Trade Officials Take Initial Steps in Drive to Cut Tariffs on IT Gear

GENEVA -- Trade officials are beginning to float ideas on how to classify and describe additional goods for tariff-free treatment under the WTO Information Technology Agreement (ITA), officials said following the start of informal talks. The World Trade Organization ITA Committee meeting in May (CD May 16 p6) agreed to begin meeting bilaterally and in small groups to start discussions on expansion, John Neuffer, a vice president at the Information Technology Industry Council, told us May 23. “So the train is moving forward.”

Talks are informal and preliminary, officials said following a morning meeting Thursday. Technical discussions continued during the afternoon, a spokesman with the U.S. Mission said. U.S. officials declined our request for further information about the meeting. Several participants at the morning meeting weren’t aware of further technical meetings scheduled for Thursday and Friday. Several officials were either absent or filling in for others on Thursday morning and weren’t very familiar with the agreement.

Participants discussed next steps for exchanging views on which products to include in talks to expand product coverage under the ITA, said an official. General topics, not any of the specific draft lists of products, were discussed during the morning meeting, he said. Participants provided updates on the status of domestic consultations with industry, the official said.

The meeting was a “stock-taking” of a group of delegations with a strong interest in the ITA review for expansion of product coverage, a source said. One question is how to handle the various product lists that are being developed, he said. He referred to possibly aggregating the lists into one as a basis to move forward. The various lists of goods being developed don’t appear to be formal proposals, but lists that have emerged from consultations, he said. They will likely be used initially to prompt discussion rather than negotiations, he said.

Five or more lists are expected, the source said. Lists are being developed or circulated by U.S. and Japanese industry associations, the European Union, Taiwan, and South Korea, officials and executives said in May. Talks Thursday on the products to possibly include in ITA expansion are “very informal,” an official said. Discussion Thursday morning was “very general,” she said. Discussions, for instance, didn’t get to the level of detail even for a general consideration of semiconductors, she said. Technical issues such as goods classification and coverage descriptions need to be addressed, the source said. He referred to consideration of the existing practice of both a positive list of tariff codes and general descriptions for possible use in the expansion. Defining the products is the “bread and butter” of the discussion, he said.

Another question is how to enlarge talks to the full list of countries that have signed onto the agreement, and to try to expand it to countries that aren’t yet party to it, a source said. An effort will be made to reach out to some important countries with “a certain weight in international trade” that aren’t yet party to the agreement, he said. He referred to South Africa, Mexico, Brazil, and Argentina. Russia is reviewing a draft schedule of tariffs prepared by the WTO secretariat, sources had said.

Non-tariff barriers (NTBs) weren’t discussed, an official said. Both product coverage expansion and NTBs are very important to the EU, said Tomas Baert, an EU spokesman. The EU backed the May 2 concept paper floated by the U.S. and other countries, he said. Preparations for a WTO symposium in May highlighted tariffs and downplayed NTBs perhaps to isolate the EU, an official said. The ITA review process covers both issues, Baert said.

The process is “very far” from the request-offer stage, a source said. An idea of what countries can put on the table, and what is problematic, is first needed, he said. The process will have to be accompanied by more-frequent meetings of the ITA Committee, he said. Further meetings of the ITA Committee haven’t been scheduled. The committee chairman is consulting with ITA members. The EU will host the next multilateral meeting, scheduled for June 25-26.