WTO talks end in deadlock after Brazil blocks deal
World Trade Organization talks are deadlocked after Brazil blocked a proposal by the United States and other countries to extend a tariff moratorium on electronic transmissions such as digital downloads.
Talks at the WTO meeting in Cameroon sought to resolve differences over the extension of the e-commerce moratorium and agree on a broader reform plan in the organization.
Ministers there are trying to extend the moratorium, which is set to expire this month, by four years plus an additional buffer year to 2031, diplomats said.
WTO conference president Luc Magloire Mbarga Atangana said talks would continue in Geneva following the impasse over extending the moratorium.
British Trade and Trade Minister Peter Kyle said the failure to reach a deal was a “major disruption to global trade”.
“This is not the outcome we wanted. The UK has worked hard to deliver the change the WTO needs and failing to make a collective decision this week is a major disruption to global trade,” Kyle said in a statement.
In what is seen as a test of the WTO’s validity, after a year of trade turmoil and major disruptions from the Iran war, diplomats said ministers were stuck with extending the moratorium for more than two years after objections from Brazil.
Diplomats were working throughout Sunday to draft a four-year extension proposal with a one-year extension ending in 2031 to bridge gaps between Brazil, which initially wanted a two-year extension, and the United States, which wants a permanent extension.
Brazil later proposed a four-year extension with a review clause at the halfway point, but this was not supported, two diplomats told Reuters.
A US official said Brazil opposed a “near-consensus document”.
A US official said, “This is not a US-Brazil fight. It is a Brazil and Türkiye-164 member issue.”
“The US wanted the sky,” a Brazilian diplomat told Reuters, adding that Brazil wanted to be cautious about renewing the moratorium for two years, as it had in previous ministerial conferences.
“In four or five years, no one will be able to predict what e-commerce will be about, and this will affect the policies of many countries,” they added.
Another diplomat said US Trade Representative Jamieson Greer had “disturbed” delegates by suggesting there would be “consequences” if the US did not extend the moratorium long-term.
Business leaders say the extension is vital to ensure predictability, fearing taxes could be imposed otherwise. It is also seen as key to securing US support for the WTO.
Three diplomats said that after initial resistance from some WTO members, agreement was close to being reached on a new draft of the reform road map that provides a timeline for progress and lays out key issues that need to be addressed.
These include improving decision-making in a consensus-based system, long hindered by a few countries, and trade benefits to developing countries.
The WTO conference chair said a declaration on reform would be sent to Geneva for further discussion.
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