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Economy May 7, 2026 11:41 AM

Nineteen WTO Members, Including the U.S., Form Pact to Maintain Duty-Free E-Commerce

Group agrees not to levy duties on cross-border electronic transmissions after multilateral moratorium lapsed

By Nina Shah

Nineteen World Trade Organization members, led by the United States and including Japan, South Korea, Singapore and Australia, have agreed among themselves not to impose duties on cross-border electronic transmissions for an unspecified period. The move follows a failure to renew the long-standing multilateral moratorium after objections from Brazil at high-level WTO talks in March.

Nineteen WTO Members, Including the U.S., Form Pact to Maintain Duty-Free E-Commerce

Key Points

  • Nineteen WTO members, including the U.S., Japan, South Korea, Singapore and Australia, agreed among themselves not to impose duties on cross-border electronic transmissions - impact: digital services, streaming and software sectors.
  • The agreement follows a failure to renew the long-standing multilateral moratorium at WTO talks in March after Brazil opposed an extension - impact: global trade policy and regulatory predictability.
  • The new pact will take effect on May 8 and is open for other members to join; the duration of the commitment is unspecified - impact: uncertainty for market participants and trade negotiators.

A coalition of 19 World Trade Organization members, among them the United States, Japan, South Korea, Singapore and Australia, announced on Thursday that they will not impose customs duties on cross-border electronic transmissions for an unspecified period, a document released on May 7 shows.

The ad hoc agreement was framed as a response to the breakdown of a broader effort to extend the WTO's long-standing moratorium on such duties. Delegates from Brazil opposed the renewal at WTO talks, leaving negotiators unable to reach a multilateral settlement earlier this year during a high-level meeting in Yaounde, Cameroon, in March.

The moratorium, originally adopted in 1998 and repeatedly renewed since, prohibits customs duties on electronic transmissions such as streamed music and films and downloaded software. Supporters among WTO members with large digital economies - including the U.S., the European Union, Canada and Japan - have argued that the moratorium delivers predictability for global digital trade and have sought to make it permanent.

According to the text circulated on May 7, 19 participants - listed as including the U.S., Japan, South Korea, Singapore, Australia, Norway and Argentina - agreed "among themselves not to impose duties on electronic transmissions for an unspecified period." The document states the arrangement will take effect on May 8 and registers disappointment at the lapse of the multilateral moratorium.

The document dated May 7 also contained this statement: "Nonetheless, this group of Members remains committed to do what we can to provide to businesses and consumers a measure of predictability and certainty in the absence of the multilateral E-Commerce Moratorium." It further invited other WTO members to join the arrangement.

The compact establishes a like-minded subset of WTO participants maintaining duty-free treatment for cross-border digital flows while the broader membership remains divided. The agreement does not set a defined timeline for how long the members will adhere to their commitment.

Context and immediate facts

  • The multilateral moratorium on customs duties for electronic transmissions first went into effect in 1998 and has been periodically renewed.
  • Negotiations to renew the moratorium failed at a senior-level WTO meeting in Yaounde, Cameroon, in March due to opposition from Brazil.
  • The new 19-member arrangement was formalized in a document dated May 7 and is set to enter into force on May 8.

Risks

  • The multilateral moratorium lapsed following the March WTO meeting in Yaounde after Brazil objected, creating uncertainty about global trade rules for digital transmissions - sectors affected: digital trade, technology and content distribution.
  • The new arrangement applies among the 19 signatories only and is for an unspecified period, leaving potential gaps in coverage and predictability for firms operating across jurisdictions - sectors affected: multinational tech firms and cross-border service providers.
  • Continued division among WTO members could limit the institution's ability to deliver a permanent, multilateral solution for duties on electronic transmissions - sectors affected: international trade policy and exporters of digital goods and services.

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