The member countries of WTO (World Trade Organisation) should include issues pertaining to crypto currency while negotiating any agreement on the e-commerce sector, think tank GTRI said on Monday.
As the crypto market garners increasing global attention, its classification under the WTO e-commerce framework remains ambiguous, Global Trade Research Initiative (GTRI) said.
It added that the debate should pivot on whether exchanges of crypto-currency fall under 'electronic transmissions' in the e-commerce scope.
"With the multifaceted dynamics of the e-commerce landscape, the outcomes of the ongoing WTO negotiations hold significant implications for global digital trade.
"The inclusion or exclusion of crypto-currencies and the diverse positions of influential nations will shape the future of international e-commerce policies," GTRI Co-Founder Ajay Srivastava said.
At present, the WTO members are holding two-pronged e-commerce negotiations (joint initiative and e-commerce moratorium) but the crypto currency so far is not part of any of the talks.
Under joint initiative on e-commerce, 89 members of the WTO are deliberating on subjects such as tariffs, customs clearance, paperless trading, online privacy, and cybersecurity.
However, the negotiations faced a significant hurdle when the US, a key player in the global digital space, announced on October 25, its withdrawal from multiple discussed points. This move may provoke a global revaluation of e-commerce policies.
Interestingly, India, foreseeing challenges linked to unregulated digital trade, has remained absent from these talks, a decision seemingly validated by the US pullback, he said.
Introduced in 1998, this moratorium restricts countries from applying customs duties on electronic transmissions. It was last extended for two years in June 2022.
India opposes the continuation of the e-commerce moratorium, arguing that the moratorium is adversely impacting developing countries and they need to preserve policy space for their digital advancement, regulate imports, and generate revenue through customs duties.
India, along with South Africa, has been making submissions on the adverse impact of the moratorium on developing countries. Other developing countries, such as Sri Lanka and Indonesia, have supported this stand.
The United Nations Conference on Trade and Development has estimated the potential tariff revenue loss for developing countries every year due to the moratorium on e-transmissions at USD 10 billion, as compared to only USD 289 million for high-income countries, the GTRI said.
It added that the rise of crypto-currency, a digital currency operating outside central banks, has added complexity to these discussions.
"Globally, crypto-currency adoption is witnessing an uptrend. India, for instance, has levied a heightened capital gains tax on crypto earnings," it said, adding "the WTO members must prioritise discussions on crypto currency and its possible linkages with ongoing e-commerce negotiations before members start taking liberties with interpretation leading to disputes".
The WTO's 13th Ministerial Conference (MC13) will take place from February 26 to 29, 2024 in Abu Dhabi. The Ministerial Conference is the highest decision making body of the Geneva-based organisation which has 164 members.