U.S., WTO Partners Agree on Expansion of IT Deal
The U.S. and more than 50 of its WTO partners announced on Dec. 16 a completed agreement to expand information technology that officials said they hope will generate economic growth by canceling hundreds of tariffs on IT exports around the world, the Office of the U.S. Trade Representative said (here). The first major tariff elimination deal at the WTO in 18 years will slash tariffs on hundreds of U.S.-origin technology products, and WTO estimates that expansion of the information technology agreement (ITA) will strike tariffs on approximately $1.3 trillion worth of yearly global exports of information and communications technology products, USTR said. Under the agreement, more than $180 billion in yearly U.S. tech exports will no longer face burdensome tariffs in “key markets around the globe,” USTR said. The original ITA was reached in 1996.
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Expanding the ITA "to cover a wide array of additional products promises to be a major boost to U.S. technology exports and the jobs that support them,” U.S. Trade Representative Michael Froman said in a statement. “It’s great news for the American workers and businesses that design, manufacture, and export state-of-the-art technology and information products, ranging from high-tech healthcare devices to advanced semiconductors to software media. It also importantly demonstrates that the WTO can deliver results with pragmatic approaches and helps build momentum for our ongoing talks in Nairobi. ITA expansion will eliminate hundreds of tariffs on billions of dollars in additional American technology exports all over the world.”
The expansion will cover 99 percent of the value of global information and communications technology (ICT) goods, and 80 percent of all product lines in this category, the United Nations Conference on Trade and Development said on Dec. 15 (here). An UNCTAD technical note titled “Trade in ICT Goods and the 2015 Expansion of the WTO Information Technology Agreement” (here) notes that the expanded list covers several goods not classified as ICT products under the original IT agreement, including medical appliances and electric conductors.
The additions to the agreement are "relevant to the use of information and communications technology for development because ICT goods generate a multitude of social and economic benefits, as shown in" recent reports (here) UNCTAD Deputy Secretary-General Joakim Reiter said in a statement. "Making ICTs more affordable, for example, by lowering import duties, can lead to higher adoption rates and increasingly complex applications. Beyond the ICT sector itself, ICTs can be used to boost the competitiveness of other sectors, such as automotive and business services, which have ICT goods as intermediate inputs, and enable participation in global value chains." After the agreement comes into force, exports from all of WTO’s 62 members, regardless of whether they were signatories, will receive duty-free treatment of listed goods in markets covered by the ITA, including items such as “new generation” semi-conductors, GPS’s, MRI machines, manufacturing tools to be used in 3-D circuit printing, telecom satellites, and touch screens, UNCTAD said.