IT products duty-free

Implementation of Information Technology Agreement (ITA) as per 1.1.2017

On 1 July 2016 the EU expanded duty-free treatment to new IT products covered by the Information Technology Agreement (ITA) revised in December 2016. The agreement should eliminate custom duties on more than 200 IT products in 54 countries of the world, which represents around 90% of the global trade in such products.

The EU, together with the US, is among the first participants to ratify and implement the expanded agreement. As a result, EU citizens will enjoy cheaper access to IT-goods such as GPS, video and audio technology including multi-media software and video-games. Also, cheaper components and parts will allow EU industry to lower their production costs and will help to keep production in the EU. Elimination of tariffs in other participating countries will also help EU exports to take off. Procedural delays have occurred in China, Japan and Korea, but implementation by these countries is expected soon. Switzerland (and the other last participating countries Australia, Iceland, and the Philippines) will implement the agreement as of 1 January 2017.

The Committee on the Information Technology Agreement (ITA), at a meeting on 18 April 2016, heard reports about current preparations for implementation of the Nairobi Ministerial Declaration on the Expansion of Trade in IT Products. The declaration established that the first set of tariff cuts were to be implemented on 1 July 2016 and the second set no later than 1 July 2017, with successive reductions taking place on 1 July 2018 and effective elimination no later than 1 July 2019.

The European Union, Switzerland, Norway and Costa Rica emphasized the importance of the ITA expansion and encouraged other members of the Committee to join the Expansion Agreement. In the EU’s view, eliminating tariffs in a further set of products will allow industry to reduce the cost of importing the hardware necessary to develop the IT sector, create highly qualified jobs for young people, make other industries more efficient by using IT and enable countries to become part of global value chains.

The expansion of the ITA, agreed at the Nairobi Ministerial Conference in December 2015, eliminates tariffs on an additional 201 IT products valued at over $1.3 trillion per year. Negotiations were conducted by over 50 WTO members but all 162 WTO members will benefit from the Agreement as they will all enjoy duty-free market access to the markets of the members eliminating tariffs on these products.

Seven members of the Committee (United States, European Union, Japan, Korea, Canada, Norway and Australia) sought justification or clarification from India on a Customs notification that raises duties to 10 per cent ad valorem for several ITA products. These members considered that, according to India’s certified WTO schedule of concessions, the duties of the products should be bound to “zero”.

India said that it had heard the concerns expressed by members and informed them that the written questions submitted by some had been sent to capital for analysis. Products mentioned in the questions submitted by the European Union, Japan and the United States include telecommunications switches, voice-over internet protocol phones, optical transport equipment and network products.

In addition to reviewing the status of implementation of the ministerial declaration on trade in ITA products and the current work on non-tariff barriers, the Committee also approved on an ad referendum basis the classification of an additional 15 items for which there were classification divergences.

* Dr. Mónika Molnár | Dr. Martin Eckert



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