Global IT tariff cuts
On July 1 the first tariff cuts were implemented under the expanded Information Technology Agreement (ITA), which was agreed at the World Trade Organization (WTO) Ministerial Conference in Nairobi in December 2015.
The original ITA was concluded in 1996. The new agreement will eliminate tariffs on an additional 201 technology products. Products covered by the new ITA include video games consoles, GPS navigation systems, magnetic resonance imaging machines, telecommunications satellites, touch screens, and video cameras. It has been estimated that the products involved have a global export value of some USD1.3 trillion per year.
Negotiations were conducted by over 50 WTO signatory members, but all members will benefit from the agreement as they will all enjoy duty-free access to the markets of the members eliminating tariffs on these products. It has been said that the tariff cuts will increase annual global gross domestic product by around USD190bn.
The first tariff cuts were implemented on July 1, 2016, with successive reductions due to follow in up to seven years. Some countries, such as Singapore, have immediately eliminated all tariffs, but others, including the European Union and the United States, are taking a more gradual approach.
Following the full implementation of ITA expansion, the US Trade Representative noted that over USD180bn in annual American technology exports will no longer face tariffs in key global markets. In addition, duty-free trade in the products covered by the ITA expansion will lower costs for downstream US manufacturing and services industries.