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On 18 July 2015, the WTO reported that negotiators from 54 WTO members edged close to agreement on an accord which would expand the Information Technology Agreement (ITA) and eliminate tariffs on an additional list of roughly 200 products valued at about $1 trillion in annual trade. The products covered by the extension include new generation semi-conductors, GPS navigation equipment and medical equipment, including magnetic resonance imaging products and ultra-sonic scanning apparatus. The WTO release said:
The list of products and the draft declaration which spells out how the Agreement would be implemented have been sent to capitals for review. Members have until Friday at noon Geneva time to give final approval.
“This is a big deal,” said WTO Director-General Roberto Azevêdo. “The trade covered in this agreement is comparable to annual global trade in iron, steel, textiles and clothing combined. By taking this step, WTO members will help to provide a jump-start to the global economy and underline the WTO’s role as the central global forum for trade negotiations.”
While not all WTO members participated in these negotiations, all will benefit from the outcome because the participants will scrap duties on imports of these products regardless of which WTO member has produced them. Applying duties in a uniform and non-discriminatory manner across the WTO membership is known as the most favoured nation principle.
When the product list and draft declaration are approved, WTO negotiators will spend several months hammering out the technical details and the timetable for tariff elimination. The objective would be for all elements to be completed in time for Ministers of those members who are involved in this initiative to sign the ITA expansion agreement at the 10th Ministerial Conference in Nairobi in December. It would be the first tariff-cutting agreement in the WTO for 18 years.
The Information Technology Agreement was finalized in 1997 and covers 80 WTO members. Efforts to expand the coverage of this agreement were launched in 2012.
The Office of the U.S. Trade Representative USTR) issued a news release that said the “breakthrough opens the door for the swift conclusion of the first major tariff-cutting deal at the World Trade Organization (WTO) in 18 years.” According to USTR:
Negotiators began the latest round of negotiations on July 14th, ultimately producing a Declaration text and a final product list which were circulated today to all participants for final review and confirmation in capitals. In November 2014, an earlier bilateral breakthrough between President Obama and President Xi had paved the way to the result today.
Since the ITA went into force in 1997, global trade covered by the ITA has more than tripled, rising to more than $4 trillion in annual trade. Despite extensive advances in technology, however, the product scope of the agreement has never been expanded. More than 200 tariff lines will be reduced to zero under an expanded ITA. Medical equipment, GPS devices, video game consoles, computer software and next generation semiconductors are among the high-tech products that will see tariff elimination.
A sample of some of the impacted products and the size of the tariff reduction they would benefit from, include:
• Next generation semiconductors – Tariffs up to 25 percent reduced to zero.
• Magnetic Resonance Imaging (MRI) machines – Tariffs up to 8 percent reduced to zero.
• Computed Tomography (CT) scanners – Tariffs up to 8 percent reduced to zero.
• Global Positioning System (GPS) devices – Tariffs up to 8 percent reduced to zero.
• Printed matter/cards to download software and games – Tariffs up to 10 percent reduced to zero.
• Printer ink cartridges – Tariffs up to 25 percent reduced to zero.
• Static converters and inductors – Tariffs up to 10 percent reduced to zero.
• Loudspeakers – Tariffs up to 30 percent reduced to zero.
• Software media, such as solid state drives – Tariffs up to 30 percent reduced to zero.
• Video game consoles – Tariffs up to 30 percent reduced to zero.
An expanded ITA would also eliminate import duties on a range of additional technology products including high-tech medical devices, video cameras, and an array of high-tech ICT testing instruments.
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