Devil in detail in negotiations on e-commerce

Date: 16/09/1999

By Peter Chapman

Electronic commerce is set to be one of the first topics on the agenda when the trade talks get underway.

The world's major trade blocs, including the US and EU, have already signalled their desire to ensure online business is not hamstrung by new tariffs.

US Trade Representative Charlene Barshefsky has said the US will call for swift agreement to ensure a "moratorium on tariffs applied to electronic transmissions" - echoing similar Union demands.

But experts are predicting a long debate over how goods and services such as newspapers and video delivered online instead of physically should be classified in the new e-commerce regime.

The EU wants such goods and services delivered online to come under the GATS framework covering services, while the US favours classifying some products delivered over the net to be "downloaded" as "virtual goods" - therefore covered by the broader GATT deal.

EU sources assert Washington's approach is aimed at preventing the Union from extending its current right to protect its audio-visual sector for cultural reasons to the Internet.

Officials say efforts are already being made at WTO headquarters in Geneva to resolve the classification issue as part of the body's electronic commerce 'work programme', ahead of formal negotiations.

The inclusion of e-commerce in the Millennium Round has been welcomed by the business world. The EU Committee of the American Chamber of Commerce said the WTO was the "most effective body to ensure that electronic commerce was as free as possible".

In a report preceding the Seattle talks to be held in November, it urged the WTO and national governments to "refrain from introducing new tariffs on Internet and electronic transmissions which may erect trade barriers and hinder liberalisation".

Electronic commerce is set to be one of the first topics on the agenda when the WTO trade talks get underway. Article forms part of a survey on world trade, p13-20.