WTO Agreement Reached on Tariff-Cutting Deal for Information Technology Products

King & Spalding

On July 24, members of the World Trade Organization (WTO) announced that they had reached a tentative deal to expand duty-free treatment under the Information Technology Agreement (“ITA”). The ITA, originally reached in 1996, is now set to cut tariffs on 201 additional products, including multi-component integrated circuits, GPS navigation systems, medical devices, software media, machine tools for manufacturing printed circuits, telecommunications satellites, and touch screens. Per WTO Director-General Roberto Azevêdo, “[a]nnual trade in these 201 products is valued at over $1.3 trillion per year, and accounts for approximately 7% of total global trade today.”

As King & Spalding has reported, accession to the ITA is optional. However, the United States has signed on to the agreement alongside top IT-producing countries such as China, Japan, and Korea. After some resistance, Thailand and Chinese Taipei have joined as well. Importantly, while participation in the agreement is optional, its implementation will benefit all WTO members, as exports from any member will receive duty-free treatment in the participating nations under the WTO’s most-favored nation principles.

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King & Spalding

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