(July 27, 2015)

On July 24, 2015 both the European Commission and the World Trade Organization (WTO) issued press releases announcing that the European Union, the United States, China and some further WTO members agreed on July 24, 2015 to eliminate custom duties on 201 high-tech products. According to the WTO the tentative accord reached by 54 WTO members on July 18, 2014 was confirmed as the basis for implementation work to begin. The WTO furthermore states that ministers from the participating members will now work to conclude their implementation plans in time for the WTO's 10th Ministerial Conference which will be held in Nairobi this December.

According to the European Commission the expansion of the 1996 Information Technology Agreement (ITA) will benefit both consumers and firms alike by removing customs duties on a wide range of goods, including medical equipment, video games and consoles, home hi-fi systems, headphones, blue-ray/DVR players, semi-conductors, and GPS devices.

A total of 54 WTO members negotiated the expansion of the ITA. According to the European Commission a limited group of countries is expected to confirm its participation in the coming days. The WTO on its turn points out that all 161 WTO members will benefit from this agreement, as they will all enjoy duty-free market access in the markets of those members who are eliminating tariffs on these products.

The WTO also states that the terms of the agreement will be formally circulated to the full membership at a meeting of the WTO General Council on July 28, 2015.

According to the press releases tariffs will be eliminated within 3 years from the date of application of the agreement, which according to the European Commission is foreseen for July 1, 2016. For sensitive products longer phase-out periods will be negotiated to give industry time to adapt to a zero-tariff environment. The WTO adds that by the end of October 2015, each of the participating members will submit to the other participants a draft schedule which spells out how the terms of the agreement would be met.

The extension of the ITA aims at broadening the original ITA between Members of the WTO, which came into force in 1997. 
 
Under the original ITA, participants eliminated all customs duties on IT products such as computers, telephones, digital cameras and their parts. The new agreement will substantially expand the range of products covered, that include consumer and other finished products, parts and components, and machinery used in the manufacturing of IT products.

The press release as issued by the European Commission contains some examples of products covered by the ITA expansion.

Examples of finished products

·        Multimedia products (GPS, DVD players, smart cards, optical media)

·        Multifunctional printing and copying machines, ink cartridges

·        Electronics (TV-cameras, video recording, digital car radios, set top boxes)

·        Medical equipment: sophisticated medical equipment such as scanners, machines for magnetic resonance imaging, tomography or dental care and ophthalmology

·        Video games and consoles

·        Routers and switches, microscopes and telescopes

·        Weighing and money-changing machines

·        Loudspeakers, microphones and headphones

·        Telecommunication satellites

Examples of parts and components

·        Parts and components for production of IT goods and semiconductors, including TV parts and parts and other machinery incorporated in IT products, from smartphones to optical or medical equipment. This includes e.g. lasers, LED modules, touch screens, measuring and weighing instruments, switches, electromagnets, amplification apparatuses, etc. 

·        Multicomponent integrated circuits (MCOs), which are the latest and future generation chips included in many electronic and other products: over 30 tariff lines included

·        Instruments for aeronautical and space navigation

Machinery for production of IT goods and semiconductors

·        Machine tools for the manufacture of printed circuits or semiconductors and other IT products, filtering machines, and their parts

Click here to be forwarded to the press release as issued by the World Trade Organization.

Click here to be forwarded to the press release as issued by the European Commission.

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