Chairman's summary
WTO Information Technology Symposium 16 July 1999

14 October 1999

Chairman's summary
Information technology symposium

1. An information technology symposium was held on 16 July 1999 to share information about the dynamism of information technology (IT) and its future, to explain the role of IT in promoting economic growth and development, and to highlight the value of the application of IT. The Symposium was a full-day session divided into four issue-oriented panels: (1) overview of the IT industry, technological advances/trends, innovative business applications; (2) contribution of IT to economic growth and development and the role of trade in the mutual reinforcement of global and national IT policies; (3) practical problems encountered in IT trade (including the possibility of presenting case studies, e.g. import licensing) and the broader effects of NTMs; and (4) the implications of current approaches to standards making and conformity assessment (review of developments in international standards and other relevant bodies). The symposium was chaired by Mr. Heinz Opelz, Director, Market Access Division, WTO.

2. There were 18 speakers from industry, associations, and organizations who made presentations on a variety of issues and from differing perspectives (see Annex). There was wide geographical representation, as the speakers came from Australia, Belgium, Canada, Chinese Taipei, Costa Rica, Czech Republic, Estonia, France, Germany, Israel, Japan, Malaysia, Philippines, and the United States. The speaker from India could not attend at the last moment, but his presentation, along with those of the other speakers, was circulated at the symposium. These can now be viewed on the WTO website. At the end of each panel session, an interactive discussion, and question and answer session took place. In summary, the symposium was a successful venue for the interaction of government and industry to address issues of IT trade that industry considered important from their practical experience in this field.

3. Mr. David Hartridge, Director in Charge of the WTO, in his opening remarks, pointed out that the symposium was an opportunity to interact with the business world and the wider civil society. This was one way for the WTO to become more open and to understand what the world expected from it.

4. The symposium would allow participants to better understand their respective concerns, interests, and objectives for trade in IT products, and to appreciate its economic importance, actual and potential, and the links between the ITA and other negotiations in the WTO. He pointed out that the ITA covered most countries involved in IT trade, currently 48. However, every Member of the WTO would benefit from the agreement, as the MFN principle applied.

5. The ITA negotiations were unusual in that they were a self-contained sectoral negotiation, like the two other major sectorial negotiations that had been successfully concluded since the end of the Uruguay Round, on financial services and on basic telecommunications services. In these three sectors it was interesting to note that a large number of developing countries that had signed on were not, and did not expect to become exporters in the near future. They were not looking for reciprocity, but were responding to a perceived need to liberalize and promote competition and investment in these sectors, all of which were vital components of a national economic infrastructure in which competitiveness could thrive. Governments had understood that the price of trade protection was paid first by their own citizens and that it was important to provide efficient services, low cost IT products, trained persons, and access to technology in order to ensure a business infrastructure that would be competitive on a world-wide scale.

I.

I.1 Mr. Patrick Low, Director, Economic Research and Analysis Division of the WTO Secretariat, provided an overview of international trade in IT products and demonstrated the economic importance of this sector. He provided a breakdown of trade in the IT sector, both with respect to countries and products, and he pointed out that the trends in IT trade showed the growing importance of this sector.

I.2 Mr. Claro Parlade, Benitez Parlade Africa Herrera Parlade & Panga Law Offices, Philippines, stated that IT was often known as "the great equalizer" for its ability to improve developing countries' economies. However, there existed a "productivity paradox", as there was an apparent failure to attain productivity improvements from information technology investments. In the case of the Philippines, the impact of IT was important in the country's development strategy. He demonstrated the initiatives being undertaken in the Philippines for the IT industry and infrastructure. The growth of IT in the Philippines had been significant. It offered new opportunities for the Philippines and other developing countries.

I.3 Mr. Hanan Ashsaf, Motorola, Israel, identified IT developments, convergence trends, and the emerging technologies for the future. He presented data on the growth of IT, productivity, multimedia output, foreign employment, job growth, and investment. The growth of the internet was noted as an important aspect of the new digital economy. He also gave information on the Israeli electronic industry in terms of growth, newly started companies, and the acquisition of Israeli technology by other countries.

