WTO : e-Commerce issue

In news:
  • India has hardened its position at the World Trade Organisation’s (WTO) meeting not only on issues relating to e-commerce, but also against investment facilitation as well as the proposed norms regarding participation of small firms in the global marketplace.
Regarding e-commerce:
  • The issue pertains to a ‘moratorium’ that was included in the 1998 ‘Declaration on Global E-commerce,’ adopted by the WTO member nations in May 1998 at the global trade body’s second Ministerial Conference (MC).
  • According to the WTO, the 1998 declaration on the ‘moratorium’ stated that “member countries will continue their current practice of not imposing customs duties on electronic transmission”. This ‘moratorium’ – which is ‘temporary’ in nature — gets extended at every MC, which is held once in two years.
India’s contention:
  • India has taken a stand that its consent to extension of this ‘moratorium’ depends on the WTO members agreeing to certain conditions.
  • The matter will be subject to the decision of the other WTO members to extend a similar (‘temporary’) moratorium on Non-Violation Complaints (NVC) under the TRIPS (Trade-Related aspects of Intellectual Property rights agreement).
  • NVC refers to a situation where a “government can go to the WTO Dispute Settlement Body even when an agreement (of the WTO) has not been violated (by another country).”
Developed countries requirement:
  • Developed countries are demanding a ‘permanent moratorium’ on imposing customs duties on electronic transmissions.
  • India feels that such a move could reduce the negotiating leverage for developing countries to seek a ‘permanent moratorium’ on NVC.
  • Such a scenario would hurt the generic pharmaceuticals industry in the world, including in India.
  • However, for the time being, WTO members have agreed not to use NVC, and this ‘temporary moratorium’ (agreement not to use NVC) keeps getting extended, like the one on electronic transmissions.

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