WTO releases list of 200+ IT product categories for total duty removal

02 Aug 2015
As Chinese Taipei and Thailand signed up as signatories to the WTO IT duty removal 2015 proposal, WTO also made available the full list of IT product categories.

Chinese Taipei and Thailand confirmed in the last week of July, they have agreed to eliminate customs tariffs on more than 200 widely traded information technology products. EU Ambassador to the WTO, Angelos Pangratis told a meeting of the WTO's General Council that the two Asian nations — both large producers of IT products — have joined other leading traders of high-tech goods in accepting the deal, which will see tariffs removed on products such as new-generation semi-conductors, GPS navigation systems, tools for manufacturing printed circuits, telecommunications satellites, and touch screens.
In general the regional IT industry was still assessing the medium to long term impact of the announcement.
Mohammed Areff, Vice President, Middle East, Africa, Turkey, Avaya commented, “The Internet of Things would receive a boost through this WTO initiative, particularly by making the OEM and product sector more competitive. As a services and solutions organisation, Avaya may not be directly impacted by this as things stand, but would see a positive effect on innovation and interest around IoT. This would also mean that we start engaging more in digital transformation initiatives with the Government and private sectors, to ensure the right framework in place before the expected boom of new devices and products. With a predicted business opportunity of $1 trillion by 2020, this will be a very interesting space to watch."
Explains Meera Kaul, CEO Optimus, "Yes the lowering of prices of IT products by the WTO agreement will boost trade as prices will come down. We do not know yet if the cost advantage will be passed on - the exact categories and what they represent and get used in will determine that. I would not comment until we know which processors and devices will get effected so that we can determine if our vendors use these enough for it to impact prices."
Fifty four WTO members took part in the negotiations to expand product coverage of the WTO's 1996 Information Technology Agreement. Nearly all the participants have now confirmed their acceptance of the product coverage list, which was finalised on 24 July.
Early signatories for World Trade Organisation, Expansion of Trade in Information Technology products agreement include: Albania, Australia, Canada, China; Chinese Taipei including separate customs territory of Taiwan, Penghu, Kinmen and Matsu; Costa Rica, European Union, Guatemala, Hong Kong, Iceland, Israel, Japan, Korea, Malaysia, Montenegro, New Zealand, Norway, Philippines, Singapore, Switzerland, Thailand, United States.
“There is no need to stress the significance of this result. The figures provided by the WTO, $1.3 trillion of annual trade, are already very telling by themselves,” said Ambassador Pangratis, who chaired the final round of the expansion talks. “Duty-free import and export of IT goods will make world-wide IT industries more competitive and increase the efficiency of global supply lines.”
“Eliminating tariffs on trade of this magnitude will have a huge impact,” declared WTO Director-General Roberto Azevêdo. “It will support lower prices — including in many other sectors that use IT products as inputs. It will create jobs and it will help to boost GDP growth around the world.”
Ambassador Pangratis said he would present to WTO members the outcome of the negotiations, which includes a declaration setting out a road map for finalising the overall negotiations in time for the WTO's 10th Ministerial Conference in Nairobi in December. He also provided members with the list of 201 high-tech goods that will eventually have their tariffs reduced to zero. Both the EU Ambassador and the Director-General underlined that the Agreement brings benefits to all WTO members, since it will be implemented on a most-favoured nation basis. This means that exports of covered goods from all WTO members will enjoy duty-free treatment in the participating members.
They also noted the Agreement is open to all members to join at any time, regardless of whether they have participated in the negotiations up to now. Under the declaration, participants have agreed to reduce tariffs on the covered goods in four equal annual reductions of customs duties, beginning on 1 July 2016 and concluding on 1 July 2019. Extended staging of reductions for some sensitive products may be necessary in limited circumstances.
Each participant will, by 30 October, submit draft schedules detailing how they will provide duty-free treatment to the covered products and make them binding under WTO rules. These schedules will be reviewed and approved by participants no later than 4 December. The Agreement takes effect once participants accounting for approximately 90% of world trade in the covered goods have their draft schedules approved. This threshold is expected to be reached in time for the 10th Ministerial Conference in December.
The participants have also agreed to meet no later than January 2018 to review the product coverage and consider whether the coverage list should be updated to incorporate additional products. In addition, they have agreed to intensify their discussions concerning non-tariff barriers in the information technology sector.
The agreement this month is an expansion of the 1996 Information Technology Agreement which involves 81 members. In 2012, members recognised that technological innovation had advanced to such an extent that many new categories of IT products were not covered by the existing agreement. Negotiations began in 2012 to expand the coverage of the accord.

This article appeared in techchannelmea.com on 02 August 2015