A new tentative agreement was reached by 58 WTO members,
including Canada, with respect to the WTO's Information
Technology Agreement (ITA). It will impact not only Canada's
export of items covered by the ITA, but will also have a positive
effect on imports of these items into Canada.
On July 24, Minister Fast, Canada's Minister of
International Trade, announced the ITA's expansion
"breakthrough" noting that tariffs for an over 200
additional information and communications technology (ICT) and
related products will be eliminated.
The Information Technology Agreement
The WTO's Information Technology Agreement was concluded in
1996, by 29 WTO members. To come into force, the agreement had to
be accepted by states representing 90 percent of the world's
trade coverage of IT products. The original 29 countries
represented only 83 percent of world's trade coverage in IT
products. Yet in the months following the conclusion of the
agreement a number of other countries expressed interest, reaching
90 percent requirement so that the ITA entered into force on July
Since 1996, the number of participants to the ITA agreement grew
to 81, which now represents 97% of the world trade in IT products.
The ITA is solely a tariff cutting mechanism binding member states
to reduce all products listed in the Declaration to a zero-tariff.
In addition, because any commitments undertaken under the ITA are
on a most-favoured-nation basis, WTO members can equally benefit
from duty-free trade of IT products.
While ITA's own Ministerial Declaration and implementation
document provides for periodic review of the list of products,
until now there was no consensus among the Parties. As such, no
additional items were added since the original list was released in
1997, when the ITA came into force.
ITA Tentative Accord and its Impact on Canadian Exports and
Over the years, technological advances have contributed to
renewed efforts in 2012 to negotiate and extend the ITA to cover
more than 200 additional products. The tentative accord reached on
July 18, 2015 aims to eliminate tariffs for an additional 200 ICT
and related products. The WTO announced that this trade liberalization is
valued at over $1.3 trillion per year.
Canada's ICT industry, consisting mainly of small and
medium-sized enterprises, spans over a variety of sectors in the
economy, such as manufacturing telecommunication equipment,
software development, digital media and microelectronics. The
existing ITA covers a large number of high technology products,
including computers, telecommunication equipment, semiconductors,
software and scientific instruments.
Canada's information and communication technology companies
export approximately 60% of ICT products manufactured in Canada.
The Canadian Government reports that Canada already exports a number
of the items included in the additional 200 ICT products recently
negotiated, such as flight simulators, audio-visual products and
parts, semiconductors and electronic integrated circuits,
telecommunications products, software, media storage devices, radar
apparatus, video game consoles, medical devices and navigational
With expanded ICT sectors in Canada in the fields of software
development, computer and communication services, data processing
and communications equipment, Canada stands to benefit from the
trade liberalization of ICT products both when exporting and
importing such products. Canadians will be able to import duty-free
IT products from countries like China and Japan, bolstering
Canadian trade for IT products covered under the ITA.
An Initial Environmental Assessment on the expansion of
products coverage reported that the Canadian imports of ICT
products are expected to increase between C$30.7 and C$38 billion,
depending on the finally agreed upon list of ICT products. It is
anticipated that the largest increase of new imports into Canada
would come from China, Japan and the EU.
To bring this tentative agreement into effect, each member state
must ratify the agreement, by bringing the tariffs on individual
products covered by the expanded list down to zero and provide
revised tariff schedules to the WTO.
The WTO expects these measures will be implemented
before December 2015, which marks the 10th Ministerial
Conference to take place in Nairobi, Kenya, so that the ministers
can approve the results. The expanded ITA will enter into force
some time after that.
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