USTR on Information Technology Agreement Decision
Washington -- U.S. Trade Representative Charlene Barshefsky has welcomed a decision by negotiators to conclude a second information technology agreement (ITA II) in the World Trade Organization (WTO) early in 1999.
Date: 12/14/98

In a December 14 press release, Barshefsky said participants agreed not only to work on expanding the number of products subject to tariff elimination but also to work on eliminating non-tariff barriers to information technology trade such as product standards.

The deadline for concluding the negotiations has slipped three times during 1998.

"I am impressed by the determination and vision shown by our partners in Geneva to pursue an agreement in this sector of vital importance to all our economies," Barshefsky said. "We will work hard to finish the job and forge consensus."

Following is the text of the press release:

(Note: In the text "billion" equals 1,000 million.)


United States Trade Representative Charlene Barshefsky said that countries participating in the WTO Information Technology Agreement (ITA) achieved a substantial breakthrough today in negotiations to expand the range of information technology products that are currently part of the ITA. This exercise, known as ITA II, builds upon the landmark agreement to eliminate tariffs on over $600 billion of traded technology products achieved at the WTO's first ministerial meeting in 1996 at Singapore. The United States will continue to pursue activities to open markets for information technology products and electronic commerce.

"Commitments today in Geneva from participants accounting for more than 85 percent of world trade in information technology signal that we are on the road to concluding ITA II early next year," announced United States Trade Representative Charlene Barshefsky. "I am impressed by the determination and vision shown by our partners in Geneva to pursue an agreement in this sector of vital importance to all our economies. We will work hard to finish the job and forge consensus. This signal of renewed commitment to continued liberalization under the WTO augers well for our continued collaboration in this critical area."

"This is one facet of the Administration's ongoing effort to open trade in the rapidly expanding world of technology and electronic commerce trade. We are continuing our work to build upon the existing global electronic commerce standstill agreement which prohibits the imposition of tariffs on electronic transactions on the net. Together, the ITA, the WTO Agreement on Basic Telecommunications Services, the May WTO agreement on electronic commerce, and now a substantial breakthrough on ITA II represent critical contributions to technology expansion and economic growth around the world."

In addition to product coverage, the WTO participants indicated their intention to devote new energy to pursuing the full range of issues confronting the information technology sector, particularly the issue of non-tariff measures, including standards, to ensure that non-tariff measures do not impede the free flow of IT products. Recognizing that one of the aims of the ITA is to encourage the technological development of the IT industry on a worldwide basis, the participants also will explore the convening of a symposium in 1999 that would involve members of the information technology community to further facilitate cooperation in this area.

Background -- Proposed ITA II Product Coverage

The Information Technology Agreement that was concluded at the 1996 WTO Ministerial held in Singapore provides for the staged elimination of tariffs on all products covered -- including semiconductors, computers, telecommunications equipment and computer software -- by the year 2000. Countries will stage the overwhelming majority of their tariff reductions to zero by 2000, and in very limited circumstances, extended staging of commitments up to 2005 was agreed for a few countries.

The product coverage package under consideration in ITA II includes the four major areas of printed circuit board manufacturing equipment, radar/navigation apparatus, certain components for IT equipment, and some consumer electronics. The ITA II package includes more than 30 different kinds of highly specialized equipment for the manufacture of printed circuit boards. Printed circuit boards, like semiconductors, are a basic element in many IT products. Similar equipment to manufacture semiconductors is included in the original ITA.

The ITA II package is very specific in its coverage of radar and navigational apparatus, covering only products with certain specific uses and applications, such as those related to civilian aircraft and large sea-going vessels. The package excludes consumer-type radar/navigation products, such as hand-held Global Positioning System (GPS) devices.

The ITA II package also includes what are best described as "components or inputs" for certain products already covered by the original ITA, such as rechargeable batteries for computers and cell phones, parts of automatic teller machines, and backplane boards used in computers. Also included are certain computer-driven instrumentation devices, such as process controllers, programmable controllers, and banking machines. The list includes certain products that are generally included to be consumer electronics, such as two specific types of cassette recorders. The package captures certain types of microphones, described in terms of frequency range and size to capture those microphones which are generally used in multimedia computer applications. Also included are cameras of a type that work in conjunction with personal computers.

Participants envision using the same model for ITA II as the initial ITA staging formula, e.g., four equal cuts over four years, with flexibility in limited circumstances.

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