RESTRICTED
WORLD TRADE G/MA/W/8
4October 1996
ORGANIZATION(96-4045)
Committee onMarket Access Original: English
INFORMATION TECHNOLOGY AGREEMENT
Communication from theUnited States
Thefollowing communication ontheInformation Technology Agreement hasbeensubmitted
bytheUnited States forcirculation toallMembers.
_____________
Every day,technological advances incomputers, semiconductors andother electronics products are
notonlyrapidly changing thewaybusinesses operate, theyarebringing theworld intotheInformation
Age. Forexample, arecent World Bank report called information technology "thecutting edgeof
theservices revolution." Inthenextcentury, theInformation Technology sector willbethelargest
industry intheworld and,perhaps more important, willprovide thefoundation uponwhich mostother
industries willbebuilt.
Experience suggests thatthose countries thathavethelowest tariffs oninformation technology --such
astheUSandJapan --havethemostcompetitive anddynamic information technology sectors. Far
fromencouraging thedevelopment oftheinformation industry anditsproducts, tariffs haveencumbered
thisdevelopment andactasataxonthecompetitiveness andproductivity ofother industries thatrely
heavily oninformation technology.
Thesolution isclear --amultilateral agreement toeliminate tariffs oninformation technology products.
Industry groups from theUS,Canada, Japan, andtheEUarecalling forelimination oftariffs on
information technology products bytheyear2000. AnITAwillenhance thecompetitiveness ofthose
economies thatparticipate. Those thatdon'tarelikely toseetheircompetitiveness reduced.
AnITAwillhelpbusiness andconsumers tomove decisively intotheInformation Agebylowering
costs, improving productivity, improving thespeed andaccuracy ofinformation exchange, increasing
theviability ofnewbusiness andconsumer services andpromoting interregional industry cooperation.
Thus, itisimportant toeliminate tariffs andthereby eliminate whatisinessence ataxoninformation,
competitiveness, andproductivity.
Forexample, tariff elimination oninformation technology products willlower thecostofpersonal
computers --akeytotheinformation revolution. Asuseofpersonal computers becomes increasingly
widespread, newbusiness, consumer, education, andpublic sector applications willgreatly increase
network utilization andwillbecome theunderpinnings foreconomic development.
InDecember attheU.S.-EU Summit, President Clinton, then-Prime Minister Gonzalez ofSpain
(representing theEUPresidency), andPresident Santer oftheEuropean Commission agreed tolaunch
discussions ontheITA. AttheApril 19meeting inKobe, Japan, Quad Ministers indicated strongG/MA/W/8
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support fortheITAandinstructed negotiators tomove forward. Partofthiseffort requires engaging
ourWTO partners whowillbenefit fromthisinitiative. TheUnited States wants tocomplete multilateral
negotiations ontheITAintimefortheWTO Singapore Ministerial inDecember, andtobegin reducing
tariffs onITAproducts in1997.
FREQUENTLY ASKED QUESTIONS
. What aretheUSviews onproduct coverage intheITA?
Although further work isneeded toprecisely define product coverage, theITAbroadly should include
computer hardware products, semiconductors and integrated circuits, computer software,
telecommunications equipment andother information technology products (e.g., semiconductor
manufacturing equipment).
Thefollowing preliminary listisanattempt toillustrate thediversity anddepth ofthelandscape of
theITA,withafocus oncurrent product offerings. Thispreliminary listisnotexhaustive butisintended
simply toindicate insomewhat more detail thetypeofproducts intheITA. Presentation ofthislist
doesnotconstitute aformal offer andinnowayprejudices theoutcome oftheITA.
COMPUTER HARDWARE PRODUCTS ,including alltypes ofportable computers, (e.g.notebook
computers), personal computers, engineering workstations, minicomputers andmainframe computers,
allcomputers usedasservers (such asforalocalareanetwork orwideareanetwork), supercomputers.
Alsoincluded would beparts andaccessories ofsuchcomputers products.
Computer hardware products alsoinclude unitsforcomputer systems, recognizing thatcomputers may
consist ofanentire system inonehousing orofanumber ofunits thatoperate together toform a
complete system. Forexample, theITAshould include central processing units, input/output units,
unitsforstorage ofcomputer data, dataprocessing network equipment andcontrol oradapter units,
power supplies forcomputer equipment, other computer units including combinations ofunits, and
parts andaccessories ofallofthese units.
SEMICONDUCTORS AND OTHER ELECTRONIC COMPONENTS ,including semiconductors
microprocessors andmicrocontrollers, microperipherals andoptoelectronic devices, semiconductor
DRAMs andother memory devices, mixed analogue/digital semiconductors, logic, linear andsmart
power circuits, electronic microassemblies, hybrid integrated circuits, unmounted chips andwafter,
resistors, andparts oftheabove.
SEMICONDUCTOR MANUFACTURING AND TEST EQUIPMENT
COMPUTER SOFTWARE
TELECOMMUNICATIONS EQUIPMENT ,including switching equipment, multiplexers,
teleconferencing equipment, terminal equipment attached tothenetwork (e.g., modems, facsimile
machines), radio-based network equipment, andother telecommunications equipment, including
optoelectronic devices usedastelecommunications equipment.
OTHER PRODUCTS ,including computer-based analytical instruments.G/MA/W/8
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. WilltheITAcoverconsumerelectronicproducts,suchasmicrowaveovensorrefrigerators?
No,whatisenvisioned areproducts related toinformation technology.
. WilltheITAalsoaddress non-tariff measures ?
Participants totheITAshould ensure thattheirrespective regimes evolve inamanner thatenhances
market access forITAproducts. Theelimination oftariffs should notbeanexcuse toignore non-tariff
measures thathinder market access forITAproducts. However, suchefforts donotnecessarily need
tobeonthesame timetable asthetariff elimination schedules.
. Does thismean theU.S.envisions oneMutual Recognition Agreement onITAproducts
forallWTO Members?
No,participants should agree toundertake efforts bilaterally, andmultilaterally, toensure thattheir
respective regimes evolve inamanner thatenhances market access forITAproducts. However, such
efforts donotnecessarily needtobeonthesame timetable asthetariff elimination schedules.
. What isthetimetable fortheITA?
Wehopetocomplete multilateral negotiations ontheITAintimefortheWTO Singapore Ministerial
inDecember, andtobegin reducing tariffs onITAproducts in1997. Tariffs onITAproducts would
beeliminated by2000.
. Who willparticipate intheITA, i.e.onlyQuad members?
Business andconsumers inallcountries would benefit fromeliminating tariffs oninformation technology
products. Wide-participation multilaterally isessential forthesuccess oftheITA.
. IstheITArelated totariff reductions onother products?
WeviewtheITAasoffering renewed impetus tobuild amarket access package forSingapore. We
fullyexpect contributions atSingapore byallWTO Members.
. Does theUnited States have legislative authority toreduce tariffs onITAproducts?
TheUruguay Round Agreements Actprovides thePresident considerable flexibility toproclaim
accelerated reductions intariffs oradditional tariffs reductions insectors ofinterest totheUnited States,
including ITAproducts. Exercise ofthisauthority issubject onlytoreceipt ofconcessions inthese
sectors from other countries andreaching amultilateral agreement onthetariff cutsoraccelerated
staging under theauspices oftheWorld Trade Organization.