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WTO Members Agree Timetable For Cutting IT Tariffs

by Mike Godfrey, Tax-News.com, Washington

17 December 2015


World Trade Organization members have agreed a timetable for the implementation of a landmark deal to eliminate tariffs internationally on 201 IT products.

In 1996 the WTO eliminated tariffs on a number of technology products, such as semiconductors, computers, and telecommunications equipment under the Information Technology Agreement (ITA). However, the agreement was never expanded, despite substantial technological advances.

An agreement on expanding the ITA was reached in July 2015. The negotiations were conducted by 53 WTO members, but all 162 WTO members will benefit from the agreement, as they will all enjoy duty-free market access to the markets of the members eliminating tariffs on these products.

WTO Director General Roberto Azevêdo noted that the items included in the agreement account for approximately 10 percent of global trade. "Eliminating tariffs on trade of this magnitude will have a huge impact. It will support lower prices – including in many other sectors that use IT products as inputs – it will create jobs, and it will help to boost GDP growth around the world," he said.

For every product on the list, ITA participants have agreed the level of reductions and time frames for the duties' removal.

Approximately 65 percent of tariff lines will be fully eliminated by July 1, 2016. Most of the remaining tariff lines will be completely phased out in four stages over three years. This means that by 2019 almost all imports of the relevant products will be duty-free.

Azevêdo said: "This agreement is the first major tariff-cutting deal at the WTO since 1996 – and it comes fast on the heels of the historic Bali Package. We now have two deals in two years which deliver real, economically significant results. I hope that this success will serve to inspire progress elsewhere in our work."

Among the products covered in this agreement are new-generation semi-conductors; GPS navigation systems; medical products, including magnetic resonance imaging machines; machine tools for manufacturing printed circuits; telecommunications satellites; and touch screens.

TAGS: tax | free trade agreement (FTA) | export duty | tariffs | World Trade Organisation (WTO) | manufacturing | import duty | trade

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