I.4 Mr. Ivan Rícar, TTC Tesla Telecomunikace, Czech Republic, explained his company's progress in moving from a state-owned enterprise to forming a joint venture with private partners. He specifically noted the problems of foreign competition, obsolete technology, overemployment, and the traditional trade orientation of Tesla Telecomunikace to collapsing Eastern European markets. However, his company turned these problems into opportunities by forming a joint venture with a foreign company which allowed it to obtain the necessary technology to become competitive. In addition, it achieved the ISO certification for its products. These developments, in addition to increased international cooperation had allowed his company to be successful.

I.5 Mr. Takashi Kubota, Hitachi Ltd., Japan, addressed past, present, and future scenarios with respect to information technology. He noted that in future there would be complete integration of digital and related technologies. As an example, he mentioned DVDs (digital versatile discs). One of the main objectives in the creation of DVDs was full product compatibility. DVDs created new business opportunities. By using the core technology, it was possible to integrate computers and peripherals, entertainment and communication functions. New products were derived with benefits to users all over the world. He used the term E=MC³, meaning "economic growth equalled the merger of consumer electronics, computers, and communications".

II.

II.1 Mr. Linnar Viik, Levicom Broadband, Estonia, presented Estonia's achievements in the field of information technology. He noted that since 1992 there was rapid growth and development. There was high IT penetration in the public and private sectors. He provided information on internet users, internet public access points, public sector PCs, public institutions on the World Wide Web, telephony subscribers, and internet service providers. Estonia had developed this infrastructure from very little or no infrastructure in 1992 to the relatively high levels today. These rapid developments were attributed to a number of reasons, such as new technology, efficient know-how transfer, good academic background and level of technical education, use of de facto standards, embraced openness, little regulation, liberal economic environment, direct foreign investment, foreign technical assistance, and public investment.

II.2 Mr. Alejandro Montalvo, Chamber of Software Developers, Costa Rica, provided an overview of his country's policies for growth and development. Specifically in the IT field, Costa Rica had decreased taxes on computers, placed computer labs in all public schools, created a national High Technology Center, and abided by WTO agreements in the sector. As a result of these policies, Costa Rica had attracted foreign investment, improved domestic production, modernized the purchase and sale of products, developed a national company for the production of information technology, and scaled down the state structure by utilizing information technologies. Thus, Costa Rica had derived considerable advantages from IT which clearly improved the competitiveness of countries. He encouraged countries to expand the coverage of software products in the ITA.

II.3 Mr. Leslie Simon, Woodrow Wilson International Center for Scholars, United States, said that the productivity paradox led to scepticism about IT as it was slow to see the productivity gains with the rapid growth of IT. He demonstrated the growth of IT and electronic commerce and its resulting impact on the US economy. In recent years there was significant growth in the IT industry, leading to increased employment and wages; at the same time falling IT prices reduced inflation. He noted that IT industry exports and imports outpaced those of other industries in the US economy.

II.4 Mr. Mohd. Salleh Hj. Masduki, Multimedia Development Corporation, Malaysia, presented developments and changes facing the IT industry due to technological change and economic liberalization. He noted that the new forces of Moore's Law, Metcalfe's Law and Coase's Theory of Transaction Cost, were having an impact on the digital/knowledge economy. Information technology, and especially the internet, was having a significant impact by dramatically reducing costs and breaking down natural barriers of time, space and form. He presented the situation of IT in Malaysia, especially the Multimedia Super Corridor project in which he was involved. This project created a "greenfield" area for development of the IT industry and technology in Malaysia. There were a total of 228 approved applications for participation in the projectin a variety of IT fields such as software development, electronic commerce, telecommunications, systems integration, etc.

II.5 Mr. Torbjörn Ihre, Ericsson, Belgium, discussed the movement from an off-line to an on-line society and focussed on the experience for end-users. The movement to an on-line society gave instant access and competition at a global level. It was important that in the global market-place there would be no restrictions for the movement of goods and services, conditions which the WTO and other organizations should ensure. For the users - individuals and enterprises - it was important to be aware of the innovations and developments in moving to an on-line society. In order to benefit from technology, there needed to be flexibility and adaptation by individuals and enterprises to remain competitive.

