GENEVA – Following failed negotiations at the World Trade Organization, the United States has joined 18 other nations in creating their own agreement to prevent taxes on digital commerce, according to documents released Thursday.
The new partnership includes major economies such as Japan, South Korea, Singapore, Australia, Norway, and Argentina. The agreement takes effect May 8 and commits these countries to refrain from imposing duties on electronic transmissions for an indefinite timeframe.
The development follows Brazil’s opposition to extending a worldwide moratorium that has been in place since 1998. This global agreement has been consistently renewed over the years and prohibits countries from taxing cross-border digital services including music streaming, movie downloads, and software purchases.
The collapse of renewal talks during a high-level WTO gathering in Yaounde, Cameroon this past March represents another blow to the organization’s influence in establishing international trade standards.
Nations with significant digital economies, particularly the United States, European Union, Canada, and Japan, have advocated for making the moratorium permanent. They contend it offers stability for international digital commerce.
The newly formed coalition expressed regret over the breakdown of the broader multilateral agreement in their official statement.
“Nonetheless, this group of Members remains committed to do what we can to provide to businesses and consumers a measure of predictability and certainty in the absence of the multilateral E-Commerce Moratorium,” the May 7 document stated.
The agreement remains open for additional WTO members to participate, according to the final text.
