staiger stress that coordinated, multilateral action is the only way to preserve the integrity of the global trading framework. Past failures like the Doha Round haunt such efforts, but today’s crisis might spur the collective will needed for serious reform.

Inside the WTO, countries are exploring responses, from informal consultations to calls for emergency meetings. Meanwhile, China has seized the moment to bolster its standing as a defender of multilateralism, rallying other nations and filing formal complaints against US tariffs.

However, divisions persist, with some countries already negotiating separately with the US, undermining hopes for a unified front. The uncertainty surrounding America’s future in the WTO continues to loom large.

Though US funding is frozen and debates about membership persist, the appointment of a new US representative suggests Washington isn’t abandoning the body just yet. As Trump’s tactics force tough choices on the global community, experts warn that capitulating to bilateralism could permanently wreck the multilateral system – a risk the world can scarcely afford to take.

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WTO: How e-commerce can bridge the digital divide

WTO’s discussion on e-commerce and development highlighted the following activities for overcoming digital divides: investment in digital infrastructure, capacity building for new skills, and updating outdated legislation.

In addition, modern payment systems are critical for enabling seamless e-commerce transactions and participation in the digital marketplace.

National initiatives were shared as part of efforts to close the digital divide. These include support for regional digital economy studies, developing online systems to reduce business operation costs, and promoting inclusive digital ecosystems.

Programmes were noted to improve internet access in underserved regions, secure internet usage, digital literacy, and skills development—especially for women and vulnerable groups.

Ambassador Richard Brown of Jamaica emphasised that while digital infrastructure access is necessary, it must be complemented by robust legal and regulatory frameworks addressing consumer protection, privacy, data protection, and cybersecurity to establish trust in digital transactions.

On an international level, WTO can contribute through the Information Technology Agreement and the e-commerce moratorium.

Other organisations, including the OECD, International Trade Centre, and International Telecommunication Union, can play an important role.

UNCTAD’s work on e-commerce and the digital economy is critical for overcoming digital divides and fostering inclusive e-commerce.


EU files WTO complaint against China’s patent practices

The European Commission has filed a complaint with the World Trade Organization (WTO) against China, accusing the country of ‘unfair and illegal’ practices regarding worldwide royalty rates for European standard essential patents (SEPs). According to the Commission, China has empowered its courts to set global royalty rates for the EU companies, particularly in the telecoms sector, without the consent of the patent holders.

The case focuses on SEPs, which are crucial for technologies like 5G, used in mobile phones. European companies such as Nokia and Ericsson hold many of these patents. The Commission claims that China’s actions force European companies to reduce their royalty rates globally, providing Chinese manufacturers with unfairly low access to European technologies.

The European Union has requested consultations with China, marking the first step in WTO dispute resolution. If a resolution is not reached within 60 days, the EU can request the formation of an adjudicating panel, which typically takes about a year to issue a final report. This case is linked to a previous EU dispute at the WTO concerning China’s anti-suit injunctions, which restrict telecom patent holders’ ability to enforce intellectual property rights in courts outside China.

WTO members agree on digital trade rules, US holds back

Around 80 countries have agreed on global digital commerce rules, including recognising e-signatures and protections against online fraud. Despite five years of negotiations led by Australia, Japan, and Singapore, the United States did not endorse the final text, citing the need for further work on essential security interests.

The European Union hailed the agreement as ‘historic,’ while Britain called it ‘groundbreaking.’ The agreement commits participants to digitalising customs documents and processes, recognising e-documents and e-signatures, and implementing legal safeguards against online fraud and misleading product claims. It also addresses limiting spam, protecting personal data, and supporting least developed countries.

Although 91 of the World Trade Organization’s 166 members, including China, Canada, and Saudi Arabia, participated in the negotiations, the US and other countries like Brazil, Indonesia, and Turkey expressed reservations. Making the accord a formal WTO agreement may be challenging due to the need for consensus, with India and South Africa particularly critical of deals excluding certain members.

WTO Joint Initiative on e-commerce close to finalising negotiations

The co-conveners of the Joint Initiative (JI) on e-commerce – Australia, Japan and Singapore – have published a stabilised text of an “Agreement on Electronic Commerce“. The publication represents a significant milestone, and comes after almost seven years of discussions and negotiations.


