EU Proposes Major Update To IT Trade Pact

by Ulrika Lomas, for LawAndTax-News.com, Brussels

17 September 2008

The European Commission presented at the World Trade Organisation (WTO) on Tuesday its proposal to update and expand the Information Technology Agreement (ITA), an existing trade deal between some of the world's biggest trade powers that lowers the cost of IT products.

The proposal would take account of new products that have entered the market since the agreement was originally concluded in 1996, eliminating customs duties for these goods.

Further points considered are tackling non-tariff barriers "behind the border," as well as the problems caused by the non-functioning of some of the mechanisms and procedures provided for in the current ITA. The Commission hopes that other WTO members will engage in discussions in the near future.

EU Trade Commissioner Peter Mandelson commented:

"The ITA remains a milestone duty-free agreement. But it risks being left behind after twelve years of technological development. We need an ITA for the 21st century that will continue to benefit our consumers and businesses."

The European Commission has argued for some time that the ITA should be updated. The EC believes that the current agreement has reached its limits in solving issues such as the elimination of non-tariff barriers, the expansion of product coverage to take account of technological evolution and convergence, and the expansion of its membership to include all major IT producing countries.

Also, the Commission is seeking a prompt launch and conclusion of negotiations to update the ITA within a matter of months, not years. Such a move would provide an additional boost in trade in these products and be the best way to address the increasing challenges of technological development and convergence.

In addition to this, the Commission has maintained that a change in ITA criteria can only be made on the basis of consensus amongst all ITA participants, as provided by the agreement itself, and not as a result of litigation by some members.

The US, Japan and Chinese Taipei recently requested a WTO dispute settlement panel against the EU with respect to its tariff treatment of certain information technology products.

Recommended