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WTO Members Agree to Eliminate Tariffs on Additional Information Technology Goods

Friday, December 18, 2015
Sandler, Travis & Rosenberg Trade Report

The World Trade Organization announced Dec. 16 an expansion of the Information Technology Agreement that will phase out tariffs on approximately $1.3 trillion in annual global exports of 201 information and communications technology products. Covered goods include next-generation multi-component integrated circuits, medical equipment, GPS devices, tools for manufacturing printed circuits, video game consoles, portable interactive electronic education devices, printer ink cartridges, static converters and inductors, loudspeakers, computer software, video cameras, testing instruments and touch screens, which are currently subject to tariffs of up to 35 percent.

According to the European Union, around 65 percent of tariff lines accounting for approximately 88 percent of exports of covered goods will be eliminated by July 1, 2016, when most participants will implement the first tariff cut. These figures will rise to 88.8 percent and 95.4 percent, respectively, in four stages by July 1, 2019. For a very limited number of sensitive products tariffs will be progressively eliminated over five years, and seven years in the most exceptional cases. Press sources note that tariff elimination schedules vary by participant and that China will phase out its tariffs more slowly than others.

The new tariff commitments will be applied by the 53 participants on a most-favored-nation basis, which means that all 162 WTO members will benefit from duty‐free access for covered goods in those markets. Any additional WTO members wishing to make the same commitments will be able to join the agreement in the future.

U.S., EU and WTO officials hailed the first major tariff elimination deal at the WTO in 18 years and asserted that it demonstrates the organization’s ability to deliver commercially significant results. That is a point of concern as WTO members meet for their biannual ministerial meeting in Kenya this week to discuss the fate of the long-running Doha Round and its impact on the WTO’s negotiating function.

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