The World Trade Organization’s (WTO) 14th Ministerial Conference (MC14), held in Yaoundé, Cameroon last week, concluded in the early hours of March 30 without reaching agreement on the renewal of the moratorium on duties on electronic transmission, a work plan on WTO reform, or any other issue.
“MC14 has ended not with a deal but with a walkout,” said Fernando Hernandez, head of trade and investment policy at environmental organization Both Ends. “The United States could not secure a long enough tax holiday for Big Tech, so it blocked agreement on everything else.”
One key issue was the renewal of the “e-commerce moratorium,” a policy that the WTO initially adopted as a temporary measure in 1998 which prevents countries from enacting tariffs on things like digital downloads and streaming. Some countries with highly developed digital sectors, like the United States, wanted the measure to be made permanent. Others, like Brazil, wanted to keep it in effect as a temporary measure, while others like India sought to let the moratorium expire. Because no agreement was reached to extend the temporary measure, it expired at the end of MC14, as scheduled.
As a result, WTO members have deferred further consideration of the e-commerce moratorium to a future meeting of the WTO General Council in Geneva. Separately, 66 signatory countries of the joint statement initiative on e-commerce, including Canada, announced they had agreed on a pathway toward implementation somewhat inside and somewhat outside the WTO.
What is the e-commerce agreement?
The proposed Agreement on Electronic Commerce (AEC), which would be a permanent agreement covering the issue and replace the temporary e-commerce moratorium, is a plurilateral agreement among a subset of WTO Members aimed at setting rules on the regulation of e-commerce and digital trade. At the 11th WTO Ministerial Conference in December 2017, a group of 71 WTO members agreed to initiate exploratory work toward future WTO negotiations on trade-related aspects of e-commerce.
In January 2019, 76 members confirmed in a joint statement their intention to commence these negotiations. As of today, 91 WTO members are participating in these discussions, accounting for over 90 per cent of global trade. In July 2024, the group reached a stabilized agreement that they had hoped to incorporate into the WTO as an official plurilateral, to which new members could accede in the future.
On February 6, 2025, a group of member states, including Canada, made a proposal to incorporate the AEC under Annex 4 of the Marrakesh Agreement establishing the WTO. Such incorporation would require consensus among WTO Members. If adopted, the AEC would apply only to its signatories and would not create obligations or rights for non-participating Members.
This incorporation is legally significant because binding force within the WTO system is closely linked to access to dispute settlement. Article 27 of the AEC provides that the WTO’s Dispute Settlement Understanding (DSU) shall apply to disputes arising under the agreement. However, the DSU can only apply if the agreement is formally included in Annex 1 (multilateral agreements) or Annex 4 (plurilateral agreements) of the WTO framework.
The attempt to incorporate the AEC failed due to differences of opinion about the e-commerce duty moratorium (as well as other internal divisions). Instead, several e-commerce agreement signatories, including Canada, announced on March 28 they would try to bring the agreement into force through interim arrangements, while continuing efforts toward its incorporation into the WTO legal framework.
Status of the e-commerce agreement and duty moratorium
E-commerce first entered the WTO agenda at the 2nd Ministerial Conference in Geneva in May 1998. Later that year, the WTO General Council established the Work Programme on E-Commerce (WPEC) to examine trade-related aspects of global e-commerce. The WPEC defines e-commerce as “the production, distribution, marketing, sale, or delivery of goods and services by electronic means.” A key feature of this framework is the moratorium on customs duties on electronic transmissions.
At MC14, negotiations over the moratorium were closely tied to broader political and economic trade-offs. Brazil, for example, demanded progress in the agriculture negotiations in exchange for its support for the moratorium. Earlier draft texts on agriculture had stalled due to objections from the United States and cotton-exporting African countries, and negotiations in that area remain inactive.
Similarly, India entered MC14 opposing a renewal of the e-commerce moratorium but softened its stance on March 27, indicating it would not block a two-year extension if WTO members agreed not to incorporate the plurilateral Investment Facilitation for Development Agreement into the WTO framework, alongside other potential concessions on agriculture and institutional reform.
The moratorium, which has been renewed at every WTO Ministerial Conference since 1998, has now lapsed. Meanwhile, a pathway toward implementing the plurilateral e-commerce agreement has advanced, although six countries—Paraguay, Saudi Arabia, Kenya, Myanmar, Albania, and Chile—did not endorse it at MC14.
In his closing remarks, MC14 Chair and Cameroonian Trade Minister Luc Magloire Atangana Mbarga stated that a draft facilitator’s text on the moratorium and the WPEC would be forwarded to Geneva as part of the “Yaoundé Package.” The draft text proposed extending the moratorium for five years, with a review after four years. While most members supported the proposal, Brazil and Turkey opposed it. It is not clear whether this proposal will be adopted at the next General Council meeting.
