US, WTO Partners Aim To Strike $1 Trillion in Duties Through ITA Expansion

The "new agreement will end tariffs on approximately $1 trillion worth of high-tech products, so its commercial significance is obvious," said Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce, in a statement. The ITA initially took effect in 1996, but WTO members have failed to update the pact since, despite significant changes in IT capacity globally. Negotiators edged close to an expansion deal in late 2014, but the U.S. and China couldn’t agree to conclude the talks.

Products likely to now be part of the agreement, which aims to strike duties completely, include innovative semiconductors, GPS navigation equipment and medical equipment, such as magnetic resonance imaging products and ultrasonic scanning apparatus, the WTO said. “This is a big deal,” said WTO Director-General Roberto Azevêdo. “The trade covered in this agreement is comparable to annual global trade in iron, steel, textiles and clothing combined.” The ITA agreement doesn’t factor in country of origin in its duty-free guarantees. Expansion will also cover printer ink cartridges, loudspeakers, videogame consoles and a range of other products, said USTR.

CEA and other associations largely praised the breakthrough. “This is a very significant development, and we hope the new Friday deadline for national capitals' approvals will prove to be a mere formality,” said Sage Chandler, CEA vice president-international trade, in a statement. “Once those approvals are in place, we expect the deal to be finalized at the WTO Nairobi Ministerial in December and implemented next July.” Dean Garfield, CEO of the Information Technology Industry Council, also applauded the WTO and USTR for shepherding through the expansion. "The progress made today in Geneva on the Information Technology Agreement is potentially seismic," Garfield said in a statement. "Once completed, ITA expansion will make history, representing the biggest tariff-elimination undertaking achieved by the WTO in nearly two decades."

Ken Salaets, ITI global policy director, said the work completed in the past week on the ITA expansion "was the bulk of what has to happen" to finalize the deal and that he expects the participating parties to approve it. Salaets, who was in Geneva during the trade talks, said the potential tariff reduction enables companies to reinvest the money and "really concentrate on the need of the consumers." The deal could lead to price reductions on specific products, relieve economic pressure and increase business competitiveness, he said. Salaets also praised the deal for its forward-looking nature, citing its provision that the WTO parties will reconvene to revisit the issue in 2018. "It took us 20 years to achieve this," Salaets said, "and we don't want to wait another 20 years."

The Telecommunications Industry Association applauded ITA negotiators for their work to remove trade barriers on high-tech products. "The updated ITA will benefit consumers and businesses alike and is a major victory for the tech sector," TIA CEO Scott Belcher said in a news release. CompTIA also released a statement calling the agreement a "historic event" and urging the countries involved to approve it. "Eliminating tariffs on many additional tech products will maintain high-paying U.S. technology jobs by allowing our members to sell more of their products across borders," said CompTIA Executive Vice President Elizabeth Hyman.