Threat of cross-border data tariffs looms over WTO

Concern is growing that a World Trade Organization (WTO) moratorium on cross-border tariffs covering data may not be extended, which would hit e-commerce if countries decide to introduce such tariffs. Representatives of the WTO's 164 members are meeting in Geneva as part of a multi-day ministerial conference. June 15 was to be …

[elsergiovolador]

TCP/IP

The Customs Protocol / International Payola

Can you imagine attaching a customs form / blob to each data packet?

Then the customs officer inspecting your payload moaning that you didn't declare eggplant emoji and your data gets confiscated.

[Pascal Monett]

"taxing e-commerce the same way that [..] physical goods traded internationally"

In truth, I have to admit that that does not seem unreasonable.

At the condition that the trade is made internationally. Currently, I make purchases on Amazon.fr. That, to me, means that whatever international taxation there is has already taken place. If that's not the case, they should clean that part up, but I fail to see why I should be contacted for international taxes when I'm buying stuff stored in France from a French web site.

Looks like another storm in a teacup from where I'm sitting.

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@Pascal Monett

"In truth, I have to admit that that does not seem unreasonable."

You might if the prices rise for no gain. Is it to your benefit to get something you want or to get something you want + tip to the gov?

[Peter2]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

Nobody particuarly likes paying taxes, but they do pay for police stopping people digging cables up to sell for scrap, and schools, hospitals etc.

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@Peter2

"Nobody particuarly likes paying taxes, but they do pay for police stopping people digging cables up to sell for scrap, and schools, hospitals etc."

More like plastic policemen. 3 calls to 999 to get a crime number while active threats to property and harassment were ongoing, guess how many cops we saw in total?

Companies have been moving to optical which isnt worth digging up while metal theft isnt stopped (not cable but a local entertainment has been destroyed by metal thieves. The police found them but nothing will happen and donations/volunteers have to put it right).

Hospitals that were half empty tiktok studios while our health service performed worse than usual?

People might hold less of a grudge against tax if it was better spent than diversity training and white elephants but that has little to do with sticking tariffs on imports which is to disadvantage foreign goods compared to domestic.

[veti]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

If you don't like the way your taxes are spent, the remedy is to vote in a more trustworthy government. If there are no better candidates available, then put yourself up for election.

There is no case in which reducing the available tax base - which is what happens when things are exempted - makes public spending more accountable. Rather the reverse. Accountability costs money.

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@veti

"If you don't like the way your taxes are spent, the remedy is to vote in a more trustworthy government"

The solution would be less government. Kinda hard in a system which is self perpetuating.

"There is no case in which reducing the available tax base - which is what happens when things are exempted - makes public spending more accountable."

It makes it harder to keep spending more when taking in less. And again tariffs are about forcing a disadvantage on foreign imports which is a cost on the people here.

[localzuk]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

Less government has been tried. It doesn't work. Less government means more scams, criminals and frauds. It means more poor quality goods coming to market due to less regulation. It means more people getting sick or hurt etc...

We have the amount of government we have today in reaction to problems. Politicians didn't just wake up one day and decide "lets regulate XYZ market for no reason".

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@localzuk

"Less government has been tried. It doesn't work"

Thats an interesting statement. With an ever growing government not much changes in that regard but the price tag keeps going up. We have seen big government, it doesnt work and collapses under its own weight. We have of course succeeded with less government.

"It means more people getting sick or hurt etc..."

That has been the outcome of big governments.

"We have the amount of government we have today in reaction to problems."

Yes. Through over reaction or slow to catch up with reality as the world moves on. And with increasing 'reactions' and being seen to do something. Even protectionism for special interests. None of them being a good thing while the general rules are forever relevant and where government is needed.

[localzuk]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

Sure, spending keeps going up.

You know what also keeps going up? Population and inflation. If you measure federal govt spending against GDP, it has been fairly level since 1952 in the USA... State and local spending though? They've been increasing.

The UK, as a comparison, has been rather more all over the place, but if you draw a line through it (excluding covid years, but including financial crash, and the 70s version of the financial crash), it is fairly flat too. Averaging around 40%.

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@localzuk

"The UK, as a comparison, has been rather more all over the place, but if you draw a line through it (excluding covid years, but including financial crash, and the 70s version of the financial crash), it is fairly flat too. Averaging around 40%."

