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 now comprises 81 participants whose trade in IT products accounts for 97 percent of global trade. On 16 December 2015, participating 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 since the original ITA.
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 ITA, 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 ITA 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.
Members participating in the Expanded ITA have agreed to remove the majority of the tariffs on the 201 additional ITA products within three years, with reductions beginning in 2016-17.
Domestic implementation and consultation
The treaty amendment to bind the Expanded ITA tariff commitments in Australia’s WTO Schedule of Concessions was tabled in parliament on 31 August 2016. The Joint Standing Committee on Treaties (JSCOT) will conduct an inquiry into the Expanded ITA before the tariff commitments can be bound in the WTO.
JSCOT has invited individuals and organisations to provide their comment on the treaty amendment in writing. The proposed amendments to Australia’s WTO Schedule of Concessions and the government’s National Interest Analysis are attached here, and available on the JSCOT website.
Legislation to amend Australia’s applied tariffs is proposed for introduction in the 2016 Spring Sittings of Parliament.
For any questions or comments about the Expansion of the ITA, please contact the Industrials and Market Access Section, DFAT: email@example.com.