What is the problem? International agreements lag behind evolution in technology
The Information Technology Agreement (ITA) of 1997 has achieved tremendous results in promoting the up-take of information technology in Europe and worldwide. As technology evolves and information and communications technology (ICT) goods become increasingly multifunctional, the ITA is at risk of losing relevance to today’s trade and technologies. The ITA needs to be updated to take into account the evolution of technology.
Why is EU action necessary? EU can help boost international export in IT products
World export in IT products has almost tripled since the 90s to $1500 billion in 2010. This accounts for 20% of total world exports of manufactured products. The ITA covers 97% of world trade in IT goods. It includes 70 countries and customs territories. Members eliminate duties and extend these benefits to all World Trade Organisation (WTO) members. Tariff-free trade has offered many developing and transition economies the opportunity to grow by entering global ICT production networks. The agreement currently covers six broad categories of ICT products: computers, telecommunication equipment, semiconductors, semiconductor manufacturing equipment, storage media and scientific instruments.
What has the Commission done until now?
The Commission has completed internal consultations on the revised list of products for the ITA negotiations, following consultations with the ICT industry. Currently, negotiations are being pursued with third countries, among which the ASEAN countries, China, Japan, Korea, Taiwan and the U.S. have expressed interest in updating the product list. Following the ITA Committee meeting on 1 November 2012 the EU pointed out that progress is on-going between members to increase the list of goods covered by the ITA. However, while the EU supports expanding the ITA to new products it is also aims to tackle non-tariff barriers. This is proving difficult, as several WTO countries do not support the latter goal of using the ITA to eliminate non-tariff barriers.
The Russian Federation intends to fully join the ITA, and submitted its ITA schedule to the Committee on 1 August 2012.What will the European Commission do?
By end of 2013:
- To finalise negotiations on the ITA in the WTO (the Commission has already received a mandate from the Council in 2009 .
The goals are:
- To eliminate unjustified non-tariff barriers on information technology products and to prevent the creation of new barriers.
- To expand the product coverage in line with technological innovation and product convergence.
- Regularly update the agreement to keep track of technological development and convergence.
- Include major producers of IT products that are still outside the ITA.