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WTO May Extend E-Commerce Import Duty Moratorium 48

Pig Hogger writes "A meeting of World Trade Ministers would seem to propose an 18 month extension of the duty break that currently applies to cyberspace. But the fact is, the duty break only applies to what is transmitted electronically, so therefore imposing duties on such would essentially be unenforcable by customs officials... However, it is being proposed by the US that such a duty exemption be extended to the 'physical equivalent' of goods such as digital music and software. Can you spell MEDIA?" The story's from Fox News.
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WTO May Extend E-Commerce Import Duty Moratorium

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  • They should get their shit together and either impose duties or not, none of these extension shenanigans.. A lot of businesses are counting on duty-free e-commerce to continue in order to be successful.
  • Hopefully this is just the first step in governments realizing that there are no national boundaries on the internet and that attempting to enforce them is a waste of resources.

  • For the first time, we're seeing governments act intelligently. They don't know what is happening with the Internet, so they are taking a wait and see attitude. Catalogs had the opportunity to eliminate Brick-and-Mortar, they didn't.

    A long-term decision would be unwise. Nobody knows what the future will bring for Cyberspace, and decisions can always be reversed. A 1.5 year decision is unlikely to be revisited until it is time to discuss an exemption. This allows the WTO to revisit the issue as the transistions are taking place.

    In the long run, the Internet MAY make sales/VAT taxes irrelevant as geography becomes silly. On the other hand, if localities eliminate the tax advantage of E-businesses by eliminating VAT/sales taxes, then we may see a long term vision which involves both brick-and-mortar and E-businesses. The WTO is wise to take a wait and see approach.
  • Although I like having things be duty-free, I would really like to see an actual solution put in place. I am an e-commerce developer, and I would really prefer to have the law determined soon, even if it means paying a duty, so I do not have to go back and change my programs later. This also goes for the internet-sales-tax issue.
  • There is a bunch of information at this site [] and many others regarding the WTO and why there is a formidable protest being organised for the meeting in Seattle. Some folks down here in Dallas are organizing a demonstration to show solidarity with the Seattle protesters, we are few, but if you're interested and in Dallas, swing by the bulletin board at this site [] and hook up with us. It'd be great to see some people in different cities doing the same if they are unable to get to seattle.
  • Aaron said it was unlikely that proposal would be approved at the upcoming ministerial meeting, but he was optimistic an agreement could be reached before the next WTO ministerial meeting in three years.

    Is it just me, or should maybe the World Trade Organization hold ministerial meetings just a tad more often than every three years? Don't get me wrong, I support their 'wait-and-see' approach, as it is almost a first in good government strategy. Almost always this approach is used exactly when it doesn't need to be by governments. But it's rather obvious they've taken to sticking their nose into internet trade, and if for no other reason than that, they should meet more often.

    Who can keep up with something as fast-paced as the internet, and yet choose to meet that seldom?

  • This assuredly good news, but I'm a little disappointed that it even needs be discussed.

    One thing that has been fundamentally obvious for a long time is that the new world of global telecommunications and "cyberspace" necessitates a serious legal rethinking. It's not at all clear "where" something happens or exists. The courts are decades behind the pace of technology at it is. In the 80s I ran a local BBS and came across this issue. If there is a legal dispute between two users, it was unclear whether the laws of the location of the BBS, the location of the accused, or the location of the accuser applied. I had imagined that this would be resolved by an act of congress within a few years. Yeah right. Over a decade later, the situation has become tremendously murkier, and no legal progress has been made.

    We live in a world in which nobody knows where they are, or whose laws apply to them. A message travelling between two cities in Switzerland could go through half a dozen countries on the way. Or several dozen. And people imagine that they can even *define* an import or export, let alone monitor, regulate or tax them?!!
  • There is more than e-commerce law at stake here. The WTO also rules on patent and intellectual property law.
    Take a look at a list of financial supporters for the upcoming meeting in Seattle, and do a little research [].

