IT tariffs to be cut in landmark deal

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World Trade Organization (WTO) members on Wednesday finalized a deal to cut tariffs on information technology (IT) products, agreeing on a reduction timetable that will benefit a $1.3-trillion global market.

The agreement, reached at the WTO’s Tenth Ministerial Conference in Nairobi, will eliminate tariffs on 201 IT products.

Negotiations were conducted by 53 WTO members, including both developed and developing countries, which account for approximately 90 per cent of global trade in these products.

All 162 WTO members will benefit from duty-free access to the markets of members eliminating IT tariffs. The list of 201 products was originally agreed upon in July 2015.
Products covered include new-generation semi-conductors, GPS navigation systems, medical products such as magnetic resonance imaging machines, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens.


The agreement also contains a commitment to work on 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.

“I am delighted to mark this breakthrough here today at the Ministerial Conference,” WTO Director General Roberto Azevedo said in a statement.

“This is a very significant achievement. Annual trade in these 201 products is valued at $1.3 trillion per year and accounts for approximately 10% of total global trade,” he added.
“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.”

For every product on the list, participants negotiated the level of reductions and over how many years tariffs would be eliminated. Approximately 65 percent of the 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. By 2019, almost all imports of the relevant products will be duty free.

“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,” Azevedo said.

The agreement is an expansion of the 1996 Information Technology Agreement that 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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