A tariff is
|“||[c]ustoms duties on merchandise imports. Levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kgs.). Tariffs give price advantage to similar locally-produced goods and raise revenues for the government.||”|
A tariff is
|“||a document which lists a public utility services and the rates for those services. A tariff has the same force and effect as a statute, and it becomes state law.||”|
Normally, a country will impose a tariff — which has the effect of raising the price of imports relative to similar domestic products — as a way of protecting a domestic industry. Through customs duties or tariffs, countries impose a differential burden at the border, which often has the effect of disadvantaging imports.
The imposition of tariffs on electronic transmissions presents a unique situation. Electronic transmissions — consisting of bits and bytes, zeros and ones — encompass transnational data flows and the content embedded in that data. For instance, an electronic transmission could include digitally-transmitted products ordered via the Internet (such as downloadable software), but would not include goods ordered via the Internet that were physically delivered (such as a camera or a book). Unlike physical goods, the bits and bytes of an electronic transmission are not readily identifiable and, traveling in cyberspace, do not “stop” at the border.
The U.S. policy over the past 50 years has been to use international mechanisms to progressively lower duties and eliminate trade distortions. In line with this policy, the U.S. Government has been at the forefront of the effort in the World Trade Organization (“WTO”) to promote a moratorium on the imposition of customs duties on electronic transmissions, which includes digitally-transmitted products (not physical goods) ordered via the Internet. Member governments of the WTO adopted such a moratorium on a temporary basis in May 1998.