Digital trade- India has suggested that, with regard to cross-border electronic transmissions like content streaming, the World Trade Organization (WTO) establishes explicit definitions of goods and services.
Senior Indian officials, speaking on condition of anonymity, suggested at a meeting of WTO member nations last week that the goal of the proposal is to reach a multilateral agreement to impose import duties on at least the “goods” component of such cross-border trade.
Products and services are now integrated. Next, there is a problem with the definition. For instance, a movie that is being aired on a streaming service like Netflix in India is a product, but the membership that Netflix is charging for the show is a service. Thus, the official continued, “It is very difficult to make that distinction between goods and services.”
None of the major economies impose customs duties on services trade, not even outside the WTO.
With the exponential growth of electronic transmissions, such as social media platforms and the streaming of entertainment content, developing countries like South Africa, Indonesia, and India want the 1998 WTO tax moratorium to be lifted. The moratorium is not indefinite and is renewed at each WTO Ministerial Conference that is convened after a two-year interval.
India will once more oppose the moratorium’s extension at the WTO’s 13th Ministers Conference in February 2024 in Abu Dhabi.
Concerned about the money lost as digital trade expands, some members have voiced their doubts about a longer extension or a permanent moratorium.
The global streaming market is predicted to increase from $174 billion in 2020 to $330 billion by 2025. The market for social media worldwide is predicted to grow from $94 billion in 2020 to $124 billion by 2025.
What is clearly a product and what is a service can be found in computer software or entertainment products kept on hardware such as computer disks. In the case of an entertainment platform that streams content to customers worldwide or a social media platform with a global user base, the WTO members must comprehend the distinction between a product and a service.
In the meantime, the World Trade Organization (WTO) is collaborating with other global institutions such as the World Bank, the International Monetary Fund, the Organization for Economic Cooperation and Development, and the United Nations Conference on Trade and Development to collect data from all relevant parties in order to facilitate the dialogue.
