PRESS/70
27March 1997
Launching offreetrade incomputer products tobenefit everyday life
ofconsumers andcompanies, saysRuggiero
Forty governments agreed, on26March, toimplement theWTO Ministerial Declaration onTrade
inInformation Technology Products (ITA) thatwillcutcustoms duties oncomputer and
telecommunications products beginning on1July1997 andeliminate them altogether bytheyear
2000. These tariff reductions willapply toallWTO members.
TheWTO Director-General, MrRenato Ruggiero hailed theITAas"representing another
veryimportant success forthemultilateral trading system". Hesaid:
"This accord, which covers nearly $600 billion inworld trade, means lower prices for
consumers andfewer barriers tothespread oftechnology thatissocritical tothedevelopment of
allourmembers.
"The 40governments haveagreed tophase outalltariffs oncomputers, software,
telecoms products andsemiconductors. They account for92.5% ofworld trade inITproducts, but
thebenefits ofthisagreement extend wellbeyond the40andwillindeed reach practically every
country onearth.
"Taken together withthehistoric dealreached lastmonth ontrade intelecommunications
services, theITAprovides aspringboard foreconomic growth anddevelopment inthe21st
century. WTO agreements toliberalize trade inthese twosectors, which collectively arethe
lifeblood oftheworld economy, amounts inquantitative terms toanewtrade round.
"Instatistical terms, these twoaccords cover international business worth overatrillion
U.S.dollars, which isroughly theequivalent ofworld trade inagriculture ($444 billion in1995),
automobiles ($456 billion) andtextiles ($153 billion) puttogether. Thisisindeed animpressive
achievement.
"Buttheimportance oftheagreement goeswellbeyond statistics. Theimpact ofthese
agreements onimproved living standards fortheworld 'scitizens should notbeunderestimated.
Thecomputers, semiconductors, telecoms hardware andcomputer software thatareincluded in
theITAaretheconduit forthedelivery ofinformation. Bymaking suchproducts more
affordable, wemove onestepcloser tothevision ofatelephone inevery village oftheworld.
Theramifications ofsuchanachievement tothehealth andeducation ofthose inthepoorest
countries areobvious.
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"Wemust nowturnourattention tothethirdlegofthethree bignegotiations wehave
scheduled for1997: financial services. Butgiven thespirit ofgood willandcompromise our
members haveshown sofarthisyear, Iamconfident wecanhaveasuccessful outcome."
NOTE TOEDITORS:
TheWTO Ministerial Declaration onTrade inInformation Technology Products (ITA) wasagreed
attheclose ofthefirstWTO Ministerial Conference on13December 1996 inSingapore. TheITA
provides forparticipants toeliminate customs duties andother duties andcharges oninformation
technology products (contained intheannexes) bytheyear2000, onanm.f.n. basis (applied toall
WTO members).
TheDeclaration, however, provides thatimplementation iscontingent onexpanding ITA
participation tocover approximately 90percentofworld trade inITproducts by1April 1997.
TheITAparticipants, on26March, agreed thatthiscriterion hadbeenmet.They alsoestablished
aCommittee ontheExpansion ofTrade inInformation Technology Products, which willmonitor
theimplementation oftheITA, discuss andapprove expansion ofproduct coverage anddealwith
requests from other countries tojoinin.
Participants
40-The29participants inSingapore (Australia, Canada, the15members oftheEuropean
Communities, Hong Kong, Iceland, Indonesia, Japan, Korea, Liechtenstein, Norway, Chinese
Taipei, Singapore, Switzerland, Turkey andUnited States) plus11other countries thathavecome
onboard since then(Costa Rica, theCzech Republic, Estonia, Israel, India, Macau, Malaysia,
NewZealand, Romania, theSlovak Republic andThailand). The29participants inSingapore
accounted forabout 83%ofworld trade inITproducts; thecurrent 40participants represent
92.5% ofworld trade inthissector. TheITAtariff schedules ofthese governments havebeen
approved byconsensus. Approval forPanama andPoland hasbeendelayed because ithasnot
beenpossible toconclude thenegotiations withtrading partners. Twomore WTO members, the
Philippines andElSalvador, haveindicated theirintention tojoininthenearfuture.
