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The failure of the 14th World Trade Organization (WTO) Ministerial Conference (MC14) to reach consensus on an e-commerce moratorium has once again exposed deep divisions in global digital trade governance. This would have been a global agreement among WTO members that bans customs duties being applied to electronic transmissions such as digital downloads and streaming.
What was intended to provide certainty for cross-border digital trade remains unresolved, reflecting a widening gap between countries that favour openness and those seeking to preserve policy space.
Yet the deadlock has not led to inaction. Frustrated by the stalemate at the WTO, a group of 66 pro-moratorium countries is shifting strategy. Rather than waiting for consensus, they are embedding permanent moratorium commitments into unilateral agreements.
This is not merely a workaround. It is a deliberate attempt to shape global rules outside the WTO while gradually increasing pressure on holdouts such as India and Brazil, which oppose a permanent moratorium to preserve future policy space. The message is clear. If the WTO cannot deliver certainty, rulemaking will move elsewhere.
Against this backdrop, Indonesia’s silence at MC14 is striking. In previous negotiations, Indonesia stood firmly alongside India and South Africa in opposing a permanent moratorium on e-commerce tariffs. The rationale was consistent. Indonesia sought to preserve policy space, ensure statistical oversight of digital trade, and maintain the ability to protect the domestic industry when necessary.
This position was not only rhetorical but also grounded in domestic law. Under Law 10 of 1995 on Customs, both tangible and intangible goods entering Indonesian territory are treated as imports and are, in principle, subject to customs duties. Indonesia has even assigned a specific tariff heading for intangible goods in Chapter 99 of its customs tariff schedule.
This reflects a clear policy stance. Digital products are not beyond the scope of trade regulation.
Why then the sudden quiet?
Indonesia’s new silence on this issue at MC14 is less a shift in principle than a reflection of constrained choices.
The recent trade deal with the United States includes provisions that support or align with a permanent moratorium. In one such provision, Indonesia commits not to impose customs duties on electronic transmissions and signals support for a multilateral permanent moratorium.
Although these commitments are not yet been ratified, they already narrow Indonesia’s room to manoeuvre. Taking an openly oppositional stance at the WTO would risk undermining its credibility in ongoing negotiations. Meanwhile, India’s continued resistance means that a permanent agreement remains unlikely in the near term. Even in this Ministerial Conference round, additional resistance from Brazil has contributed to a deadlock over extending the moratorium.
Silence, therefore, becomes a pragmatic compromise — avoiding confrontation while preserving flexibility.
In the short term, this approach carries a limited cost. As long as India – and now Brazil – maintain opposition, consensus at the WTO will remain out of reach. Indonesia can remain noncommittal without materially affecting the outcome.
The longer-term outlook, however, is far less comfortable.
As multilateral negotiations stall, pro-moratorium countries are accelerating efforts outside the WTO. By locking in commitments through bilateral and plurilateral agreements, they are building a parallel system of digital trade rules. Over time, this could create a critical mass of countries bound by similar obligations, making a permanent moratorium the de facto global standard, even without a formal WTO consensus.
If that happens, Indonesia risks being sidelined. Its long-standing objective of preserving policy space could be eroded not through negotiation, but through gradual external pressure. Rules that Indonesia once actively debated may instead be shaped without its meaningful participation.
Silence is not neutral. It has consequences.
Part of the constraint comes from Indonesia’s own policy choices. Its current silence is closely linked to commitments made in the trade deal with the United States. This raises an important question. Should Indonesia continue along this path, or should it seek ways to preserve greater flexibility?
One option is to revisit how these commitments are framed. Recent discussions following a US Supreme Court decision that declared Trump’s reciprocal tarrifs invalid, have opened the possibility of revising Indonesia’s applied tariff schedule, including the treatment of electronic transmissions. While this may appear technical, it creates a potential entry point to recalibrate Indonesia’s position.
Rather than committing to a blanket prohibition on customs duties, Indonesia could adopt more calibrated language similar to that used in its agreements with the European Union. By committing not to impose duties in line with WTO agreements, Indonesia can signal compliance while maintaining a legal link to the multilateral framework. This approach preserves flexibility if global rules evolve.
In practical terms, this also means revisiting provisions in existing trade deals that go beyond Indonesia’s traditional position. Aligning them with a more flexible and WTO-linked formulation would reduce the risk of locking in commitments that may prove costly in the future.
At the same time, Indonesia must prepare for a less favourable scenario. If a permanent moratorium becomes unavoidable, whether due to the ratification of existing trade deals or the success of proponent countries at the WTO, passive acceptance is not an option.
In that scenario, Indonesia’s priority should shift from opposition to influence. One immediate step is to advocate for a built-in review mechanism in any future agreement. The moratorium would be periodically extended, allowing for adjustment. A permanent arrangement without review would remove this flexibility and constrain future policy choices.
A review mechanism would ensure that the moratorium can be reassessed in response to technological developments, fiscal needs, and industrial priorities. It would also provide a safeguard against locking in rules that may become outdated in a rapidly evolving digital economy.
Changing global trade landscape
Ultimately, the issue is not simply whether Indonesia supports or opposes the proposed e-commerce tariffs moratorium. It is also about how Indonesia navigates a changing global trade landscape where rules are now increasingly shaped outside traditional multilateral forums.
Silence may buy time, but it cannot substitute for strategy. Indonesia must decide whether it will continue defending policy space or adapt to an increasingly open digital trade regime. More importantly, it must ensure that whichever path it chooses is backed by a clear and proactive strategy before the rules are written without it.
The views expressed are solely those of the authors and do not necessarily reflect the positions of any affiliated institutions.
