An alternative agreement on e-commerce. Divisions within the World Trade Organization
A recent document has revealed that the United States and a number of major economies are heading for an alternative agreement that prevents the imposition of tariffs on e-commerce, which will come into effect on May 8, 2026 among the supporting countries only, in the event that Brazil and Turkey continue to refuse to extend the global digital exemption.
The new agreement, according to the document, applies only between willing countries and includes streaming services and downloading programs, movies and music, with the United States, the European Union, Canada, Japan, Australia, South Korea and New Zealand asserting that charging for e-transfers would undermine the stability of the global digital economy.
The roots of the dispute within the WTO
The roots of the dispute within the WTO go back to the ministerial meeting held in Yaoundé in March 2026, when Turkey and Brazil refused to extend the global exemption imposed since 1998 on the imposition of tariffs on e-commerce.
The two countries believe that the continuation of this exemption serves the big tech companies in the United States and Europe, while depriving emerging economies of the opportunity to collect increased digital revenues, and limiting their ability to regulate the digital market and protect their domestic industries, as this refusal led to the collapse of negotiations within the organization, and opened the door to a U.S. move to launch an alternative agreement only between willing countries.
Brazil and Turkey object. Fears that the world will be divided into two digital systems
Brazil and Turkey, on the other hand, stand by their rejection of the long-term extension, arguing that digital exemptions serve Big Western tech companies at the expense of emerging economies, as they see future tariffs as giving them tools to protect their industries and increase their revenues.
Diplomatic assessments indicate that the chances of reaching a settlement during the General Council meeting in Geneva are very slim, as the US move raises fears of the formation of two global digital trading systems, one led by Western economies that maintains exemptions, and the other that allows for the imposition of fees on data and electronic services.
Experts believe that this split will further complicate the e-commerce movement, and create uncertainty for companies operating in technology, broadcasting, and cloud services.
The crisis highlights the challenges faced by the WTO in keeping pace with recent economic transformations, with the US ambassador to the WTO, Joseph Barlon, saying that the stalled extension due to the objection of only two countries reflects the depth of the crisis within the organization.
Andrew Wilson, deputy secretary-general for policy at the International Chamber of Commerce, warned that the collapse of the agreement would send a dangerous message that the organization's rules are "slowly eroding" and that a limited agreement between a group of countries would be less effective because it would not be universally enforced.
Customs duties on e-commerce
Tariffs on e-commerce are a move that allows countries to tax cross-border digital content transfers, such as downloads of software, movies, music, and e-books, as well as streaming services and digital platforms.
This means that any digital purchase or upload may become subject to additional fees, which may raise prices for consumers and increase the costs for digital companies, but in return it gives developing countries a new source of income and allows them to organize their digital economy in line with their interests.