III.

III.1 Mr. Dewang Mehta, Nasscom, India, could not attend the symposium and his presentation on non-tariff barriers in IT trade was circulated to participants.

III.2 Mr. David McGuire, Nortel Networks, Canada, spoke about the administrative burdens related to import licenses for IT products. He provided an overview of his company's activities in the IT sector and trade in IT products. He addressed also the existing procedures for obtaining a license and resulting problems. He recommended eliminating or simplifying import license requirements for ITA eligible goods.

III.3 Mr. Miin Wu, Macronix International Co., Chinese Taipei, was concerned about anti-dumping and patent protection measures. He proposed creating a neutral organization to handle international affairs in both anti-dumping and patent protection issues. He proposed, furthermore, to review and create equivalent accounting methods as an international standard to aid in anti-dumping actions, and to create a technically competent, jurisdictional system to handle international patent disputes.

III.4 Mr. William Maxwell, Hewlett Packard Company, United States, focussed on the issue of redundant testing and certification as impediments to economic development. He noted that redundant testing and certification caused delays in getting IT products to people, added millions in additional costs, and provided no benefit to the purchaser. He proposed the solution of "one standard – one test and a supplier's declaration of conformity". International standards already existed in this area and most countries already referred to or had adopted them. This approach would reduce costs and promote trade.

III.5 Mr. Michel de Vecchis, Alcatel, France, also suggested that a means to reduce technical barriers to trade would be to have one standard, one test, and a supplier's declaration of conformity. He noted the need for international standards (e.g. ISO, IEC, ITU). One time testing with mutual recognition agreements was the most efficient way to achieve a global circulation of products. With respect to the supplier's declaration of conformity, it was important that it be reliable. He suggested that, in order to achieve such a reliable declaration, requirements be defined sector by sector based on market status; that manufacturer liability be harmonized world-wide; and that market surveillance be used to detect black sheep.

IV. The implications of current approaches to

IV.1 Mr. Jack Sheldon, from the International Electrotechnical Commission (IEC), a standards-making body, presented the role of his organization in terms of standards-making and outreach, and its role in using and testing IT standards. He also discussed the IEC's conformance body scheme which promoted reciprocal recognition of test results among all participating certification bodies to simplify the granting of certifications or approvals at national levels. Furthermore, he noted the growth in conformance body test certificates in recent years, the resulting reductions in processing times by using the certification body scheme, and the advantages of the certification body scheme in general.

IV.2 Dr. James Galloway, Australian Electrical and Electronic Manufacturers' Association, presented a case-study in implementation of a supplier's declaration of conformity as a regulatory tool for managing compliance of electrical and electronic products in Australia. He provided an overview and assessment of the use of a supplier's declaration in Australia and its impact on regulators, suppliers, and end-users. Furthermore, he outlined the essentials that were needed for a supplier's declaration system, including the necessary regulatory framework. He pointed out a number of issues the WTO could examine, such as acceptance of international standards, regulatory information and regulatory practice principles, and the work of ILAC and IEC in the area of portable conformity assessment.

IV.3 Mr. Peter Deichmann, IBM, Germany, pointed out that a global market-place needed a harmonized approval regime, horizontal legislation, recognition of a supplier's declaration of conformity, harmonized requirements and simplified marking. To achieve these goals, the preferred route would be a supplier's declaration of conformity without mandatory third party involvement. He furthermore proposed that the WTO develop a conformity assessment agreement which would be based on a supplier's declaration of conformity and market surveillance by national authorities.

IV.4 Mr. Jean-Louis Robert, Canadian Advisory Council on Electrical Safety, spoke about standards from a regulator's point of view, and noted that in the increasingly global market-place, regulations were important for competitiveness and trade flows. Simple deregulation was not the only answer, and it was through regulating efficiently that benefits would accrue. He presented the example of electrical safety in Canada as an illustration of the nexus between standards and regulations. He noted a preference for a supplier's declaration over third party certification, but still considered this problematic from a regulator's point of view.

