The World Trade Organization suffered a fresh setback on Monday after ministers meeting in Cameroon failed to agree on a reform roadmap or extend a long-standing moratorium on customs duties for electronic transmissions, exposing deep divisions over the future of global trade rules.
The World Trade Organization emerged weakened from four days of tense ministerial talks in Cameroon on Monday, after members failed to strike a deal on reforming the trade body and allowed a key moratorium on e-commerce duties to lapse.
The deadlock, which unfolded in the early hours after marathon negotiations, dealt a new blow to the 30-year-old institution at a time of rising protectionism, geopolitical conflict and mounting doubts over the future of multilateral trade cooperation.
At the centre of the collapse was a dispute over the WTO’s moratorium on customs duties for electronic transmissions — a rule first introduced in 1998 that has prevented countries from taxing digital products such as software downloads, e-books, video games and streaming services.
The United States and several major trading partners pushed for a long-term or permanent extension, arguing that the moratorium is essential for predictability in the digital economy and for maintaining support for the WTO itself. But Brazil, backed by some developing countries including Turkey, opposed a lengthy renewal, insisting poorer nations should preserve the option of taxing digital trade as online commerce evolves.
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Diplomats said negotiators had narrowed the gap during closed-door talks on Sunday, with proposals ranging from a two-year extension to a four-year compromise ending in 2031. But no consensus emerged.
As a result, the moratorium expired without renewal — a symbolic and practical setback for the WTO, whose decisions require consensus among all members. WTO Director-General Ngozi Okonjo-Iweala said members hoped to restore the arrangement in future talks, adding that Brazil and the United States needed more time to bridge their differences.
The failure overshadowed what had been billed as a crucial test of the WTO’s relevance after months of global trade disruption and intensifying pressure on the multilateral system.
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The meeting in Yaoundé had been expected to at least produce a work programme on reform, including proposals to make subsidy use more transparent, streamline decision-making and adapt rules to new trade realities such as digital commerce and industrial policy. Instead, ministers left without an agreed reform plan, though the WTO said some technical progress had been made and discussions would resume in Geneva in May.
The collapse also laid bare the shifting politics inside the organisation.
The United States, under President Donald Trump, has grown increasingly sceptical of multilateral institutions and has shown less willingness to compromise to preserve the WTO system. Trade analysts say that marks a sharp break from Washington’s historic role as a principal backer of the rules-based order.
“In the old days because they felt responsibility for the system the Americans would have swallowed hard and taken a hit,” former WTO director Keith Rockwell told Reuters. “But now they won’t do that anymore.”
At the same time, developing countries have become more assertive in challenging rules they say favour advanced economies and large technology firms. Brazil’s resistance reflected broader concerns among some members that extending the moratorium indefinitely would deprive them of future tax revenue and policy flexibility.
The stalemate is likely to intensify interest in alternative trade arrangements outside the WTO framework, including regional and plurilateral deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP.
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Even before the talks ended, some WTO members had begun moving in that direction. On Saturday, 66 members agreed to move ahead with baseline digital trade rules outside the full consensus process, underlining how increasingly difficult it has become to secure universal agreement within the body.
For many delegates in Yaoundé, the outcome reinforced a stark conclusion: while the WTO remains central to global commerce, its ability to set the rules is slipping.
