WTO Expands Scope of Products Under Information Technology Agreement

International Trade & Customs Update

Date: December 17, 2015

On December 16, 2015, the United States and more than 50 other World Trade Organization (WTO) members announced an historic expansion of the Information Technology Agreement (ITA) that will phase out hundreds of import tariffs on information technology products traded worldwide. This is the first major tariff-elimination deal at the WTO in almost 20 years. It is estimated that this expansion of the ITA will eliminate tariffs on approximately $1.3 trillion in annual global exports of information and communications technology products that account for nearly 7 percent of global trade.

The original ITA was established in December 1996 and was the first and most significant tariff liberalization arrangement negotiated in the WTO after its establishment in 1995. The information technology sector has been one of the fastest-growing sectors in world trade over the past decade. The ITA covers a large number of high-technology products, including computers, telecommunications equipment, semiconductors, semiconductor manufacturing and testing equipment, software, scientific instruments, as well as most of the parts and accessories of these products.

For years, it was recognized that new categories of information technology products had been developed that did not fall within the scope of the original ITA. Formal negotiations to expand the ITA began in 2012, and in July 2015, after 17 rounds of negotiations, consensus was reached to expand the products covered by the ITA by eliminating tariffs on an additional list of 201 products. The expanded ITA covers new generation semiconductors and related equipment, optical lenses, GPS navigation equipment, game consoles, computer software, and medical equipment (such as magnetic resonance imaging (MRI) machines and computed tomography (CT) scanners).

Fifty-four WTO members participated in these negotiations, and nearly all have now confirmed their acceptance of and commitment to the expanded product list. Under the terms of the ITA, the majority of tariffs will be eliminated (i.e., a zero tariff level on all customs duties and charges) on the 201 products within three years, with reductions beginning in 2016. The expanded ITA also contains a commitment to tackle non-tariff barriers in the information technology sector and to review the list of products to determine whether further expansion may be needed to reflect future technological developments.

Further details on the ITA, its mandate and schedules are available from the WTO’s website at: www.wto.org/english/tratop_e/inftec_e/inftec_e.htm.

FOR MORE INFORMATION

For more information on these developments, please contact any of the individuals listed below:

David M. Schwartz
202.263.4170
David.Schwartz@ThompsonHine.com

Samir D. Varma
202.263.4136
Samir.Varma@ThompsonHine.com

Scott E. Diamond
202.263.4197
Scott.Diamond@ThompsonHine.com

or any member of our International Trade & Customs group.

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