    SUPPORTERS LIST (as of November 1, 1999)

    Emerald Level ($250,000)
    Allied Signal/Honeywell
    Deloitte & Touche
    Extreme Networks
    Ford Motor Company
    General Motors Corporation
    Microsoft Corporation
    Nextel Communications
    State of Washington
    The Boeing Company
    U S WEST

    Diamond Level ($249,999-$150,000)
    United Parcel Service
    United Technologies Corporation
    Weyerhaeuser Company

    Platinum Level ($149,999-$75,000)
    Bank of America
    Columbia Resource Group
    Expeditors International
    Hewlett-Packard Company
    Joseph E. Seagram & Sons
    Preston Gates & Ellis
    Procter & Gamble
    The Production Network
    The Workshop

    Gold Level ($74,999-$25,000)
    Active Voice Corporation
    APCO Associates
    Business Wire
    Cisco Systems
    Digital Seattle
    Federal Express Corporation
    Frank Russell Company
    Port of Seattle
    Skyway Luggage Company
    U.S. Bank

    Silver Level ($24,999-$10,000)
    APL Limited
    Bethlehem Steel
    Gray Line of Seattle
    Intel Corporation
    Northwest Airlines
    Northwest Horticultural Council
    Perkins Coie LLP
    Port of Tacoma
    Sandler, Travis & Rosenberg, P.A.
    Seattle Chocolate Company
    Thistle Press
    Washington Wine Commission
    United Airlines
    Xerox Business Services

    Bronze Level ($9,999-$5,000)
    American Electronics Association
    American Vintners Association
    Atlas Air
    Chase Manhattan Bank
    Chukar Cherry Company
    City University
    Homelands International Company
    Horizon Airlines
    Lane Powell Spears Lubersky LLP
    Muckleshoot Casino
    Renaissance Madison Hotel
    S. Martinelli & Co.
    Union Bank of California
    Union Square Limited Partnership
    Washington Software Alliance
  • by Signal 11 ( 7608 ) on Sunday November 14, 1999 @12:33PM (#1534276)
    *click* *click*
    I'm outside the US!

    *click* *click*
    Now I'm back in!

    *click* *click*
    Outside the US again!

    What are you gonna do, tell my legions of electrons to stop at the router for an inspection? You'll find they're largely negatively charged from being spammed alot, but little else...

  • Actually, where a deal takes place is pretty well defined, as the law has had to deal with telex and fax for many years; a deal takes place and is subject to the law where acceptance is received. In English Law the classic example is the case Entores v Miles Far East Corporation - dates back to 1955!

    I presume the same general principles of contract law applies to Internet transactions.

  • by cybaea ( 79975 ) <allane.cybaea@com> on Sunday November 14, 1999 @12:37PM (#1534278) Homepage Journal

    Historically duties and sales taxes comes from the ancient marketplace. The sellers would pay a small fee to the market which would help to promote it and, crucially, guarantee and enforce a certain standard and a consistent set of rules for trade. (Big) Government has taken over the role as the overseer of trading standards and as the guarantoor of the order of the "marketplace". It has also taken the market tax.

    However, in the internet age this approach is looking increasingly strange. I, as a consumer, can buy goods anywhere at the click of a mouse, and the government can not hope to regulate all and every market. And even if I knew the physical location of the seller (not a trivial thing) and even if the local government enforced a reasonable set of trading standards (obviously not true everywhere), it would be very difficult and expensive for me to actually seek redress in a local court.

    The solution, in my opinion, is to return to the medieval market arrangement. Let us have private markets which regulate themselves, and let the consumers decide which markets to deal in. It is not a completely alien idea: most stock markets operate in this way (even if they are not exactly free from government regulation) and most of the online markets (e.g. e-bay, amazon, ...) have at least some rules and attempts at consumer protection.

    The bad news for govenrment is that it will loose a lot of revenue. But it will also loose some of the responsibility (if it can ever give up power!) and therefore, presumably, costs. In the future governments will increasingly have to rely on taxing immobile value like land and buildings. Trade and people are both becoming too mobile.

    Incidently the UK has a funny half-way house where I as a consumer can choose to sue my UK credit card company instead of the retailer for any disputes over a purchase. Interesting: as money become increasingly a branded commodity is this the way forward?

  • Sales taxes/VAT may have problems, but I don't think they'll disappear. Governments may make steps towards standardising such taxes [or at least getting them within a few percent of each other]. Remember any government has to get its revenue from SOMEWHERE, so if sales taxes disappear, local income taxes or some other form of tax will have to go up to compensate.
  • by cybaea ( 79975 ) <allane.cybaea@com> on Sunday November 14, 1999 @12:45PM (#1534280) Homepage Journal

    Help me understand this one: I'm a Danish citizen who dials my UK ISP from Germany to read my e-mail on a Californian server (I'm not making this up!) : where "am" I, for the purpose of the law? Does it make a difference if I download the e-mail to my laptop before/after reading it?

    I'm not a lawyer so I'm confused.

  • This is just a prime example of how traditional concepts in industry are clashing with Internet culture/concepts. It seems to me that with more and more things coming online, people have brought with them their traditional concepts about country boundaries, transporting of goods, etc., and they are experiencing a "culture shock" in a sense.

