WTO (World Trade Organization) member states should include cryptocurrency issues during negotiations on an agreement on the e-commerce sector, think tank GTRI said on Monday.
As the crypto market gains increasing global attention, its classification within the WTO e-commerce framework remains ambiguous, according to the Global Trade Research Initiative (GTRI).
It added that the debate should revolve around whether cryptocurrency exchanges fall under ‘electronic transmissions’ within the scope of e-commerce.
“With the multifaceted dynamics of the e-commerce landscape, the outcomes of the ongoing WTO negotiations have significant implications for global digital trade.
“The inclusion or exclusion of cryptocurrencies and the diverse positions of influential countries will shape the future of international e-commerce policy,” said GTRI co-founder Ajay Srivastava.
Currently, WTO members are conducting bipartisan negotiations on e-commerce (Joint Initiative and Moratorium on E-commerce), but cryptocurrency is not part of any of the talks so far.
Under a joint e-commerce initiative, 89 WTO members are deliberating on topics such as tariffs, customs clearance, paperless trade, online privacy and cybersecurity.
However, the negotiations hit a significant hurdle when the US, a major player in the global digital space, announced on October 25 its withdrawal from several points discussed. This step could lead to a global reappraisal of e-commerce policy.
Interestingly, India, which foresees challenges associated with unregulated digital trade, has remained absent from these talks, a decision seemingly confirmed by the US withdrawal, he said.
This moratorium, introduced in 1998, restricts countries from applying customs duties to electronic transmissions. It was last extended for two years in June 2022.
India opposes the continuation of the moratorium on e-commerce, arguing that the moratorium has a negative impact on developing countries and that they should maintain policy space for their digital progress, regulate imports and generate revenue through customs duties .
India, along with South Africa, has commented on the negative impact of the moratorium on developing countries. Other developing countries, such as Sri Lanka and Indonesia, have supported this position.
The United Nations Conference on Trade and Development has estimated the potential loss of tariff revenue for developing countries each year due to the moratorium on e-transmissions at $10 billion, compared to just $289 million for high-income countries, according to the GTRI .
It added that the rise of cryptocurrency, a digital currency that operates outside central banks, has complicated these discussions.
“Globally, cryptocurrency adoption is witnessing an upward trend. For example, India has imposed an increased capital gains tax on crypto income,” it said, adding that “WTO members should prioritize discussions on crypto and its potential links to ongoing e-commerce. -trade negotiations before members start taking freedoms, with interpretation leading to disputes.”
The WTO’s 13th Ministerial Conference (MC13) will take place from February 26 to 29, 2024 in Abu Dhabi. The Ministerial Conference is the highest decision-making body of the Geneva-based organization, which has 164 members.
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