ITA – Information Technology Agreement

Fecha publicación: 30 July, 2015
Categorías: Logistics&Customs
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Autor: Arola

The Information Technology Agreement (ITA), as the first and most significant tariff liberalization arrangement negotiated in the WTO – World Trade Organization after its establishment in 1995, led to the elimination of import duties on products which in 2013 accounted for an estimated US$ 1.6 trillion, almost three times as much as when it was signed in 1996. The IT sector has been one of the fastest growing sectors in world trade. Today, trade in these products accounts for approximately 10 per cent of global merchandise exports. ITA covers a large number of high-tech products, including computers, equipment for telecommunications, semiconductors, semiconductor manufacturing and testing equipment, software, scientific instruments, and its parts and accessories.

WTO General Director Roberto Azevêdo said that “today’s agreement is a landmark, larger than global trade in automotive products –or trade textiles, clothing, iron and steel combined”. He insisted that by eliminating such tariffs on trade will have a huge impact, creating jobs, lowering prices and helping to boost GDP growth around the world.

The Information Technology Agreement it is just a mechanism to reduce import and export duties, but must be reminded that all participants have to respect two basic principles:

1. They must be reduced to a zero tariff level.
2. All other duties and charges must be bound at zero.

Thanks that the products covered by the ITA can move freely across borders without paying import duties, industry information technology has been able to specialize and benefit from economies of scale. This is one of the reasons for the proliferation of networks of production and global supply chains in the field, which have brought an improvement in productivity and efficiency in the industry.

Even the countries that are not part of ITA have indirectly taken advantage from trade opportunities created not only by imposing tariff elimination, but by the large economies of scale from global production networks that have been developed in recent years. This has allowed more affordable, high-quality products and to establish new industries and services that work thanks to information technology.

The Information Technology Agreement has contributed considerably to lower prices on information technology products for both consumers and importers, and to reduce input costs for exporters of highly complex technological products.

 

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