WTO Reaches Agreement on New ITA

An agreement has been reached among 54 World Trade Organization (WTO) members which would expand the Information Technology Agreement (ITA) and eliminate tariffs on an additional list of approximately 200 products, valued at about $1 trillion in annual trade.

The products covered by the extension include new generation semi-conductors, GPS navigation equipment and medical equipment, including magnetic resonance imaging products and ultra-sonic scanning apparatus. The full list of products and the draft declaration which sets out how the Agreement would be implemented have been sent to the member country capitals for review, with a deadline for approval on noon (Geneva time) on Friday 24th July.

Negotiations to expand the 1996 ITA had been blocked by some countries reluctant to open their markets to more imports, but in intense negotiations led by WTO Director General Roberto Azevedo, the outstanding differences between a handful of countries were bridged.

The accord has been welcomed by many organisations and trade negotiators alike, who have long lobbied for a relaxation in the imposition of tariffs on high-tech goods. DigitalEurope’s Director General, John Higgins, said: “All parties in the talks are to be congratulated. They have paved the way for a deal that will have a major boost to the global trade in tech products, many of which didn’t exist when the first ITA was signed”.

When the product list and draft declaration are approved, WTO negotiators will spend several months “hammering out” the technical details and the timetable for tariff elimination. The objective would be for all elements to be completed in time for Ministers of those members who are involved in this initiative to conclude the ITA expansion agreement at the 10th Ministerial Conference in Nairobi in December. It would be the first tariff-cutting agreement in the WTO for 18 years.

Analyst Comment

Of course, the last LTA from 1996 was the source of the disputes between the display industry and the European Commission over the duty that was payable on monitors, until the issue was finally resolved by the WTO and the courts. The reporting of the draft agreement suggests that LCD panels will be freely shippable, although OLED panels have not been identified as far as we can tell. TVs are likely to remain dutiable, we think, although, of course, the EU and Korea have a deal on free trade that has seen a reducing level of duty for imports from Korea that will be completed next summer. (BR)