Last week, the United States announced that it was confident that the World Trade Organization would extend a temporary ban on e-commerce tariffs.
That’s the good news.
The bad news is that Deputy Trade Representative Susan Esserman said a U.S. proposal that would permanently stop member nations from imposing duties upon e-commerce had little chance of success because developing nations refused to sign on.
The fact of the matter is that while the European Union and the 21-member Asia-Pacific Economic Forum support the U.S. effort to keep e-commerce duty free, developing countries want to see how e-commerce will affect their economies before they make up their minds.
Fear Of Western Economic Invasion
Proponents of global e-commerce quickly lose sight of a major fear among poor countries: They’re scared to death of being swallowed whole by a behemoth called capitalism.
One can hardly blame them, considering that many of these countries are no match for the slick-running selling machines that could easily invade their markets via the Internet.
These countries, like so many others, feel that tariffs provide a big stick that could be used to keep the foreign devils at bay.
In addition to the fear of economic loss, industry observers say that smaller countries also fear that their culture could be decimated by the World Wide Web’s unwelcome intrusion.
Only Hurting Themselves
Proponents of a permanent moratorium contend that tariffs imposed by developing countries would only serve to isolate them further from the rest of the new economy.
Moreover, they preach that by embracing a free market solution via the Internet, these countries would be taking a baby step toward affluence.
Both Sides Have A Point
On the issue of e-commerce tariffs, I think that both sides make strong points.
But let me turn it around.
Today, western economies are in the driver’s seat. But what happens 10 years from now when professions such as engineers, accountants and scientists in developing countries harness the power of e-commerce? Suppose they suddenly offer their services for much lower prices than competing Western professionals?
By the way, this process is already happening via the Internet. If it becomes a trend, I wonder how long would it take for the professional classes in the U.S. and Europe to scream for tariffs to be imposed on foreign e-commerce?
In an ideal world, developed countries could neutralize these demands for tariffs by pumping capital into — and building the infrastructure of — developing countries that are so pitifully behind.
Nonetheless, I believe the chances of that ever happening are slim and none.
So, I’m afraid, it’s time to get prepared for the eventuality ofe-commerce tariffs.
What do you think? Let’s talk about it.