    For example, they try to draw an analogy between "exporting" or "importing" of "goods". First of all, there is no physical object being moved from one place to another, it's merely an electronic transmission of some data. As long as the source machine agrees to send it to the destination, this transfer can take place without needing to physically carry the data across the country. The analogy between "goods" and a data stream is fuzzy -- would downloading a README file constitute an "import of goods" or do you need to download the entire package before it's considered a unit of "goods"?

    Then, on the Internet, the boundaries are not physical -- the only boundaries are connectivity and accessibility of the data on the remote host. Sounds like a lot of these concepts -- import, export, the definitions of "goods" must be rethought to fit in with the Internet medium.

    Another example (probably offtopic :-) is how traditional concepts of proprietary software are so ingrained that people just don't "get" the Open Source idea.

    And yes indeed, hopefully this is a first step, not only for people to realize the Internet cannot be regulated, but even more so, for people to realize that the Internet is a completely different medium with rules that are quite different from traditional rules. New rules need to be developed that fit in the Internet's context, not merely old rules shoe-horned (imposed) on top of the Internet as though the net were the same as the physical world.

  • by LL ( 20038 ) on Sunday November 14, 1999 @01:08PM (#1534282)
    Fundamentally what is a tax? A forced contribution to provide for public benefits which would be too difficult to charge for directly. E.g. laws/regulation, self-defense, public health information. etc. There are a couple of problems with taxing the internet, unlike federal roads computer networks are essentially privately owned (ignoring the academic/government bits) and (AOL/MSN/Yahoo notwithstanding) market forces have compelled players to interoperate, if only to get a slice of a larger pie.

    Secondly, governments, despite their perception of gross stupidity, are not ignorant about the economic benefits of IT. Any one government that wants to put a tarriff/tax on IT traffic will find itself in a comparative disadvantage as firms immediately relocate their services offshore and land their fibre cables elsewhere. How many country towns disappeared due to newly created highways bypassing their locales?

    Thirdly is what exactly is there to be taxed? Can you demand 20% of all the bits flowing along a wire? Can you have half a promise (essentially what money has now devolved to)? Much of the information that flows nowadays are transactions, or essentially bookkeeping activities between firms or internal transfers between business units of the same company. Calculating a dollar cost is a complex task. For its 10% GST impost, the Australian government tried to figure out a value-added-tax formula for financial transactions but gave up in the end.

    As for juristiction, that is another whole can of worms that nobody wants to touch due to the headaches (and politics) involved. There will always be the odd-ball country that will refuse to play along (why do you think international tax havens exist?). Even if the US government unilaterally imposed the ol' greenback on the rest of the world with all the associated legal baggage, some smart cookie will find a solution to avoid confiscatory measures like establishing extra-territorial oil platforms beyond national maritine borders to host electronic services. Identities and paper corporations can be created faster than any countermeasure to crack down so it becomes a losing game. One can only look at corporations like Fox/News to see how shifting costs between countries can add extra value to the bottom-line.

    As one wag used to say, he doesn't think the government is that efficient that its worth giving them more than the minimum required by law. Perhaps the only solution is to become rich then let public pressure and social stigma require individual voluntary contributions to non-profit causes.

  • ... is here []
  • by PenguinX ( 18932 )
    On a related gripe, I work in the World Trade center in Seattle - there are supposed to be 50 thousand people protesting that day...

    I have this funny feeling that it is going to be difficult for me to get in that week.
  • Notions of importing and exporting have been applied to things other than physical goods for a long long time. Like insurance for example, or banking, or for that matter electricity. That aspect is nothing new in itself.
  • IANAL either - but I did pass an A level course on English law. :-)

    Where you "are" doesn't matter - most contracts you make actually state under which jurisdiction the contract has been drafted and to which both parties agree to be bound.

    To take your case - you have an English ISP and you agreed to their terms and conditions - disputes with them will probably be setlled under English law. If you have a separate agreement with a Californian company to get your email and you agreed to their terms and conditions then you'll be subject to Californian state law. If you offer something to sell on the internet, and you agree to sell it whilst you are standing in Germany, then you'll probably be subject to German contract law. Whose laws you are subject to vary with who you want to pick a fight with! :-).

    [if anyone IS a lawyer feel free to correct me - I'm sure a professional lawyer can make it more complicated :-) ]

  • Sales Tax is not the only way governments can get funded, and they are not the best by far.
    Tax Sales are unfair cause they are not progressive.