Tariff-reduction timetable
TheITAprovides forthe"staging" oftariff reductions infourequal ratereductions (25% each
time):
1st 1July1997
2nd 1January 1998
3rd 1January 1999
4th Complete elimination ofduties nolaterthan1January 2000
Inaddition toregular customs duties, theITADeclaration alsoprovides forthe
elimination ofother duties andcharges (ODCs) by1July1997 (except ifotherwise specified ina
participants schedule).
Costa Rica, Indonesia, India, Korea, Malaysia, Chinese Taipei andThailand havebeen
granted flexibility incutting theirtariffs onafewproducts tozeroaftertheyear2000 butnot
beyond 2005.
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ITtariffs inthe"Quad" countries aregenerally lowbutsome duties reach ashighas17%.
Relatively hightariffs areconcentrated inthetelecom sector intheUnited States andCanada, and
onsemiconductors intheEuropean Communities. Many developing country participants apply
hightariffs onITproducts, including more than50percentinsome cases.
Product coverage
World trade inITproducts issignificant --about $600 billion annually, orabout 10.2percentof
world merchandise trade. There aresixmain categories ofproducts covered bytheagreement:
1. Computers (including complete computer systems andlaptops aswellasthe
components suchasCPUs, keyboards, printers, display units (monitors),
scanners, harddiskdrives, power supplies, etc... )
2. Telecom equipment (including telephone sets,videophones, faxmachines,
switching apparatus, modems, andparts thereof, telephone handsets, answering
machines, radio-broadcasting andtelevision transmission andreception apparatus,
andpagers.)
3. Semiconductors (include chips, wafers, etc... ofvarious sizesandcapacities)
4. Semiconductor manufacturing equipment (include awidevariety ofequipment
andtesting apparatus usedtoproduce semiconductors suchasvapor deposition
apparatus, spindryers, etching andstripping apparatus, lasercutters, sawing and
dicing machines, deposition machines, spinners, encapsulation machines, furnaces
andheaters, ionimplanters, microscopes, handling andtransport apparatus,
measuring andchecking instruments, andparts andaccessories.)
5. Software (contained indiskettes, magnetic tapes, CD-ROMs, etc...)
6. Scientific instruments (include measuring andchecking devices, chromatographs,
spectrometers, optical radiation devices, andelectrophoresis equipment.)
Additionally, other main products ofinterest covered bytheITAinclude word processors,
calculators, cashregisters, ATM machines, certain static converters, indicator panels, capacitors,
resistors, printed circuits, certain electronic switches, certain connection devices, certain electric
conductors, optical fibrecables, certain photocopiers, computer network equipment (LAN &
WAN equipment), flatpanel displays, plotters, andmultimedia upgrade kits.TheITAdoesnot
cover consumer electronic goods.
Theparticipants, afterfinalizing technical discussions onproduct coverage on31January
1997, agreed thatthefirstsetofconsultations onadditional product coverage would begin on1
October 1997. These consultations willbecompleted during 1998 withaviewtotheentry into
force oftherevised schedules (incorporating theenlarged product coverage resulting from the
initial review) nolaterthan1January 1999.
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Leading exporters ofITproducts in1995
1.Japan $106.6 billion
2.United States 97.99
3.European Union 15(extra-EU exports) 57.07
4.Singapore (domestic exports) 41.27
5.Korea 33.22
6.Malaysia 32.84
7.Chinese Taipei 28.71
8.China1 4.51
9.Mexico 11.67
10.Canada 11.55
Total ofabove: $435.43 billionLeading importers ofITproducts in1995
1.United States $139.93 billion
2.European Union (extra-EU imports) 104.84
3.Japan 37.68
4.Singapore (retained imports) 24.72
5.Malaysia 22.22
6.Canada 19.81
7.Chinese Taipei 16.53
8.Korea 16.47
9.China1 4.35
10.Hong Kong (retained imports) 12.1
Total ofabove: $408.65 billion
END