At least 53 WTO members representing major exporters of information technology products have agreed on the timetable for implementing the landmark deal to eliminate tariffs on 201 Information Technology products valued at over $1.3 trillion per year.
Negotiations were conducted by 53 WTO members, including both developed and developing countries, which account for approximately 90 percent of world trade in these products.
“I am delighted to mark this breakthrough here today at the Ministerial Conference,” WTO Director General Roberto Azevêdo said. “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 percent of total global trade.”
This breakthrough follows months of intensive negotiations among the ITA participants.
Their review of “draft schedules” involved a process whereby each of them indicated over what timeframe and how they intended to implement the elimination of duties on these products.
The deal which was concluded late Wednesday night and included China and the United States which have delayed its conclusion for the past 18 years.
“The United States and over 50 developed and developing country partners at the World Trade Organisation announced a landmark expansion of the Information Technology Agreement that will generate economic growth by phasing out hundreds of tariffs on information technology exports all over the world,” US Trade Representative Michael Froman said a statement.
Earlier Wednesday China and the US had failed to agree even after calling the press at JKIA but later went back to the negotiating table and approved the deal.
“I think you should know this by now that we have an approval for the Information Technology Agreement. So contrary to what was in the headlines today, nothing has failed on this and we don’t expect anything to fail,” Foreign Affairs Cabinet Secretary and the Chair of WTO meeting Amina Mohamed said on Thursday during a media briefing.
The deal does not only benefit the 53, but all 162 WTO members who will also benefit from the agreement, as they will all 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.
Eliminating tariffs on trade of this magnitude will have a huge impact as it will support lower prices, including in many other sectors that use IT products as inputs as well as help create jobs and it will help to boost GDP growth around the world.
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.
“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,” the WTO Director General said.
Among the products covered in this agreement are new-generation semi-conductors, GPS navigation systems, medical products which include magnetic resonance imaging machines, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens.
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.