The European Union, the United States, China and the vast majority
of the World Trade Organization (WTO) members that were participating in
the negotiations agreed today to eliminate custom duties on 201
high-tech products. The extension of the 1996 Information Technology
Agreement (ITA) is the biggest tariff-cutting deal in the WTO in almost
two decades. The agreement initiated and brokered by the EU, will
benefit both consumers and firms alike by removing customs duties on a
wide range of goods, including medical equipment, video games and
consoles, home hi-fi systems, headphones, blue-ray/DVR players,
semi-conductors, and GPS devices. All in all, the deal will cover €1
trillion in global trade, covering close to 90% of world trade in the
products concerned. A total of 54 WTO members[1] negotiated the expansion of the ITA. A limited group of countries is expected to confirm its participation in the coming days.
"This is a great deal for consumers, and for companies big and small" said EU Trade Commissioner Cecilia Malmström. "We’ve
worked hard to broker this compromise between different countries and
to find the best solutions for Europe. This deal will cut costs for
consumers and business – in particular for smaller firms, which have
been hit especially hard by excessive tariffs in the past. Just as
important, this deal shows how we can use the EU’s trade policy to
encourage innovation in the IT sector – a part of our economy that is
crucial for Europe's growth and for creating jobs."
The Commissioner added: "This
major achievement adds much-needed momentum to the World Trade
Organization. It clearly shows that countries around the world can work
together to achieve solutions that benefit everyone. I count on other
countries joining soon. And looking ahead, this agreement is an
inspiration to step up our efforts in the run-up to the WTO ministerial
in Nairobi in December. That will be the 'make or break' meeting for the
Doha development round – it will be the last chance to conclude it."
The
new, expanded ITA agreement concluded today will reduce the costs for
consumers and for manufacturing IT products in Europe. It will offer new
market access for many of Europe's high tech companies – some of which
are leaders in their fields – and encourage innovation by simplifying
access to state-of-the-art technology. As such, it will contribute to
the further development of the digital economy in the EU.
The role of the EU...
The
EU made the original proposal back in 2008 to review and expand the
ITA. Other WTO members finally took up the proposal in 2012, when
negotiations started. From the outset, the EU proposed liberalising a
wide range of goods, including consumer goods with relatively high
tariffs in the EU (up to 14%), such as set top boxes, video cameras and
cathode ray tube monitors. The EU then played a key role in brokering
compromises throughout the negotiations, and chaired the last three
negotiating rounds.
Background on ITA expansion
Tariffs
will be eliminated within 3 years from the date of application of the
agreement, which is foreseen for 1st July 2016. For sensitive products
longer phase-out periods will be negotiated to give industry time to
adapt to a zero-tariff environment The EU has a trade surplus in the
products covered of around € 15 billion. The deal will not cover certain
electronic products subject to duties in the EU, such as certain
monitors, projectors, non-digital car radios as well as TVs.
The
extension of the ITA aimed at broadening the original Information
Technology Agreement between Members of the World Trade Organisation
(WTO), which came into force in 1997. A total of 54 WTO members negotiated the expansion of the ITA.
Under the original ITA, participants eliminated all customs duties on IT products such as computers, telephones, digital cameras and their parts. Since the ITA was completed and entered into force in 1997, trade in the sector has quadrupled. In May 2012 a number of participants started negotiations to expand ITA to new products. The new agreement will substantially expand the range of products covered, that include consumer and other finished products, parts and components, and machinery used in the manufacturing of IT products (enclosed a summary of the products covered by the ITA expansion).
Commissioner Cecilia Malmström on Twitter
Under the original ITA, participants eliminated all customs duties on IT products such as computers, telephones, digital cameras and their parts. Since the ITA was completed and entered into force in 1997, trade in the sector has quadrupled. In May 2012 a number of participants started negotiations to expand ITA to new products. The new agreement will substantially expand the range of products covered, that include consumer and other finished products, parts and components, and machinery used in the manufacturing of IT products (enclosed a summary of the products covered by the ITA expansion).
Commissioner Cecilia Malmström on Twitter
ITA-expansion product list, explained
The expansion list covers both consumer and other finished products as well as components and manufacturing equipment.
Examples of finished products
- Multimedia products (GPS, DVD players, smart cards, optical media)
- Multifunctional printing and copying machines, ink cartridges
- Electronics (TV-cameras, video recording, digital car radios, set top boxes)
- Medical equipment: sophisticated medical equipment such as scanners, machines for magnetic resonance imaging, tomography or dental care and ophthalmology
- Video games and consoles
- Routers and switches, microscopes and telescopes
- Weighing and money-changing machines
- Loudspeakers, microphones and headphones
- Telecommunication satellites
Examples of parts and components
- Parts and components for production of IT goods and semiconductors, including TV parts and parts and other machinery incorporated in IT products, from smartphones to optical or medical equipment. This includes e.g. lasers, LED modules, touch screens, measuring and weighing instruments, switches, electromagnets, amplification apparatuses, etc.
- Multicomponent integrated circuits (MCOs), which are the latest and future generation chips included in many electronic and other products: over 30 tariff lines included
- Instruments for aeronautical and space navigation
Machinery for production of IT goods and semiconductors
- Machine tools for the manufacture of printed circuits or semiconductors and other IT products, filtering machines, and their parts
[1]
The European Union and its 28 Member States; Albania; Australia;
Canada; China; Colombia; Costa Rica; Guatemala; Hong Kong, China;
Iceland; Israel; Japan; Korea; Malaysia; Mauritius; Montenegro; New
Zealand; Norway; the Philippines; Chinese Taipei; Singapore;
Switzerland; Thailand; Turkey; and the United States.
