WTO talks end in deadlock after Brazil blocks deal

World Trade Organization talks have ended in deadlock after Brazil blocked a bid by the US and other countries to secure an extension to a moratorium on customs duties for electronic transmissions like digital downloads.

The talks at a WTO meeting in Cameroon were seeking to bridge differences over extending the e-commerce moratorium, and agree to a plan for broader reform of the organisation.

Ministers there had been trying to extend the moratorium, which is due to expire this month, by four years plus an additional buffer year to 2031, diplomats said.

Talks would now continue in Geneva after the impasse on prolonging the moratorium, WTO conference chair Luc Magloire Mbarga Atangana said.

Britain's business and trade secretary Peter Kyle said the failure to get an agreement was "a major setback for global trade".

"This is not the outcome we wanted. The UK worked hard to deliver the change that WTO needs and the failure to get a collective decision this week is a major setback for global trade," Kyle said in a statement.

In what is seen as a test for the WTO's relevance, after a year of trade turmoil and major disruptions due to the Iran war, diplomats said ministers got stuck on extending the moratorium beyond more than two years following objections from Brazil.

Diplomats had been working throughout Sunday to close the gaps between Brazil, which had originally sought a two year extension, and the US which wanted a permanent extension, by drafting a proposed document of a four year extension with a one year sunset buffer, concluding in 2031.

Brazil later proposed a four year extension, with a review clause half way through, however, that was not supported, two diplomats told Reuters.

A US official said Brazil had opposed a "near-consensus document".

"It's not US vs Brazil. It's Brazil and Turkey v 164 members," a US official said.

"The US wanted the sky," a Brazilian diplomat told Reuters, adding that Brazil wanted to remain prudent in renewing the moratorium by two years, like in previous ministerial conferences.

"In four or five years' time, no one will be able to predict what e-commerce will be about, and this has an influence on a number of countries' policies," they added

Another diplomat said that US Trade Representative Jamieson Greer made delegates "uncomfortable" as he suggested there "would be consequences", if the US did not get a long-term extension to the moratorium.

Business leaders say an extension is vital to guarantee predictability, fearing duties could otherwise be introduced. It is also seen as key to securing US support for the WTO.

After initial resistance from some WTO members, a new draft of the reform roadmap, that provides a timeline for progress and sets out the key issues to address was close to being agreed, three diplomats said.

Those include improving decision-making in a consensus-based system that has long been stymied by a few countries, and the trade benefits extended to developing countries.

A declaration on reform will also be sent to Geneva for further discussion, the WTO conference chair said.