WTO Members Make $1 Trillion IT Deal

On Friday (July 24), representatives of the member nations of the World Trade Organization (WTO) met in Washington, D.C. to finalize the terms of a new trade agreement to cut tariffs on $1 trillion worth of information technology products. The deal should generate over $1 trillion in technology related trade.

On Friday (July 24), representatives of the member nations of the World Trade Organization (WTO) met in Washington, D.C. to finalize the terms of a new trade agreement to cut tariffs on $1 trillion worth of information technology products. The deal should generate over $1 trillion in technology related trade.

According to a report by ChannelNewsAsia.com, the deal cuts tariffs on information technology products in order to boost trade in goods ranging from video games to medical equipment. The agreement updates the WTO’s 18-year-old Information Technology Agreement (ITA), adding more than 200 additional products to the list of goods covered by zero-tariff and duty-free trade. Many of the newly added products relate to technologies that did not exist at the time of the creation of the original ITA.

Representatives of the US delegation indicated that it believes the new agreement will lead to more than $100 billion in additional US exports alone, while technology manufacturing industry estimates showed the removal of tariffs may lead to as many as 60,000 additional jobs. International numbers run as much as 10 times higher.

According to US Trade Representative, Michael Froman, “ITA’s expansion is great news for the American workers and businesses that design, manufacture, and export state-of-the-art technology and information products, ranging from MRI machines to semiconductors to video game consoles.”

While well-known technology manufacturers like General Electric, Intel, Texas Instruments, Microsoft, and Nintendo are expected to be the biggest beneficiaries of the new agreement, a number of smaller companies in the technology sector should benefit, as well. The new list of items on the duty-free list include computer software, various types of media, video game consoles, printer ink cartridges, GPS devices, medical devices (such as MRI machines) and next generation semiconductors. Components for many of these products, and new types of software and media, are increasingly generated by small to mid-size companies. While these entities had little say on the formation of the new agreement, they may receive a disproportionate boost over their much larger counterparts in the industry.

As noted by Intel’s Communications Director, Lisa Malloy, the new agreement “definitely impacts Intel — and that’s important — but also as important are the other technologies that it covers that were not even dreamed of when the original ITA was negotiated … Things like … health devices and GPS [are] technologies that semiconductors and Intel hope to power in the years to come.”