The world wars pushing up the public spending but the difficulty being to bring it back down.

[veti]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

It makes it harder to keep spending more when taking in less.

Right. So what effect do you think that has? Hint: Mrs Thatcher believed in this, and she attempted it for a while, but to her credit she abandoned the idea when she saw the practical effect.

The practical effect being that the burden of spending cuts invariably falls on those parts of the public sector with the least bargaining leverage. Like frontline nurses, teachers, and others the nature of whose jobs makes it difficult for them either to walk off to another employer, or to strike effectively. The management, the consultants and analysts - they all have other options, so either you keep paying them well, or the best of them simply go elsewhere.

That's what happens when you try to "starve the beast", rather than actually doing the hard work of specifying exactly what services to cut. (And of course if you do that, you'll be accused - rightly - of micromanaging, and alienate the very managers who could do most to help you.)

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@veti

"The practical effect being that the burden of spending cuts invariably falls on those parts of the public sector with the least bargaining leverage."

I think you have just made a seriously strong argument against big government. Fiefdoms built to take more of what we work to achieve. And the very services the people are supposed to be funding and need suffer.

[Anonymous Coward]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

All tariffs raise prices in the country that's imposing the tariff.

Yes, US consumers would pay less if the US dropped its tariffs against China but sometimes government considerations, be they security, competitiveness, or funding, take precedence.

This dropping of the US moratorium (and we all know they were the driving force) seems not only reasonable but overdue.

It's not like governments can run on GoFundMe campaigns.

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@HildyJ

"Yes, US consumers would pay less if the US dropped its tariffs against China but sometimes government considerations, be they security, competitiveness, or funding, take precedence."

Out of that list security is about the only one I agree with. Competitiveness is driven by competition not protectionism. Funding is easier when government doesnt spend like drunken sailors. Security should come from the defense budget.

"It's not like governments can run on GoFundMe campaigns."

Or stop themselves from splurging it seems. They do run a GoFundMe by allowing anyone to send extra money to the treasury if they so wish. Nobody chooses to though. They would first have to convince people it would be value for money.

[John69]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

> Competitiveness is driven by competition not protectionism.

Historically all major economies have used protectionism to become competitive. They generally only go free market fundamentalist once they are globally competitive.

[codejunky]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

@John69

"Historically all major economies have used protectionism to become competitive. They generally only go free market fundamentalist once they are globally competitive."

Except for when the major economy unilaterally drops protectionism and its to the benefit of the country and its people (see UK corn laws). Also protectionism did not help the UK with its car industry but by opening up the UK had access to working cars while domestic vehicles lost out.

[Anonymous Coward]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

All tariffs raise prices in the country that's imposing the tariff

Economic theory tells us that the price is set by what the market will stand.

Large countries like the US impose tariffs on agricultural products that they also produce. The market price doesn't change, and so the sellers have to accept less than the market price, and hand their profits over to rich Americans.

Tariffs pretty much work well for big countries, and poorly for small ones.

[Peter2]

Re: "taxing e-commerce the same way that [..] physical goods traded internationally"

I suspect that the issue comes down to Microsoft stating that everybody in the world will no longer own licenses, but will pay a monthly rental to Microsoft 365 so the local company South African company that was selling the licenses and paying tax has ceased to exist in favour of paying Microsoft USA sums of money constantly.

Similar with Netflix subscriptions displacing retail CD/DVD sales and presumably countless other examples that have moved to a subscription basis.

I can see why taxing those sort of constant ongoing revenue streams would be attractive and I also can't see a reason why companies shouldn't pay reasonable taxes where the users are based, although I can see that they will scream blue murder about being required to do so.

[Missing Semicolon]

local clouds

It would also encourage local cloud companies, instead of all of everybody's data being in AWSs bit barns.

Does this increase prices? Well of course, that's the point - it gives local providers some headroom to make a profit.

[J.G.Harston]

The WTO is in the business of reducing and eliminating tariffs and minimising exceptions, not imposing them. So the current situation is not a case of "exempting" data from tariffs, but the default position of *banning* tariffs on data if you want to be compliant with WTO rules. Countries like India are petitioning to get the WTO to move their trade rules backwards into a trade tariff environment.