US, WTO Partners Aim to Strike $1 Trillion in Duties Through ITA Expansion

The U.S. and its Information Technology Agreement partners struck a deal to open “the door for swift conclusion” of an ITA expansion deal in Geneva, said the Office of the U.S. Trade Representative in recent days. A finalized expansion would mark the first time World Trade Organization parties locked down a “major” accord to cut tariffs in nearly 20 years, said USTR (here). Many details remain unclear, but the accord will eliminate tariffs on roughly 200 products, said the WTO in a statement (here). Eighty countries are party to the ITA, including the European Union bloc.

The "new agreement will end tariffs on approximately $1 trillion worth of high-tech products, so its commercial significance is obvious," said Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce, in a news release (here). The ITA initially entered into force in 1996, but WTO members have failed to update the pact since despite significant changes in IT capacity globally. Negotiators edged close to an expansion deal in late 2014, but the U.S. and China couldn’t reach an agreement to polish off the talks (see 1412150011).

Products likely to now be part of the agreement, which aims to strike duties completely, include innovative semi-conductors, GPS navigation equipment and medical equipment, such as magnetic resonance imaging products and ultra-sonic scanning apparatus, the WTO said. “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.” The ITA agreement doesn’t factor in country of origin in its duty-free guarantees. Expansion will also cover printer ink cartridges, loudspeakers, video game consoles and a range of other products, said USTR.

Trade associations largely praised the breakthrough. “This is a very significant development, and we hope the new Friday deadline for national capitals' approvals will prove to be a mere formality,” said Sage Chandler, vice president of international trade at the Consumer Electronics Association, in a news release (here). “Once those approvals are in place, we expect the deal to be finalized at the WTO Nairobi Ministerial in December and implemented next July.” Dean Garfield, CEO of the Information Technology Industry Council, also applauded the WTO and USTR for shepherding through the expansion. "The progress made today in Geneva on the Information Technology Agreement is potentially seismic," Garfield said. "Once completed, ITA expansion will make history, representing the biggest tariff-elimination undertaking achieved by the WTO in nearly two decades."