Geneva, 15 September 2008
What is the ITA?
The ITA was negotiated and signed in 1996, with the goal of expanding trade in IT and telecommunication 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 products.
ITA signatories have agreed to eliminate customs duties and other duties and charges on certain IT products, which are specified in Attachments A and B to the Agreement. The ITA entered into force in April 1997 and required that customs duties on covered products be reduced in stages and eventually eliminated by 1 January 2000. The commitments undertaken under the ITA are on a "most favoured nation" basis, which means that benefits must be extended to all WTO Members.
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.
How is product coverage of the ITA defined?
The ITA product coverage is defined in attachments to the ITA. Attachment A defines products by tariff heading; Attachment B provides a positive list of specific products covered by the ITA.
Why does the EU want to update the ITA?
Despite the growing trade in IT products, a number of problems remain which the current agreement does not adequately address:
The WTO dispute settlement cases launched by the US, Japan and Chinese Taipei
On 28 May 2008 the United States and Japan requested WTO consultations with the EC with respect to our tariff treatment of certain information technology products. They were joined by Chinese Taipei on 12 June 2008. Consultations were held in June and July but did not resolve the dispute. The complainants jointly requested the establishment of a panel at the WTO Dispute Settlement Body Meeting of 29 July 2008.
The European Commission has rejected claims that the EU is not fulfilling its obligations under the ITA. Not only has the EU respected its ITA obligations, but it has explicitly said it is willing to reassess the current ITA product coverage to reflect new technology, in a negotiation with all ITA signatories.
A change in ITA scope can only be made on the basis of consensus amongst all ITA participants, not as a result of litigation by some members. The ITA has a review clause which can be invoked by members at any time. The complainants have so far not demonstrated a willingness to do this.
The complaints identify classification issues with three products, namely Flat Panel Displays, Set-Top Boxes and Multifunctional Copy Machines
For more information on the WTO dispute, please see:
United States: http://trade.ec.europa.eu/wtodispute/show.cfm?id=408&code=2
Chinese Taipei: http://trade.ec.europa.eu/wtodispute/show.cfm?id=410&code=2