More broadly, the negotiations reflect a recurring pattern in WTO practice: members often use issue linkage and bargaining strategies to maximize gains across different negotiating areas. Moving the talks to Geneva is challenging because ambassadors there do not necessarily have the same political will to take decisions as higher-level officials at ministerials, WTO Director-General Ngozi Okonjo-Iweala noted. In this context, the renewal of the multilateral e-commerce moratorium is likely to remain politically contested and difficult to achieve.
The controversial definition of e-commerce
While the multilateral moratorium is suspended temporarily, the moratorium in the AEC—the plurilateral e-commerce agreement to which Canada is a party—is effectively permanent. The countries involved have agreed to never impose customs duties on electronic transmissions under Article 11.3 of the AEC, creating a distinction between tangible and intangible goods that is not as self-explanatory as agreement proponents seem to think.
Although Article 11.5 of the AEC includes a review clause, the requirement for consensus among the Parties to adopt an amendment under Article 32 makes any amendment unlikely, thereby reinforcing the view that the AEC moratorium will, in practice, be permanent.
Article 11.1 of the AEC defines “electronic transmission” as a transmission made using any electromagnetic means and includes the content of the transmission. The definition is notably vague and ambiguous. It is unclear whether it applies only to the transmission of data (i.e., the flow of bits and bytes, implicating telecommunications and networking services), or whether it also covers “digitalizable goods”—such as books, music, video games, and films—that can exist in physical form but may also be delivered digitally.
A broader interpretation could extend the moratorium on duties on electronic transmissions to encompass all digital goods and services transmitted electronically. This could erode fiscal sovereignty and constrain the policy space of developing countries, as customs duties account for a significant share of total tax revenue in many low- and middle-income economies. This ambiguity remains central to ongoing international debates.
On the first day of MC14, U.S. Trade Representative Jamieson Greer and Indian Commerce and Industry Minister Piyush Goyal set the stage for a clash over whether the WTO will continue to ban tariffs on electronic transmissions. Goyal specifically questioned whether the moratorium covers electronic content. The U.S. and others contend that it does, while India says it does not.
In the absence of a clear and agreed definition of “electronic transmissions,” and unless the concept of “digitalizable goods” is explicitly incorporated into the WTO’s e-commerce moratorium text, the current framework leaves considerable room for expansive interpretation. As a result, countries that commit to the moratorium may, in effect, be relinquishing their ability to impose border measures on a wide range of digital products and services, including emerging and increasingly pervasive technologies such as artificial intelligence.
The road ahead
The future of the WTO e-commerce agreement remains uncertain, and its legal status is highly contentious, particularly in the absence of an effective dispute settlement mechanism. Article 27 of the AEC provides that the WTO’s dispute settlement process shall apply to disputes arising under the agreement. However, for that to happen under WTO rules, the agreement must be incorporated into either Annex 1 (multilateral agreements) or Annex 4 (plurilateral agreements) of the WTO framework.
Although the AEC will enter into force for signatory member countries that accept it once 45 instruments of acceptance have been deposited, it has not been formally incorporated into the WTO Agreement. As a result, the dispute settlement process is unlikely to apply, leaving significant uncertainty as to how disputes under the AEC will be resolved in the near term with the “interim dispute settlement” and “appeal arbitration procedures” undefined yet.
At the same time, geopolitical dynamics are shaping the trajectory of the e-commerce moratorium. The Trump administration has pressed countries to support the moratorium as part of a series of opaque trade arrangements negotiated under the threat of high tariffs. Several countries—including Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, and Malaysia—have, through “Agreements on Reciprocal Trade,” committed to supporting a permanent moratorium at the WTO.
Similar provisions appear in ongoing framework negotiations with Ecuador, the European Union, Indonesia, Korea, Thailand, and Switzerland. This development is particularly notable in the case of Indonesia, which has historically opposed the moratorium on e-commerce duties and is currently the only country requiring the reporting of digital imports—an approach some view as a preliminary step toward imposing customs duties.
“If the WTO cannot achieve this commonsense aim, the United States will work outside of the WTO with all interested partners to get it done, U.S. Trade Representative Jamieson Greer said on Monday, adding, “To that end, the United States invites all trading partners to commit to a plurilateral, e-commerce moratorium agreement.”
Given that approximately 60 per cent of global GDP is now linked to digital transactions—and that this share is expected to continue growing—supporters often present the AEC as a mechanism to enhance stability and predictability for businesses and consumers, while expanding opportunities for micro, small, and medium-sized enterprises by reducing regulatory barriers and improving access to global markets. It is also argued that the AEC promotes inclusive growth by offering developing countries and least-developed countries flexible implementation periods, technical assistance, and support through capacity-building initiatives.
Nevertheless, concerns about the digital divide must remain central to any legal integration of e-commerce rules, particularly in relation to the moratorium. Without adequate safeguards and meaningful differential treatment for lower income and developing countries, current approaches risk exacerbating structural inequalities rather than alleviating them.
