Tariffs on hundreds of information technology (IT) goods—201, to be precise—will be slashed starting next year as a result of a sweeping agreement in July by member nations of the World Trade Organization.
WTO director-general Roberto Azevêdo called the deal a “landmark,” noting that annual trade in the products is valued at over $1.3 trillion per year and accounts for approximately 7% of total global trade today. It’s larger than global trade in automotive products, or trade in textiles, clothing, iron and steel combined, he said.
The deal is a game changer. The previous IT agreement dates from 1996 and did not cover the numerous products that have been invented since then. Implementing this new list of zero-tariff and duty-free IT goods will create jobs. It will also give an estimated $190 billion boost to the global economy by lowering consumer prices for devices ranging from computers to satellite navigation systems.
Its impact will be widespread, even with only a third of WTO members signing on, notes Kent Jones, a Babson College economics professor and author of Reconstructing the World Trade Organization for the 21st Century. “It shows how the WTO system allows the 54 major producers of IT products to get to conclude a pact that extends free trade in these products to all 161 WTO members.”
“This is very positive news for the WTO,” agrees Andrew Lang, who teaches public international law at the London School of Economics. “For the moment, negotiations in the WTO are proceeding in a piecemeal fashion, as negotiators focus on smaller deals which can be done relatively quickly. With the Bali package last year [which lowered import tariffs and reduced bureaucracy] and now this deal, it seems this strategy is bearing real fruit.”
The world stilll needs the WTO, says Lang. “For all the difficulties of negotiating trade rules in a multilateral setting, multilateral deals are still, rightly, the gold standard.”
