PHILIPPINE trade officials hailed the decision of the World Trade Organization (WTO) to eliminate the tariffs on a total of 201 products being manufactured under the information technology (IT) sector.
The decision follows an accord reached by 54 WTO members last July 18 and was confirmed in a meeting held last July 24 at the WTO headquarters in Geneva, Switzerland.
Officials of the Department of Trade and Industry (DTI) said the accord will greatly benefit the Philippines.
Trade of IT products has been pegged at a hefty $1.3 million, according to DTI Undersecretary Adrian Cristobal. “Philippine trade of these products in 2013 amounted to $26 billion, with exports reaching more than $14 billion,” he said.
Among the products covered under this accord are new generation semiconductors, static converters, video games, and parts of automated electronic component machines in which the Philippines happens to be part of the regional and global production chains.
Cristobal said the Philippine electronics sector stands to benefit from the deal in terms of increased market access on export products due to the elimination of tariffs on targeted export markets such as the USA, Japan, the EU, Korea, and Chinese Taipei.
“Moreover, almost all imported raw materials and intermediate inputs and capital equipment requirements can be imported duty free. Once the ITA expansion is entered
into force, it will provide the Philippines with access to over 90 percent of global IT trade.
Furthermore, it will create jobs through increase in FDIs [foreign direct investment]and will help to boost GDP growth for our country,” Cristobal added.
Under the terms of the agreement, the tariffs will be eliminated on these products within three years, with reductions beginning in 2016.
By the end of October 2015, each of the participating members will submit to the other participants a draft schedule which spells out how the terms of the agreement would be met.
Participants will spend the coming months preparing and verifying these schedules. The objective is to conclude this technical work in time for the Nairobi Ministerial Conference in December.
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.
The agreement this month is an expansion of the 1996 Information Technology Agreement, which involves 81 members.
The Philippines became a party to the IT Agreement in 1997. 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.