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Cheaper IT products seen after WTO deal

By: - Reporter / @amyremoINQ
/ 01:43 AM December 18, 2015

MEMBER states of the World Trade Organization (WTO), including the Philippines, have concluded a landmark trade deal that will see the elimination of tariffs on 201 information technology products valued at over $1.3 trillion per year.

In a statement, the WTO said members have agreed on the timetable for implementing the trade pact last Wednesday at the WTO’s Tenth Ministerial Conference in Nairobi.

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“This is a very significant achievement,” said WTO Director General Roberto Azevêdo. “Annual trade in these 201 products is valued at $1.3 trillion per year, and accounts for approximately 10 percent of total global trade. Eliminating tariffs on trade of this magnitude will have a huge impact. It will support lower prices—including in many other sectors that use IT products as inputs—it will create jobs and it will help to boost GDP growth around the world.”

“This agreement is the first major tariff-cutting deal at the WTO since 1996—and it comes fast on the heels of the historic Bali Package. We now have two deals in two years which deliver real, economically significant results. I hope that this success will serve to inspire progress elsewhere in our work,” Azevêdo added.

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Negotiations were conducted among 53 WTO members, but all 162 WTO members are expected to benefit from the expanded Information Technology Agreement (ITA) as they will enjoy duty-free market access to the markets of the members eliminating tariffs on these products.

The list of 201 products was originally agreed by the ITA participants in July 2015. Among the products covered in this agreement are new-generation semi-conductors, GPS navigation systems, medical products which in clude magnetic resonance imaging machines, machine tools for manufacturing printed circuits, telecommunications satellites and touch screen units.

For every product on the list, ITA participants have negotiated the level of reductions and over how many years these tariffs will be fully eliminated.

As a result of these negotiations, approximately 65 percent of tariff lines will be fully eliminated by July 1, 2016. Most of the remaining tariff lines will be completely phased out in four stages over three years. This means that by 2019 almost all imports of the relevant products will be duty free, the WTO said.

According to the WTO, the agreement also contains a commitment to work to tackle non-tariff barriers in the IT sector, and to keep the list of products covered under review to determine whether further expansion may be needed to reflect future technological developments.

The agreement is an expansion of the 1996 Information Technology Agreement which involves 82 members. In 2012, members recognized that technological innovation had advanced to such an extent that many new categories of IT products were not covered by the existing agreement. Negotiations began in 2012 to expand the coverage of the accord.

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TAGS: Business, deal, economy, IT, pact, Product, tariff, Trade, World Trade Organization, WTO
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