One good outcome of the WTO's Nairobi Ministerial for U.S. business is the deal to bolster the 1996 Information Technology Agreement (ITA), which will nix tariffs on 201 information technology products valued at over $1.3 trillion per year. The deal covers 53 WTO member economies making up 90 percent of world trade in IT products.
Covered in the deal are such products as new generation of semi-conductors, GPS navigation systems, tools for manufacturing printed circuits, telecommunications satellites, touch screens, and some state-of-the-art medical products.
Each product has its own tariff liberalization schedule the product. ITA will full eliminate tariffs on 65 percent of products by 1 July 2016; the rest are duty-free by 2019.
The deal is great news for U.S. technology exporters, as they will be able to enter key world markets without paying duties. At the same time, the deal is quite overdue - and much liberalization has already taken place especially among advanced economies. Japan and Australia, for example, already have rock-bottom average tariffs on IT products.
The big prizes for U.S. IT exporters under the deal are China and Southeast Asia, which still have relatively high tariffs - and peak tariffs of as high as 35 percent in certain IT products. Also further opening of the EU market in IT will fuel U.S. companies. The impact on the world economy too is important, as the covered products make up as much as 7 percent of world trade.