Tech Industry, Including CTA, Reacts With Glee to ITA Expansion Pact
Tech industry reaction was overwhelmingly positive Wednesday to the news that the U.S. and more than 50 of its World Trade Organization partners completed work on a final Information Technology Agreement (ITA) expansion proposal. A statement from the Office of the U.S. Trade Representative (USTR) said the pact means more than $180 billion in yearly U.S. tech exports will no longer face tariffs in key markets around the world. The original ITA was reached in 1996, prompting many to say the new agreement was long overdue.
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The ITA expansion “will open overseas markets" for many IT and CE products, the USTR’s office said in a Wednesday fact sheet. “Next generation semiconductors, medical equipment, GPS devices, video game consoles, and computer software are among the high-tech products that will see tariff elimination,” it said. For example, the tariffs of "up to 30 percent” on loudspeakers, solid-state drives and videogame consoles would be “reduced to zero” under the agreement, the fact sheet said.
The ITA expansion will cover 99 percent of the value of global information and communications technology (ICT) goods, and 80 percent of all product lines in that category, the U.N. Conference on Trade and Development said in a Tuesday statement. A UNCTAD technical note titled “Trade in ICT Goods and the 2015 Expansion of the WTO Information Technology Agreement” said the expanded list covers several goods not classified as ICT products under the original IT agreement, including medical appliances and electric conductors.
The technology industry “has worked side-by-side with the U.S. government negotiators for four years to see this day,” Consumer Technology Association President Gary Shapiro said in a statement. The agreement is “a win for the U.S.” because it could contribute hundreds of billions to the U.S. economy and create 60,000 new American jobs, Shapiro said. “We now urge all parties to continue the fast-paced forward momentum to meet the goal of implementing the ITA” in July, Shapiro said.
"At long last," ITA expansion "is now irreversibly bound for implementation" in July, wrote Semiconductor Industry Association President John Neuffer in a Wednesday blog post. The deal "represents a huge step forward for innovation and economic growth the world over," Neuffer said. For next-gen semiconductors alone, "tariff savings will amount to hundreds of millions of dollars annually," he said.
Including next-gen semiconductors in the ITA expansion, as well as the “sophisticated manufacturing and testing equipment” used in chip production, “is important to Intel,” Lisa Malloy, the company’s director-government relations and policy communications, wrote in a Wednesday blog post. “Equally as important is the potential for broader technological growth made possible by ITA expansion,” she said. “If the success of the original ITA is any indication, this $1.3 trillion expansion is a significant step forward in strengthening our global economy and fostering innovations through expanded IT trade.”
The ITA “has been one of the most commercially successful trade agreements in history,” so the Information Technology and Innovation Foundation (ITIF) is “very happy to see it expanded to cover hundreds of new ICT products,” said Stephen Ezell, vice president-global innovation policy, in a statement. “Completion of this agreement is not just a win for exporters” but also a “win for the millions of potential new users around the world who can now access high-tech products at lower costs,” Ezell said. “Technology use is the key driver of productivity and growth in the global economy, so this is a victory for all involved.” Like others, the ITIF thinks “it was long past due to update the ITA,” he said. “The technology we use every day has evolved significantly since 1996, but the products covered under the agreement have not.”
The U.S. Chamber of Commerce regards the ITA expansion agreement as a “huge tax cut,” and that’s “good news for consumers and should spur growth in one of the world economy’s most dynamic sectors,” Executive Vice President Myron Brilliant said in a statement. The original ITA “helped deliver a dizzying array of innovative technology products to the world,” he said. “However, many products developed over the past two decades fell outside the ITA’s reach, so expanding its coverage became imperative.”
The additions to the agreement are "relevant to the use of information and communications technology for development because ICT goods generate a multitude of social and economic benefits,” as shown in recent reports, said UNCTAD Deputy Secretary-General Joakim Reiter in a statement. "Making ICTs more affordable, for example, by lowering import duties, can lead to higher adoption rates and increasingly complex applications. Beyond the ICT sector itself, ICTs can be used to boost the competitiveness of other sectors, such as automotive and business services, which have ICT goods as intermediate inputs, and enable participation in global value chains."