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INFORMATION TECHNOLOGY (IT) PRODUCTS 
Free trade for a dynamic trade sector

A WTO agreement is helping push the information technology revolution forward. At the beginning of this year, most of the world trade in information technology products (worth $769 billion in 1999 for office and telecom equipment, a large part of which are IT products) became completely free of tariffs under the WTO Information Technology Agreement (ITA). This agreement has been reducing customs duties on IT products such as computers and telecom equipment since 1997, and benefiting offices and consumers across the globe through lower prices.

From the 29 participants that negotiated the ITA during WTO’s First Ministerial Conference in Singapore in December 1996, membership has now risen to 56 that account for 93% of world trade in IT products. The new participants include many developing countries, transition economies and even governments currently negotiating their WTO membership. At an IT symposium organized by the WTO Secretariat in July 1999, several industry representatives attested to the dynamic role of information technology in promoting economic growth in developing countries.

Participation in the ITA means that the country must eliminate tariffs and all other duties and charges on covered IT imports from all WTO members by 1 January 2000. Some participants have been granted longer implementation periods for a few products. The agreement lists in two annexes the products covered, which can be grouped into the following six categories: computers, software, telecom equipment, semiconductors, semiconductor manufacturing equipment and scientific instruments.

Talks on expanding the product coverage (or “ITA II”) began in 1997 when participants began proposing additional IT products for tariff elimination. Negotiations intensified in 1998 during which some participants tabled a joint ITA II list. The talks, however, failed to produce an ITA II list acceptable to all participants. One point of contention was the proposed addition of certain electronic consumer goods that are also used with computer products.

At the Seattle Ministerial Conference, there were reports of movement towards an ITA II deal. Since then, consultations among delegations on ITA II have continued, and another attempt for ITA II at the Doha Ministerial cannot be discounted.

The current ITA deals only with the elimination of tariffs and not with other trade barriers. At the WTO’s IT symposium in 1999, industry representatives complained that different national safety standards and import licensing requirements have resulted in additional shipment costs — through delays and additional paperwork — that have reduced the benefits of ITA tariff cuts. In the ITA Committee, participants have agreed to examine non-tariff barriers.

In November 2000, the ITA Committee approved a one-year work programme on non-tariff measures (NTMs) facing IT products. During the first phase, the Committee will compile an inventory of NTMs that have been identified by participants as impediments to trade in ITA products. During the second phase, participants will examine the economic and developmental impact of such measures on trade in IT products and the benefits which would accrue to participants from addressing their undue trade-distorting effects. The third phase would be completed by November 2001 when the committee meets to consider the outcomes of Phase I and II.

So far, the following NTMs have been nominated for consideration by the committee: divergent national standards and regulatory procedures or “type approval” — Australia; regulatory environment and the level of regulation, disparity of national standards, conformity assessment and testing requirements, customs procedures — European Union; stringent rules of origin requirements — Mauritius; cumbersome conformity assessment procedures and excessive technical standards — Hong Kong, China; origin requirements — Japan; different national conformity assessment requirements and import licensing requirements — Canada.

Leading traders in office and telecom equipment, 1999 back to top
(US$ billions)

ITA participants back to top

Albania; Australia; Bulgaria; Canada; Costa Rica; Croatia; Cyprus; Czech Republic; El Salvador; Estonia; European Communities (and its 15 member states); Georgia; Hong Kong, China; Iceland; India; Indonesia; Israel; Japan; Jordan; Korea; Kyrgyz Republic; Latvia; Lithuania; Macao, China; Malaysia; Mauritius; New Zealand; Norway; Oman; Philippines; Poland; Romania; Singapore; Slovak Republic; Slovenia; Switzerland (with Liechtenstein); Chinese Taipei; Thailand; Turkey; United States.