Biden Administration Should Work to Extend WTO Digital Moratorium

Since 1998, members of the World Trade Organization (WTO) have agreed to not impose customs duties on digital transmissions. This moratorium on digital tariffs facilitated the creation and growth of the global digital economy. The issue is back in the trade-news headlines as it is addressed at this week’s WTO Ministerial Conference.

Last October, U.S. Trade Representative Katherine Tai announced the Biden administration was backing away from longstanding U.S. support for digital services trade. Her announcement was met with bipartisan criticism from 32 Senators, including Ron Wyden (D-OR), Chairman of the Finance Committee, and Mike Crapo (R-ID), Finance Committee Ranking Member. They wrote: “Retreating from our longstanding principles without offering a viable alternative does not help U.S. workers, it does not help U.S. consumers, it does not help U.S. businesses, and it does not help U.S. allies; it only helps our adversaries.”

Rep. Roger Williams (R-TX), Chairman of the House Small Business Committee, today reiterated these concerns, reminding the Biden administration of the importance of digital trade to U.S. small businesses: “We strongly urge the Administration reconsider this approach especially in light of the important role American small businesses play in the digital economy and urge you to reconsider your decision with meaningful consideration of small businesses.”

Unfortunately, the Biden administration has broadly advocated a return to the law of the jungle in trade policy, allowing foreign countries to restrict U.S. exports for nearly any reason imaginable. This approach runs counter to the interests of Americans across the country who benefit from international trade.

A more reasonable approach would be for the United States to lead efforts to extend the moratorium on e-commerce duties on a long-term basis. Making the moratorium permanent and expanding trade rules to prohibit restrictions on data localization requirements, discriminatory digital services taxes, and similar protectionist measures provide the best way to secure continued growth in digital commerce.