Countries Report Steady Progress on Implementing Tariff Cuts on ICT Goods

3 November 2016

A group of WTO members who agreed last year to eliminate duties on a series of information and communication technology (ICT) goods are making steady progress in doing so, sources say, with three-quarters of participants already having enacted their new commitments.

To date, 18 participants of the WTO’s expanded Information Technology Agreement (ITA-II) have submitted revised tariff schedules to the global trade body. These include China, which sources say was the latest to do so, as well as the United States. The accord has a total of 24 participants, counting the 28-nation EU as one.

Under the revised ITA, the tariff reductions are due to be implemented in four progressive cuts: the first by 1 July 2016; the second by 1 July 2017; the third by 1 July 2018; and the final one by 1 July 2019. However, some products are due to see tariff elimination over a longer period – in other words, up to five or seven years.

The updated version of the accord covers over 200 additional products, ranging from video game consoles to new-generation semi-conductors, with some estimates suggesting that the value of goods covered under the deal are worth US$1.3 trillion in annual exports. The participants who have signed onto the ITA-II are responsible for around 90 percent of trade in these goods.

Sources say that the updated accord is also drawing interest from possible new participants, including Macao, one of China’s special administrative regions.

Landmark IT deal

At last year’s WTO Ministerial Conference in Nairobi, Kenya, ministers from this group finalised negotiations for what is known as the expansion of the Information Technology Agreement. While the original accord has been in force since 1996, various items on it are no longer in use, prompting the negotiations for an updated version. (See Bridges Daily Update, 16 December 2015)

Both the ITA and ITA-II are “plurilateral” agreements under the umbrella of the WTO: while they do not count the full organisation’s membership as participants, any tariff cuts adopted by participants of either the ITA or ITA-II are extended to the entire global trade body.

The landmark accord marked the first tariff-cutting agreement that had been reached under the WTO in nearly two decades, and took various years to negotiate, having stumbled repeatedly as participants worked to agree on a final list of products; the timeframe for phasing out tariffs; and other related subjects.

Proponents say that the deal will not only provide an economic boost, but could be a useful confidence-builder for the global trade body, in light of the overall difficulties seen over the years in achieving negotiated outcomes in other areas.

ICTSD reporting.

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