Brussels, 29/07/2015 (Agence Europe) - On Tuesday 28 July, the WTO announced that Taiwan and Thailand had confirmed their acceptance of the revised Information Technology Agreement (ITA), which seeks to extend the list of products covered by the ITA to a further 200 new hi-tech products.
EU Ambassador to the WTO Angelos Pangratis, who chaired the most recent round of talks on the revision of the ITA agreement in July, told a meeting of the WTO's General Council on 28 July that Taiwan and Thailand, two key producers of IT products, had accepted the agreement reached on 24 July at the WTO (see EUROPE 11366).
54 WTO member countries took part in the negotiations that sought to extend the list of products covered by the 1996 ITA. Almost all of them have now confirmed that they have agreed to the list of the 200 new products on which customs duties will be reduced to zero.
The list of new products covered, includes new generation semiconductors, GPS navigation systems, medical products such as magnetic resonance imaging material and ultrasound scan equipment, machine tools used to manufacture printed circuits, telecommunication satellites and touch screens.
The annual trade in these products is estimated to be around $1,300 billion and accounts for 7% of all world trade. This exceeds global trade in the automobile industry as well as cumulated world trade in textiles, clothes, iron and steel.
Under the terms of the revised agreement, the majority of custom duties will be removed on these products within a three-year timeframe and reductions will begin to be introduced in 2016.
By the end of October, each of the participating countries will present to the other participants a draft list of the modalities for applying the provisions of the agreement. The aim is to formally sign the revised ITA agreement at the 10th ministerial WTO conference in Nairobi next December.
The revised ITA brings advantages to all WTO countries because it will be implemented on the basis of the most favoured nation status, which means that the exports of the products covered in all WTO countries will be able to benefit from special duty-free treatment in the markets of participating countries. The agreement is also open to all WTO member countries, irrespective of whether they have participated in the negotiations up to now.
The participants have also agreed to meet up in January 2018 at the latest for a re-examination of the list of products covered or to update this list, if need be, in order to take into account future technological developments and incorporate additional products. The agreement also includes a commitment to working towards the removal of nontariff barriers in the information technology sector.
The revised ITA will take effect when the participants accounting for around 90% of world trade in these products have their respective draft lists approved. This threshold is expected to be reached by the time of the Nairobi conference. This development is the first of its kind to involve a tariff reduction agreement at the WTO in 18 years. (Emmanuel Hagry)