These tariff
reductions will apply to all WTO members.The WTO Director-General, Mr
Renato Ruggiero hailed the ITA as "representing another very important success for
the multilateral trading system". He said:
"This
accord, which covers nearly $600 billion in world trade, means lower prices for consumers
and fewer barriers to the spread of technology that is so critical to the development of
all our members.
"The 40
governments have agreed to phase out all tariffs on computers, software, telecoms products
and semiconductors. They account for 92.5% of world trade in IT products, but the benefits
of this agreement extend well beyond the 40 and will indeed reach practically every
country on earth.
"Taken
together with the historic deal reached last month on trade in telecommunications
services, the ITA provides a springboard for economic growth and development in the 21st
century. WTO agreements to liberalize trade in these two sectors, which collectively are
the lifeblood of the world economy, amounts in quantitative terms to a new trade round.
"In
statistical terms, these two accords cover international business worth over a trillion
U.S. dollars, which is roughly the equivalent of world trade in agriculture ($444 billion
in 1995), automobiles ($456 billion) and textiles ($153 billion) put together. This is
indeed an impressive achievement.
"But the
importance of the agreement goes well beyond statistics. The impact of these agreements on
improved living standards for the world's citizens should not be underestimated. The
computers, semiconductors, telecoms hardware and computer software that are included in
the ITA are the conduit for the delivery of information. By making such products more
affordable, we move one step closer to the vision of a telephone in every village of the
world. The ramifications of such an achievement to the health and education of those in
the poorest countries are obvious.
"We must
now turn our attention to the third leg of the three big negotiations we have scheduled
for 1997: financial services. But given the spirit of good will and compromise our members
have shown so far this year, I am confident we can have a successful outcome."
NOTE TO
EDITORS:
The WTO
Ministerial Declaration on Trade in Information Technology Products (ITA) was agreed at
the close of the first WTO Ministerial Conference on 13 December 1996 in Singapore. The
ITA provides for participants to eliminate customs duties and other duties and charges on
information technology products (contained in the annexes) by the year 2000, on an m.f.n.
basis (applied to all WTO members).
The
Declaration, however, provides that implementation is contingent on expanding ITA
participation to cover approximately 90 per cent of world trade in IT products by 1 April
1997.
The ITA
participants, on 26 March, agreed that this criterion had been met. They also established
a Committee on the Expansion of Trade in Information Technology Products, which will
monitor the implementation of the ITA, discuss and approve expansion of product coverage
and deal with requests from other countries to join in.
Participants
40 -
The 29 participants in Singapore (Australia, Canada, the 15 members of the European
Communities, Hong Kong, Iceland, Indonesia, Japan, Korea, Liechtenstein, Norway, Chinese
Taipei, Singapore, Switzerland, Turkey and United States) plus 11 other countries that
have come on board since then (Costa Rica, the Czech Republic, Estonia, Israel, India,
Macau, Malaysia, New Zealand, Romania, the Slovak Republic and Thailand). The 29
participants in Singapore accounted for about 83% of world trade in IT products; the
current 40 participants represent 92.5% of world trade in this sector. The ITA tariff
schedules of these governments have been approved by consensus. Approval for Panama and
Poland has been delayed because it has not been possible to conclude the negotiations with
trading partners. Two more WTO members, the Philippines and El Salvador, have indicated
their intention to join in the near future.
Tariff-reduction
timetable
The ITA
provides for the "staging" of tariff reductions in four equal rate reductions
(25% each time):
1st 1
July 1997
2nd 1
January 1998
3rd 1
January 1999
4th Complete
elimination of duties no later than 1 January 2000
In addition
to regular customs duties, the ITA Declaration also provides for the elimination of other
duties and charges (ODCs) by 1 July 1997 (except if otherwise specified in a participants
schedule).
Costa Rica,
Indonesia, India, Korea, Malaysia, Chinese Taipei and Thailand have been granted
flexibility in cutting their tariffs on a few products to zero after the year 2000 but not
beyond 2005.
IT tariffs in
the "Quad" countries are generally low but some duties reach as high as 17%.
Relatively high tariffs are concentrated in the telecom sector in the United States and
Canada, and on semiconductors in the European Communities. Many developing country
participants apply high tariffs on IT products, including more than 50 per cent in some
cases.
Product
coverage
World trade
in IT products is significant -- about $600 billion annually, or about 10.2 per cent of
world merchandise trade. There are six main categories of products covered by the
agreement:
1.
Computers (including complete computer systems and laptops
as well as the components such as CPUs, keyboards, printers, display units (monitors),
scanners, hard disk drives, power supplies, etc... )
2. Telecom
equipment (including telephone sets, videophones, fax machines, switching apparatus,
modems, and parts thereof, telephone handsets, answering machines, radio-broadcasting and
television transmission and reception apparatus, and pagers.)
3. Semiconductors
(include chips, wafers, etc... of various sizes and capacities)
4. Semiconductor
manufacturing equipment (include a wide variety of equipment and testing apparatus
used to produce semiconductors such as vapor deposition apparatus, spin dryers, etching
and stripping apparatus, lasercutters, sawing and dicing machines, deposition machines,
spinners, encapsulation machines, furnaces and heaters, ion implanters, microscopes,
handling and transport apparatus, measuring and checking instruments, and parts and
accessories.)
5. Software
(contained in diskettes, magnetic tapes, CD-ROMs, etc...)
6. Scientific
instruments (include measuring and checking devices, chromatographs, spectrometers,
optical radiation devices, and electrophoresis equipment.)
Additionally,
other main products of interest covered by the ITA include word processors, calculators,
cash registers, ATM machines, certain static converters, indicator panels, capacitors,
resistors, printed circuits, certain electronic switches, certain connection devices,
certain electric conductors, optical fibre cables, certain photocopiers, computer network
equipment (LAN & WAN equipment), flat panel displays, plotters, and multimedia upgrade
kits. The ITA does not cover consumer electronic goods.
The
participants, after finalizing technical discussions on product coverage on 31 January
1997, agreed that the first set of consultations on additional product coverage would
begin on 1 October 1997. These consultations will be completed during 1998 with a view to
the entry into force of the revised schedules (incorporating the enlarged product coverage
resulting from the initial review) no later than 1 January 1999.
Leading
exporters of IT products in 1995
1. Japan
$106.6 billion
2. United
States 97.99
3. European
Union 15 (extra-EU exports) 57.07
4. Singapore
(domestic exports) 41.27
5. Korea
33.22
6. Malaysia
32.84
7. Chinese
Taipei 28.71
8. China1
4.51
9. Mexico
11.67
10. Canada
11.55
Total of
above: $435.43 billion
Leading
importers of IT products in 1995
1. United
States $139.93 billion
2. European
Union (extra-EU imports) 104.84
3. Japan
37.68
4. Singapore
(retained imports) 24.72
5. Malaysia
22.22
6. Canada
19.81
7. Chinese
Taipei 16.53
8. Korea
16.47
9. China1
4.35
10. Hong Kong
(retained imports) 12.1
Total of
above: $408.65 billion |
