i3 - January/February 2020 - 75

ensure that the services and digital
trade continue to expand and fuel economies and employment, we must have
multilateral digital rules and a revitalized WTO to enforce them.

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A Tariff-Free Internet

erode. However, the moratorium has
become a critical part of the global
foundation of the digital economy
and is a great example of how the multilateral system can promote policies
that foster innovation and growth.
Growth in these areas spurs growth in
entire economies. Just as the WTO's
Information Technology Agreement
(ITA), which eliminated tariffs on technology goods, played a fundamental
role in spurring growth and deepening
value chains in developing nations'
services sectors, tariff-free trade in
services promote the adoption of
new technologies.
The possibility of new, arbitrary trade
barriers against the free flow of digital
C TA . t e c h / i 3

It appears the U.S. government is actively
devising a negotiating plan to achieve
extension of the moratorium on customs
duties. Congress and much of the business community have been quiet on the
topic, perhaps preoccupied with responding to the set of retaliatory tariffs imposed
by the Trump Administration. But to
achieve a rapid agreement on keeping the
internet tariff free, negotiations to create
a high standard e-commerce agreement
must intensify and
include more engagement from Capitol
Hill and industry.
Given the ecoINCREASED
nomic impact on the
COSTS AND OTHER
U.S. economy, it is
CONSEQUENCES
important for
Congress, the busiThe expiration of the
ness community
e-commerce moratorium
could significantly increase
and other stake holdcosts for companies that sell
ers to focus on the
services and products over
significance of estabthe internet such as:
lishing permanent
international rules
● Internal management
of fair and non● Dealer coordination
discriminatory treattrade is becoming more
● Customer outreach
ment in the digital
concrete, particularly in
● Fulfilling maintenance
trade sector. WTO
some of these large, influ● Service relationships
negotiators have
ential developing economany new business
mies. For example,
models to consider as
Indonesia has formally
they frame discussions towards the next
added five new six-digit 9901 tariff catestage goal of a larger, more encompassing
gories to its tariff schedule for "software
digital and e-commerce trade agreement.
and other digital products transmitted
The coming six months will be an
electronically." This change will enable the
important time for the tech sector to
country to legally introduce tariffs of any
level on these products (or transmissions) pay attention to debates and decisions in
the WTO.
should the existing moratorium expire.
With global cross border data flows
reaching $2.8 trillion in 2014, the
A former Chairman of the U.S.
stakes are high. A new generation of
International Trade Commission,
digital trade barriers threatens to be
Meredith Broadbent can be reached at
disruptive and costly in the future. To
MeredithMBroadbent@gmail.com.
JANUARY/FEBRUARY 2020

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i3 - January/February 2020

Table of Contents for the Digital Edition of i3 - January/February 2020