The text proposes rules on a range of substantive issues, including:

  • Openness and electronic commerce, which includes commitments on customs duties on electronic transmissions; open government data; and access to and use of the internet for electronic commerce.
  • Trust and electronic commerce, which covers online consumer protection;
    unsolicited commercial electronic messages (spam); personal data protection; and cybersecurity.
  • Telecommunications, which presents a revised version of the Telecommunications Reference Paper
  • Cross-cutting topics related to transparency, cooperation, and development.
  • Exceptions, including for security, prudential reasons, data protection, and preferences for indigenous peoples.

The current draft text has been published by the co-conveners on behalf of 82 out of 91 JI members. Some countries, notably Brazil, Colombia, El Salvador, Guatemala, Indonesia, Paraguay, Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Türkiye and United States are still undertaking domestic consultations on the text.  

Why this is important

The regulation of e-commerce and digital trade has taken place so far within preferential trade agreements (PTAs), celebrated bilaterally or plurilateraly among countries. Nevertheless, there is no specific agreeemnt on this issue in the context of the WTO.

An e-commerce agreement would be an important step towards promoting global harmonisation of norms. Although the participation of LDCs and of some regions, such as the Caribbean, is still limited, the JI counts on the participation of a significant number of WTO members, which account for approximately 90% of global trade. While topics under ‘enabling electronic commerce’ carry special importance to development, consumer protection and privacy help to put individuals at the center of the digital economy.

In addition, the text of the “Agreement on Electronic Commerce” enshrines a commitment not to impose customs duties on electronic transmissions (to be reassessed after five years). Currently, a moratorium on customs duties on electronic transmissions is in place among all WTO members, exempting  digital products, such as online films, music, and software from tariffs (customs duties) as they cross borders. Nevertheless, this WTO-wide moratorium is likely to expire at the next WTO Ministerial Meeting. The inclusion of a moratorium in the e-commerce agreement means that the status quo – the non-application of custom duties – would continue to be the rule among most WTO members, regarless of the expiration of the wider moratorium.

Finally, the agreement also presents extensive provisions aiming to cater to the specific needs of developing countries and LDCs. Nevertheless, there are doubts with regards to whether these provisions would be fit for purpose, since most of them are formulated in a ‘best effort’ language, and they do not follow the model of the Trade Facilitation Agreement (TFA), which links implementation with the existing capacity, and with “mandatory” technical assistance.  

What is missing

The JI officially began negotiations with an ambitious agenda, which included enabling issues, customs duties and market access, as well as a wide range of digital policy issues, such as data flows, localisation, access to the source code, and cybersecurity.  

Negotiations on some of the most ‘digital’ issues, such as data flows and source code, halted when the United States decided to withdraw its support for these areas in order to preserve domestic policy space. Although data flows are the lifeblood of the digital economy, it seems unlikely that rules on this issue will be harmonised on a multilateral basis anytime soon. The co-conveners simply state that “participants recognise that some issues of importance to digital trade have not been addressed in this text. Participants will discuss the inclusion of these issues in future negotiations”.

The mechanism to include a future agreement on e-commerce in the WTO legal architecture is also an open issue.  The members of another Joint Initiative on Investment Facilitation for Development (IFD) have not managed to secure the inclusion of the agreed text under Article 4 of the Marrakesh Agreement, which deal with WTO Plurilateral Agreements. Such an inclusion requires a hard-to-achieve consensus among WTO Members, given the explicit opposition by some countries. This raises questions on the path forward towards the incorporation of the outcomes of other JIs, including on e-commerce. 

The negotiations at WTO JI will continue pending endorsement by several countries. According to the United States, “the current text falls short and more work is needed, including with respect to the essential security exception”.

Is this a last renewal of the WTO e-commerce Moratorium?

On 1 March, during the extra day of negotiations, WTO Members gathered in Abu Dhabi for the 13th Ministerial Conference agreed to extend the current Moratorium on Customs Duties on Electronic Transmissions until the next ministerial meeting, or until 31 March 2026, whichever is earlier. In spite of that, this could be the beginning of the end of the Moratorium: this is likely to be the last renewal.

