Guest column: WTO, EU and You

The World Trade Organisation innocently claims that it only wants to foster globalisation through the establishment of free-trade policies. Judging from the recent ruckus in Seattle, it seems many people oppose this ideal, probably because they know that the WTO does much more than wrestle with arcane import tariffs and government subsidies.

For one thing, it seems hell-bent on undermining the Internet.

Under sustained pressure from the European Union, the WTO is considering taxing three kinds of Internet transactions: 1) online content that is downloaded, 2) goods ordered over the Web and "delivered by conventional means" and 3) network services. In effect, everything. The WTO would levy tariffs through its General Agreement on Trade in Services power, which "does not distinguish between technological means of delivery." In other words, if it exists, it's taxable.

Although the WTO's "current practice of not imposing custom duties on electronic commerce" still stands, the "working programme" on e-commerce seems tilted in the direction of taxing Internet commerce. EU Trade Commissioner Pascal Levy, an influential voice inside the WTO, is doing his best to end the current tax-free practice. And he has his followers. For example, before ending his term as the WTO's director general, Renato Ruggerio expressed his view that Web sales weren't different from any other shopping transaction and therefore should be taxed.

It's possible that the protesters in Seattle, who were mostly concerned with environmental and labor issues, have given the Internet a reprieve. The WTO is looking for all the friends it can get now and doesn't want to push e-commerce vendors and suppliers out into the streets along with its other enemies.

But don't be lulled into complacency. The EU is determined to make the WTO change its position. And with little opposition outside the US, it could easily prevail.

Today, IT doesn't have to concern itself with charging, gathering and remitting online taxes to various collection agencies. If the EU and WTO pals get their way, such programs will need to be added to your to-do list early in the next century.

Mark Hall is Computerworld's West Coast bureau chief. You can contact him at mark_hall@computerworld.com.

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