Administrative & European Public Law

WTO Members reach landmark $1.3 trillion high-tech trade deal

On 24 July 2015, the European Union, the United States, China and the majority of the World Trade Organization (WTO) Members[1] agreed to eliminate custom duties on a list of 201 high-tech products. The agreement covers 90% of world trade in the products concerned. New products targeted are multimedia products and electronics such as GPS, DVD players, TV-cameras, video games and consoles, medical equipment, telecommunication satellites, parts and components for production of IT goods and semiconductors, instruments for aeronautical and space navigation.

This landmark agreement is a review and an extension of the 1996 Information Technology Agreement (ITA). The deal represents the biggest tariff-cutting deal in the WTO in almost two decades. WTO members concerned started negotiations to expand the ITA in 2012 in light of the technological innovation progress which results in new categories of IT products to be excluded by the existing agreement.

Tariffs will be eliminated in a fairly short period of time, that is to say 3 years from the date of application of the agreement, which is scheduled in July next year. A longer period will be given for some sensitive products.

The deal will not cover certain electronic products subject to customs duties in the EU, such as certain monitors, projectors, non-digital car radios as well as TVs. The parties have also committed to tackle further non-tariff barriers in the IT sector and to monitor the list of products covered in line with technological developments.

Removing customs duties on a wide range of goods will benefit both consumers and manufacturers of IT products in Europe. The deal will also trigger new market access for Europe’s high tech companies. The WTO Members concerned will present their amended draft schedule of concessions in the coming months so as to finalise the overall negotiations in time for the WTO next Ministerial Conference in Nairobi in December 2015.

[1] The Members involved in the negotiations are: the European Union and its 28 Member States; Albania; Australia; Canada; China; Colombia; Costa Rica; Guatemala; Hong Kong; China; Iceland; Israel; Japan; Korea; Liechtenstein, Malaysia; Mauritius; Montenegro; New Zealand; Norway; the Philippines; Chinese Taipei; Singapore; Switzerland; Thailand; Turkey; and the United States. A limited group of countries is expected to confirm its participation in the coming days.

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