US and Allies Guarantee Tax-Free Streaming and Software Downloads

Nineteen countries, including the United States, have announced an agreement to not impose duties on cross-border electronic transmissions such as streaming music or films and software downloads among themselves, Reuters reported Thursday (May 7).

They also invited other countries to join the pact.

The announcement of this agreement by the countries, which are members of the World Trade Organization (WTO), came as the WTO has so far failed to renew a moratorium on these duties that was begun in 1998 and renewed several times since then, according to the report.

The WTO failed to renew the moratorium at a high-level meeting in Cameroon in March, and Brazil continued to oppose it at the organization’s talks in Geneva that ended Thursday. Turkey, which had joined Brazil in blocking a four-year extension of the moratorium at the meeting in Cameroon, has since dropped its opposition, per the report.

In a joint statement on the moratorium, the 19 countries that signed the agreement said they were disappointed that the earlier moratorium came to an end at the WTO meeting in Cameroon, that they remain committed to trying to provide businesses and consumers with some predictability and certainty in the absence of a larger moratorium, and that they will continue to not impose duties on electronic transmission among themselves.

“We encourage all WTO members who seek the benefits of trading under these stable conditions to join this commitment at any time with the aim of eventually securing a multilateral commitment, building upon that which had been consistently agreed upon by all Members since 1998,” the joint statement said.

Together with the U.S., signers of the joint statement include Argentina; Australia; Costa Rica; Ecuador; Guatemala; Iceland; Israel; Japan; Republic of Korea; Mexico; New Zealand; Norway; Panama; Paraguay; Singapore; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; and Uruguay.

The International Chamber of Commerce said in a Thursday press release that the organization welcomes the joint statement but believes the agreement is not a substitute for a clear WTO-wide one.

“The global economy does not need another self-inflicted shock,” the organization said. “Keeping digital trade open, predictable and tariff-free is one of the simplest things governments can do right now to support growth, private investment and the development of [small and medium-sized businesses].”