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Annex

Speakers list
I. Overview of the it industry, technological advances/trends, innovative business applications

"International Trade in IT Products"

Mr. Patrick Low
Director, Economic Research and Analysis
WTO
Geneva, Switzerland

"The Philippine IT Plan: Prospects and Problems"

Mr. Claro Parlade
Senior Partner
Benitez Parlade Africa Herrera Parlade & Panga Law Offices
Makati City, Philippines

"Contribution of IT Industry to Economic Development – An Israeli Perspective"

Mr. Hanan Achsaf
President
Motorola Israel
Tel Aviv, Israel

"Production of Digital Telecommunications Systems in the Czech Republic"

Mr. Ivan Rícar
Director General
TTC TESLA TELECOMUNIKACE
Prague, Czech Republic

"Creation of New Industry by Digital Convergence"

Mr. Takashi Kubota
Director & Senior Chief Engineer
Corporate Technology, Digital Media
Hitachi, Ltd.
Japan

II. Contribution of it to economic growth and development and the role of trade in the mutual reinforcement of global and national it policies

"Information Society Indicators in Practice – Presentation on Estonian Achievement"

Mr. Linnar Viik
Director of Product Development and Marketing
Levicom Broadband
Tallinn, Estonia

"The Effects of Trade Liberalization of IT Products in the Development of Software and Hi-Tech Industries: A Developing Country's Experience"

Mr. Alejandro Montalvo
President of Costa Rican Chamber of Software Developers
Costa Rica

"The Death of the Productivity Paradox: The Digital Explosion in the US Economy".

Mr. Leslie Simon
Public Policy Scholar
Woodrow Wilson International Center for Scholars
Washington, DC, USA

"The Multimedia Super Corridor Project – A Model for Fostering Economic Growth and Development Using IT"

Mr. Mohd. Salleh Hj. Masduki
Vice President
Flagship Coordination
Multimedia Development Corporation
Selangor Darul Ehsan, Malaysia

"From an Off-line to an On-line Society"

Mr. Torbjörn Ihre
Director
Ericsson European Affairs Office
Brussels, Belgium

III. Practical problems encountered in it trade (including the possibility of presenting case studies, e.g. import licensing) and the broader effects of  NTMs

"Non-Tariff Trade Barriers in IT Trade"

Mr. Dewang Mehta
Executive Director
NASSCOM
New Delhi, India

"Import Licensing for Information Technology Products"

Mr. David McGuire
Senior Manager, International Trade Team
Nortel Networks
Canada

"Trading Barriers and Proposed Solutions of IT Trade"

Mr. Miin Wu
President
Macronix International Co., Ltd.
Chinese Taipei

"Redundant Testing and Certification as Impediments to Economic Development"

Mr. William Maxwell
International Trade Policy Manager
Hewlett Packard Company
USA

"Suppliers' Declaration of Conformity, Certification & Standardisation"

Mr. Michel de Vecchis
Director, Standardization
Telecom Product Division – Cables & Components Sector Alcatel
France

IV. The implications of current approaches to standards making and conformity assessment (review of developments in international standards and other relevant bodies).

"IEC and Information Technology"

Mr. Jack Sheldon
Technical Manager
International Electrotechnical Commission
Geneva, Switzerland

"Supplier Declarations of Conformity: A Case-study in Implementation".

Dr. James Galloway
Director, Technical and Regulatory of the Australian Electrical and Electronic
Manufacturers Association (AEEMA)
Australia

"Global Product Approval System for the Future"

Mr. Peter Deichmann
Technical Relations Manager EMEA (Europe, Middle East, Africa)
IBM,
Germany

"Electrical Safety and Information Technology Products"

Mr. Jean-Louis Robert
Régie de batiment
Government of Quebec
Direction de la normalization
and Member of the Canadian Advisory Council on Electrical Safety
Canada