U.S Led Effort Reaches ‘Major Breakthrough’ to Expand Information Technology Agreement
United States Trade Representative
July 18, 2015
Today, U.S. negotiators announced that a major breakthrough had been reached in talks to expand the Information Technology Agreement (ITA). U.S. negotiators have been working to facilitate ITA discussions among partner countries in order to reach an agreement that will support U.S. jobs and eliminate burdensome tariffs on technology exports, an industry in which U.S. is a world leader. Today’s breakthrough opens the door for the swift conclusion of the first major tariff-cutting deal at the World Trade Organization (WTO) in 18 years.
“We are very pleased with the breakthrough reached today in Geneva to expand the Information Technology Agreement (ITA). This will open overseas markets for some of America’s most competitive companies and workers,” said U.S. Trade Representative Michael Froman. “Building on the agreement between President Obama and President Xi last November, the United States led efforts to broker compromises among the other parties to find the path forward toward a final agreement. We are confident that all parties will now give formal approval to their participation in what would be the first tariff-elimination deal at the WTO in 18 years.”
Negotiators began the latest round of negotiations on July 14th, ultimately producing a Declaration text and a final product list which were circulated today to all participants for final review and confirmation in capitals. In November 2014, an earlier bilateral breakthrough between President Obama and President Xi had paved the way to the result today.
Since the ITA went into force in 1997, global trade covered by the ITA has more than tripled, rising to more than $4 trillion in annual trade. Despite extensive advances in technology, however, the product scope of the agreement has never been expanded. More than 200 tariff lines will be reduced to zero under an expanded ITA. Medical equipment, GPS devices, video game consoles, computer software and next generation semiconductors are among the high-tech products that will see tariff elimination.
Impact in the U.S.
Industry estimates have concluded that a successful expansion of the ITA agreement would:
· Support up to 60,000 additional U.S. jobs.
· Eliminate tariffs on roughly $1 trillion in annual global sales of information and communications technology products of which more than $100 billion now come from the United States.
· Many of the products that would see tariff elimination under an expanded ITA are in key U.S. industries that support good jobs, including in the manufacturing and technology sectors. A sample of some of the impacted products and the size of the tariff reduction they would benefit from, include:
o Next generation semiconductors – Tariffs up to 25 percent reduced to zero.
o Magnetic Resonance Imaging (MRI) machines – Tariffs up to 8 percent reduced to zero.
o Computed Tomography (CT) scanners – Tariffs up to 8 percent reduced to zero.
o Global Positioning System (GPS) devices – Tariffs up to 8 percent reduced to zero.
o Printed matter/cards to download software and games – Tariffs up to 10 percent reduced to zero.
o Printer ink cartridges – Tariffs up to 25 percent reduced to zero.
o Static converters and inductors – Tariffs up to 10 percent reduced to zero.
o Loudspeakers – Tariffs up to 30 percent reduced to zero.
o Software media, such as solid state drives – Tariffs up to 30 percent reduced to zero.
o Video game consoles – Tariffs up to 30 percent reduced to zero.
o An expanded ITA would also eliminate import duties on a range of additional technology products including high-tech medical devices, video cameras, and an array of high-tech ICT testing instruments.