A new blog-post from Digital Watch Observatory expert Marilia Maciel, in which she explains the dynamics and the outcomes of the 13th World Trade Organization (WTO) Ministerial Conference (MC13) held from 26-29 February, 2024 in Abu Dhabi, United Arab Emirates

The negotiating positions on the Moratorium ranged from, on the one hand, OECD countries, some developing countries, and China, aiming to make the Moratorium permanent and, on the other hand, some developing countries led by India, Indonesia, South Africa and Indonesia requesting the end of the Moratorium.

In 2022, an extension was granted until MC13, but fears of another postponement of the Ministerial led Members to call for an explicit renewal by Ministers or by the WTO General Council if the Ministerial got delayed beyond 31 March 2024. This would prevent the Moratorium from sliding into permanence, revealing that the idea of non-renewal was by that time strongly held by some members.

WTO Joint Initiative on e-commerce aims to deliver agreement in 2024

The WTO Joint Initiative (JI) on e-commerce held its first round of negotiations of the year from 29 January to 2 February. Participating members expressed their willingness to work on the ‘chairs’ text’ circulated by the co-convenors in mid-January.

The text was produced by JI co-convenors, reflecting their perception on where consensus lies, and is seen as a major milestone towards a future e-commerce agreement. Co-convenors expressed optimism that an agreement could be reached in the next few months.

Nevertheless, discussions are still ongoing on some important topics, such as development issues, e-payments, cryptography, and on so-called ‘horizontal issues’, which are overarching provisions in the agreement. The next meeting is scheduled for 11-14 March, and it will take place after the 13th WTO Ministerial Meeting.

Source: WTO.

US withdraws digital trade demands in WTO talks

The US Trade Representative Katherine Tai has withdrawn longstanding US digital trade demands in World Trade Organization (WTO) talks, allowing the US Congress the space to regulate big tech firms, according to her office. United States administration’s 2019 proposals insisting on WTO e-commerce rules that promote free cross-border data flows and prohibit national requirements for data localization and software source code reviews have been revoked. Decision was made during a meeting of the WTO’s Joint Statement Initiative on E-Commerce in Geneva.

Senator Ron Wyden, who chairs the Senate Finance Committee, described the move as a “win for China,” claiming that it would strengthen China’s internet censorship and government surveillance model. On the other hand, some lawmakers, including Senator Elizabeth Warren, praised the withdrawal, as it rejects efforts by big tech lobbyists to exploit trade deals to undermine regulation.

The decision aligns with the current administration’s goal of strengthening regulation of large technology firms and reflects ongoing digital trade negotiations in the U.S.-led Indo-Pacific Economic Framework for Prosperity (IPEF) group. However, concerns have been raised about potential disadvantages for U.S. firms and the impact on international digital trade relationships. The U.S. Chamber of Commerce opposes the withdrawal, arguing that the digital trade principles, included in the 2020 U.S.-Mexico-Canada Agreement, have supported the success of U.S. tech firms globally. The U.S. remains an active participant in the WTO e-commerce talks.

Negotiations on e-commerce advance aiming at new consolidated text by end of 2022

From 25-28 October the participants of the Joint Initiative on e-commerce (JSI) held a series of meetings aiming to speed up progress in the negotiations. The co-conveners of the Initative – Australia, Japan and Singapore – affirmed that negotiations reached a critical moment and urged participants to “find a good landing zone for the articles of existing small groups”.  A new ‘consolidated document’ – working documents that capture the progress made in the negotiations and serve as the basis for further work – is expected to be published by the end of 2022. Negotiations are currently taking place within small groups. In October, small groups on e-invoicing, cybersecurity, privacy and telecommunications met, and a small group on ‘information and communication technology (ICT) products that use cryptography’ was created.

Mauritius joins the WTO JSI on e-commerce

Mauritius joined the Joint Initiative on e-commerce, bringing the total number of participants to 87. During a cluster of meetings that took place in September, negotiators sought convergence on topics such as cyber security, privacy, telecommunications services, electronic invoicing and electronic transaction frameworks. A stocktaking effort is being put in place in order identify proposals that have not yet attracted universal support in the negotiations. The withdrawal of proposals from single proponents is being encouraged. According to the co-conveners of the Initiative, it is possible to achieve convergence on most issues by the end of 2022, but “this will require members to energize in those areas where no convergence has been reached and pull back where it has become clear there is not enough support”.