A group of fifty-three producers of Information Technology (IT) products, today agreed to eliminate customs duties on 201 IT products. The countries involved, who collectively account for roughly 90% of world trade in these products, concluded this agreement during the 10th Ministerial Conference of the World Trade Organisation (WTO), held in Nairobi, Kenya. Frontier (Europe)’s recent research on new IT activities, including the Internet of Things underscores the wider economic benefits of IT investment and diffusion through trade.
As the agreement was concluded under the auspices of the WTO, the tariff-eliminating commitments implemented by the parties to the agreement are automatically extended to all 162 Members of the WTO, in keeping with the principle of Most-Favoured Nation Treatment. The direct benefits of the agreement are expected to be significant, given that trade in the goods covered account for an estimated 10% of world trade. But it is the demand-side benefits that are expected to be most significant.
The new agreement, which covers products such as new-generation semi-conductors, medical equipment, and portable interactive education devices, is relevant to a range of sectors from health and education to telecommunications and precision engineering. Academic research suggests that about 80-90% of economic benefits from IT lie outside the IT-producing sector—with the substantial majority of gains going to firms and sectors outside of IT that adopt these technologies. In that regard, the benefits of this agreement could have a wide reach.
Frontier (Europe) regularly advises clients on technology, trade policy and growth.
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