The European Commission has presented at the World Trade Organisation (WTO) its proposal to update and expand the Information Technology Agreement (ITA), an existing trade deal between some of the world's biggest trade powers that lowers the cost of IT products.

The proposal would take account of new products that have entered the market since the agreement was originally concluded in 1996, eliminating customs duties for these goods. Further points considered are tackling non-tariff barriers "behind the border", as well as the problems caused by the non-functioning of some of the mechanisms and procedures provided for in the current ITA. The Commission hopes that other WTO members will engage in discussions in the near future.

EU Trade Commissioner Peter Mandelson said: "The ITA remains a milestone duty-free agreement. But it risks being left behind after twelve years of technological development. We need an ITA for the 21st century that will continue to benefit our consumers and businesses."

The European Commission has argued for some time that the ITA should be updated. The current agreement has reached its limits in solving issues such as the elimination of non-tariff barriers, the expansion of product coverage to take account of technological evolution and convergence, and the expansion of its membership to include all major IT producing countries.
The Commission is seeking a prompt launch and conclusion of negotiations to update the ITA within a matter of months, not years. Such a move would provide an additional boost in trade in these products and be the best way to address the increasing challenges of technological development and convergence. The Commission has maintained that a change in ITA criteria can only be made on the basis of consensus amongst all ITA participants, as provided by the agreement itself, and not as a result of litigation by some members. The US, Japan and Chinese Taipei recently requested a WTO dispute settlement panel against the EU with respect to its tariff treatment of certain information technology products.

Background

The ITA was negotiated and signed in 1996, with the goal of expanding trade in IT and telecommunication products by eliminating tariffs on an agreed range of products. The ITA initially had 14 signatories representing more than 90% of world trade in information technology products. This has since grown to a total of 43 signatories, representing 70 countries or separate customs territories and more than 97% of world trade in IT. The global trading system has seen an unprecedented expansion of trade in IT products since the signature of the ITA. IT products now account for over USD 1500 billion of exports world-wide, i.e. one fifth of total world exports of manufactured products, up from USD 600 billion in 1996.