The WTO Information Technology Agreement (ITA) is an undertaking to liberalise global trade in IT products. The original agreement entered into force on 1 July 1997 and comprised 81 participants whose trade in IT products accounted for 97 percent of global trade. On 16 December 2015, 52 of those 81 Members agreed to update the agreement and expand the coverage to a further 201 products. The expansion of the ITA is the first major tariff-cutting deal at the WTO in 18 years.
The original ITA eliminated tariffs on products such as computers and peripheral equipment, electrical components such as semiconductors, computer software, telecommunications equipment and analytical instruments among other products. The expanded agreement covers products such as new-generation semi-conductors, GPS navigation systems, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens. For the first time, the ITA will also cover a range of consumer electronics, including headphones, loud speakers and amplifiers, as well as video game consoles and GPS devices. Medical devices such as Magnetic Resonance Imaging (MRI) machines, electro cardiograph (ECG) machines and bionic ear implants are also covered. The WTO has estimated that annual trade in the 201 additional products to be covered is valued at over AUD$1.3 trillion per year, accounting for approximately 10% of total global trade today.
The tariff commitments undertaken in the Agreement, including the recently agreed expansion, are made on a most-favoured nation (MFN) basis. This means participants must extend their commitments to all WTO Members, regardless of whether the other Member has also signed up to the ITA. The Agreement also provides for a work program to review non-tariff barriers (NTBs) which affect trade in IT products.
Australia imports around AUD$19 billion worth of goods covered under the expanded agreement, and exports around AUD$3.6 billion. Eliminating tariffs on these goods in Australia and globally will benefit Australian consumers by putting downward pressure on end prices. Upstream technology industries such as software design, as well as downstream industries such as IT service providers will also benefit from cost reductions which will provide opportunities for Australia’s export industries.
Participating members have agreed to remove the majority of the tariffs on the 201 additional ITA products within three years, with reductions beginning in 2017.
Media release: Australia to benefit from tariff cuts on popular high-tech goods