ITC Highlights Burdensome Customs Procedures in Digital Trade Report
Difficult customs procedures are among the notable impediments to digital trade, or trade via the Internet, according to a International Trade Commission (ITC) report entitled Digital Trade in the U.S. and Global Economies Part 1 (here). "Customs duties and complicated document preparation and processing can increase the costs associated with small online retail transactions, making it more difficult to conduct online business" especially for small- and medium-sized businesses, it said. The report notes that industry has pointed to low de minimis levels -- the value of an import shipment below which a company does not have to prepare customs documents -- as among the difficulties.
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The trade in products and services delivered via the Internet is on the rise globally and constitutes a growing portion of the U.S. economy, said the ITC. U.S. exports of digitally enabled services increased from $282.1 billion in 2007 to $356.1 billion in 2011, according to the ITC findings. The report predicts U.S. and global companies will increase participation in digital trade sectors that include communication services, entertainment, social networking, information search/retrieval, productivity enhancement and e-commerce. According to the report, all types of online content continue to grow, including music, games, videos, and books. Several industries, such as retail, logistics, financial, professional, healthcare and education services, benefit from lower costs and higher efficiency potential provided by internet technologies. The report also notes digital trade barriers and impediments to digital trade include localization requirements, divergent data privacy and protection rules, inadequate intellectual property protection and unclear legal frameworks, growing online censorship, and traditional impediments, in addition to burdensome customs procedures.
The report was published in July and publicly released Aug. 15. Part two is slated for publication in July 2014. The Senate Finance Committee requested the ITC to report on the digital trade role in both U.S. domestic and international commerce.