A meeting of the World Trade Organization in Yaoundé ended in deadlock early Monday, as member states failed to reach consensus on key issues including reform, agriculture, and the renewal of a global moratorium on customs duties for e-commerce. Deep divisions among delegations ultimately stalled progress.
The impasse followed opposition from Brazil, which blocked a proposal backed by the United States and other developed economies to extend the duty-free treatment of electronic transmissions, such as digital downloads and streaming services.
Trade ministers were unable to renew the long-standing moratorium, under which WTO members have refrained from imposing tariffs on cross-border digital trade.
The failure to secure an extension marks a setback for advanced economies, particularly Washington, which have championed the continuation of the arrangement.
“We worked hard,” Ngozi Okonjo-Iweala, WTO director-general, told the conference.
Four days of intense negotiations in the Cameroonian capital had been scheduled to conclude around midday Sunday, but the closing ceremony was repeatedly delayed as countries scrambled to reach some kind of agreement.
Early Sunday, bleary-eyed negotiators had emerged from an all-night session with a draft text in hand, indicating a minimal deal on reform was in reach, according to diplomatic sources and experts.
That prospect evaporated when Brazil made a last-minute intervention, blocking a text on the e-commerce moratorium to protest the lack of progress in separate talks on agriculture, the sources told AFP on condition of anonymity.
The 166-member WTO has been trying for years to establish a programme of work for negotiations on agriculture, but the issue remains highly sensitive in many countries.
Going into Yaounde, countries had set the bar low, only hoping to issue a joint declaration aimed at laying the groundwork for future negotiations.
The main focus of the discussions in Yaounde, which took place against a backdrop of heightened trade tensions and global economic turmoil linked to the Middle East war, was on reform.
Ministers and delegates had been tasked with developing an action plan to revitalise a WTO weakened by geopolitical strains, stalled negotiations, and rising protectionism.
The organisation, which struggles to reach agreements because of the requirement for consensus, must undergo far-reaching reforms to emerge from a deep crisis that has raised questions over its central role in regulating international trade.
Any advance on reform was contingent on resolving the recurring question of the moratorium on customs duties for electronic transmissions – in place since 1998 and with its renewal discussed at every ministerial meeting since then.
Members, this time, failed to reach a deal, allowing it to lapse on Monday.
The United States had even been pushing for the moratorium to be made permanent, something many developing countries, India chief among them, had balked at over fear of losing tax revenues.
Washington had lowered its expectations over the course of the talks, with an agreement appearing to emerge on Sunday paving the way towards a five-year extension.
But Brazil did not want to go beyond two years, the country’s top diplomat said on X.
The expiration of the moratorium does not automatically trigger tariffs on digital trade, since WTO members can continue to individually choose not to impose customs duties on online goods and services ranging from e-books and music to telemedicine.
Expectations for progress had been low before the talks, but there were hopes the moratorium, which had been regularly renewed since 1998, would at least be extended.
Trade ministers could not agree to extend it for more than two years, which was not enough for the United States, diplomats said.
One said WTO’s future was being jeopardised.
US officials and business groups voiced frustration, and Britain’s Business and Trade Secretary, Peter Kyle, said the outcome was a “major setback for global trade”.
The talks tested WTO’s relevance after a year of huge trade turmoil and more recent disruptions in the Middle East.
Still, a subset of 66 members did agree to sidestep previous hurdles to usher in the world’s first baseline deal on digital trade rules among participants.
Reacting to the deadlock, Deputy Secretary General of the International Chamber of Commerce (ICC), Andrew Wilson, said, “
It marks another crack in the foundations of the WTO system.”
Wilson urged delegates to renew the moratorium before states hit digital services with new charges.
