Expanding the trade agreement that eliminates tariffs on ICT products
WASHINGTON — The Information Technology Agreement (ITA), which eliminates tariffs on hundreds of information and communication technologies (ICTs), has been one of the most successful trade agreements in the world. the World Trade Organization, encouraging the uptake of ICT goods and services which, in turn, boost productivity and innovation in all sectors of the economy. And a new proposal to expand the ITA to cover 250 additional product categories would add $ 784 billion to the global economy over 10 years, including $ 208.6 billion in the United States alone, according to a new report.  of the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy.
“The ITA has been a catalyst in developing efficient global value chains and lowering the prices of ICT products that drive the digital economy,” said Stephen Ezell, vice president of global innovation policy at ITIF, co-author of the report. “The expansion of the ITA, as we have proposed, would generate tangible economic growth for the countries that accede – and the tax revenues they generate through enhanced economic growth would more than offset the tariff revenues they generate. give up. “
Originally implemented in 1996, the ITA now has 82 signatory countries, which together account for approximately 97 percent of world trade in goods covered by the ITA. In 2015, more than 50 countries came together to expand the ITA, adding another tranche of more than 200 innovative ICT products, including ICT products released after 1996 and products and components that were not included in the original agreement. . The expansion represented the first major WTO tariff reduction agreement in 19 years, producing annual tariff savings of at least $ 13.8 billion worldwide. Countries that joined the 1996 ITA and its expansion in 2015 have enjoyed statistically significant increases in their shares in total imports and exports.
The ITA has played an important role in the global growth of production and trade, as ICT products underpin the entire global digital economy, from semiconductors to servers, routers, computers, tablets and smartphones. . As ICT continues to evolve and support a much broader range of products, there is a global need for an ITA-3 to update the list of duty-free goods with 250 additional codes of product (grouping together more than 400 distinct ICT products) according to the ITIF.
The report uses econometric modeling to examine the impact of an expanded ITA on a sample of 14 countries, large and small, which are among the most important in the production and trade of ICT goods: Brazil, China, Costa Rica, Indonesia, Japan, Kenya, Malaysia, Nigeria, Pakistan, South Korea, Taiwan, Thailand, United States and Vietnam. Among the conclusions of the ITIF:
* Pakistan, Kenya, Brazil and Nigeria would benefit from the strongest relative GDP growth with respectively 3.2%, 2.2% and 1.6% additional over 10 years.
* The expansion of the ITA could help increase US GDP by more than $ 200 billion over a decade while increasing exports of ICT products by $ 3.5 billion, increasing the revenues of US ICT companies $ 12 billion and supporting more than 78,000 new jobs in the United States.
* Brazil, China, Japan, Kenya, Pakistan and the United States could each expect to generate more tax revenue due to growth than the expansion of the ATI would stimulate than they do. would renounce it in tariff revenue.
“A second extension of the ITA would cover many of the most innovative and advanced ICT products, including the most recent versions of these technologies,” said Luke Dascoli, research assistant in economic and technological policies at the ITIF and co. -author of the report. “These products already provide significant environmental, health and production benefits, and including them in a new iteration of the ITA would enhance competitiveness and lead to greater national and global economic growth.”