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THE INTERNET AND CUSTOMS DUTIES
One of the primary goals of the United States with respect to electronic commerce is to ensure that trade over the Internet can develop unimpeded. In this regard, the United States has sought to keep cyberspace "duty free" -- that is, free from tariffs or customs duties on electronic transmissions (the data streams that constitute products and services in cyberspace). Currently, no member of the World Trade Organization (WTO) considers electronic transmissions as imports subject to duties for customs purposes. Indeed, member governments of the WTO agreed in May 1998 to continue to refrain from imposing customs duties on electronic transmissions. A cyberspace free of customs duties does not mean that physical goods ordered over the Internet are free from customs duties. Nor does it mean that items ordered electronically are exempt from internal taxes. Duty-free cyberspace merely means that electronic transmissions coming from abroad are not subject to customs duties at the border. U.S. trading partners recognize the obvious benefits of continuing this moratorium. It encourages vigorous competition, innovation, and entrepreneurship on the Internet and avoids the trade-distorting effects of customs duties. As a result, consumers benefit from cheaper goods, businesses benefit from the discipline of the marketplace, and the overall economy benefits from enhanced growth. The moratorium also avoids the costs associated with imposing customs duties on electronic transmissions. For a delivery mechanism based on an open network, where borders are meaningless, imposing customs duties "at the border" would be a burden that would slow the growth of electronic commerce. Many companies would shun doing business with countries that impose such requirements. While no country currently imposes duties on electronic transmissions, the United States is the only WTO member that has formalized this commitment by specifying it in its tariff schedule. The United States is encouraging all WTO members to join in making a similar, internationally binding commitment. The United States also has urged WTO members to formally adopt the understanding that e-commerce falls within the scope of existing WTO rules and commitments. This is important, as WTO obligations help to avert trade-restrictive regulations affecting e-commerce and act as a strong and powerful defense against unreasonable regulation that creates trade barriers. Conducting e-commerce in conformity with WTO rules and commitments will thereby ensure a predictable, trade-liberalizing environment, promote the growth of e-commerce, and create opportunities for trade for WTO members at all stages of development. |
