WTO cuts tariffs on $1 trln worth IT products

But Taiwan failed to persuade other negotiating participants to include flat panels into the agreement so it did not sign the new IT agreement.

“Annual commerce in these 201 products is valued at over $ 1.3 trillion per yr, and accounts for about 7 % of complete global commerce right now”.

“Today’s agreement is a landmark”, said WTO director-general Roberto Azevedo.

The expanded Information Technology Agreement (ITA-II) pledged to eliminate tariffs on an additional list of roughly 200 products, which include new generation semi-conductors, Global Positioning System navigation equipment and medical equipment, including magnetic resonance imaging products and ultra-sonic scanning apparatus. The tariff reductions are set to start in 2016, but participating countries must by the end of October submit a draft schedule spelling out their plans to meet the terms of the deal.

Dean Garfield, president of the Information Technology Industry Council trade group in Washington, said the deal “will open markets, create jobs and spur economic growth around the world, as well as bring down costs for consumers”.

The Commissioner added: “This major achievement adds much-needed momentum to the World Trade Organization”. And looking ahead, this agreement is an inspiration to step up our efforts in the run-up to the WTO ministerial in Nairobi in December.

The MOEA said that the ministry will continue to push for a legislation to postpone the implementation of a tax levy on bonuses paid by high-tech firms to their employees, a move which is expected to help the local flat panel avoid a brain drain at a time when China is poaching Taiwanese IT specialists. Besides manufacturers, consumers may benefit from lower prices on imported goods. It is an expansion of the ITA, which was first agreed in 1997.

Negotiators still have to work out the technical details of the agreement, as well as a timetable for eliminating the tariffs.

Intel welcomed the range of products covered.

About 54 countries, covering about 90 per cent of the global trade in information technology products, have agreed to this updated list.

The update to the IT Agreement, originally in 1996, comes after three years of talks, suffering delays partly due to the Chinese leaving and rejoining the deal over concerns of competition from Japan and South Korea.

But several trade officials contested the WTO’s projection of anticipated gains from ITA-II.