    Now on an 'ecological' point of view. Tax sales is an incentive for rich people to invest their money in finance instead of buying taxed goods. Income tax on the other side favors people with low income as they get more cash after tax than people with higher revenue for the same work provided
  • IANAE (I am not an Economist!)

    IMHO, ANY tax can be avoided/limited if you have sufficiently good acccountants.

    Sales taxes are progressive in that rich people spend more money and hence pay more tax. As the previous poster stated, they are an incentive to invest, but for everyone, not just the rich.

  • If you offer something to sell on the internet, and you agree to sell it whilst you are standing in Germany, then you'll probably be subject to German contract law

    Except, firstly, that this may be English law but it is possible that it is not German law so you, as the consumer, would have no rights! (How is this dealt with for faxes?) Secondly, there was an EU proposal that would make the jurisdiction of any internet transaction the country of the consumer, i.e. the direct opposite of English law. Of course only enforsable within the EU so I'd have to ask you for your nationality and deal with you differently (what if you lie!?). I guess US companies already have to do this with the silly export restrictions.

    It all just goes to show that conventional notions fail in the internet world.

    I'm going to stand with one leg on each side of a border, connect through my GSM cell-phone, and sell you something dodgy just to find out how the law is going to deal with that.

    But thanks for the clarification. Oh, and I think it [] is now a Scottish ISP - I'm sure there are somebody who cares... :-)

  • Aha! An automated complaint! []
    That crony thing gives it all away- as kickass as that script is the crony makes it reek of itself. That said, the WTO is _evil_ and to that guy that posted earlier about what a bummer day he will have crossing the line of protest to get to work in Seattle- BWAHAHAHAHAHAHAHAA!
  • The WTO represents a serious change in the way nations and global corporations interact. It is the concentration of power in an unelected international court to inforce the rights of capital. It is a world court to which national and state laws can be overturned with out appeal. Please read up on what the WTO means to all of us. The growing power of the WTO is going to be one of the defining features of global economics and politics in the 21st century.

    Consider, in the future you may not be able to pass a law which protects the environment, enforces minimum wages, or any number of other 'anti-free trade' laws.

    There are lots of sites about what people are doing to counter the WTO, such as []. You should also read up on the background [] of the new global capitalist order [].
  • Yeah, no shit... buh-bye State. Hello Money$$$!
    -/ Hey, I really like Microsoft's slant on foreign trade policy, maybe I should invest some stock in them and get a copy of my license barcode tattooed to my ass- and of course I sure don't want to have any Jews in my closet when the MS squadron come calling, and our theme song is sure nice. /-
    Awww, isn't that great. The WTO has delayed an e-commerce tax law! Waaaait a second.. Who the fuck is the WTO [] and how did they end up with the power to decide this shit for me?!
  • Open competetive markets ..\snip/.. better way forward than corrupt or corruptible government preference.
    I must have missed the meeting where we decided that big business decided global law. Do you happen to have the minutes from it?
  • I am versed almost exclusively in U.S. law, which is of course different. I'm not sure if we have a similar law w/r/t contract issues, but I know that's it's not as clear in other situations.

    In a fairly recent case, a system administrator, who had adult material which was legal in the state where he (and his server) reside was indicted under the laws of the state someone was in when they downloaded the materials. He paid a fine, and there was no appeal. This case is one of many similar ones. Under such a precedent, you could be charged under the laws of any country from which someone can connect to your service. How'd you like to be arrested next time you visit Hong Kong for violating Chinese political speech laws?
  • Now how does this work?

    Physically, I'm in New Zealand, working for a large multi-national company, based out of the US. I'm using the internal network to get to a firewall based in Texas. When it comes to doing anything on the Internet, where am I?
  • Precisely my point - with a single mouse click, you could be in Australia and not even know it. How, exactly, is customs going to stop that, hmmm?

  • Judging by some of the posts here, there are some pretty strong feelings about the WTO gonna be unleashed in an atmosphere of "a whole bunch of big corporations have several billion dollars sunk into this thing already". Perhaps this explains why a Seattle cop freaked out over some skiers bad-mouthing each other in Usenet.

  • Picture this..
    Seller is in China... Website in United States.. buyer in Australia..
    Wait it gets more complex...
    Manfactuer is in england as well as a werhousing company that accually pacage and ships the product... the costumer has the pacage (a gift) shipped to a friend in Cannida not to himself in Australia.

    Who gets the sales tax?

    Wait a few years... that website could be in orbit...
  • Robert X Cringely says Why the Internet Exemption From Taxes is Not Entirely a Good Thing [].

    He warns that it will lead to include an "Internet transaction" in your supermarket buy.


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