On December 16, 2015, Canada and 53 other members of the World
Trade Organization (WTO) reached an agreement on the expansion of
the Information Technology Agreement ("ITA"). The result
of the agreement will be the elimination of customs duties and
charges from 201 information and communication technology and
related products (the "Products"). Because the original
ITA dated from 1996, it did not apply to many of the technologies
that have been developed over the past 20 years. The expansion of
the ITA is intended to ensure that the newly innovated Products
receive the same tariff treatment as those that were included in
the 1996 version of the agreement.
The complete process will involve three steps, with some tariffs
being lifted as early as July 1, 2016 and others remaining in
effect for up to three years after that date (the final deadline
for eliminating the tariffs is July 1, 2019, although an additional
delay may be granted for some products under exceptional
circumstances). In general, however, the majority of the relevant
tariffs will be lifted sooner rather than later: nearly 65% of
them, amounting to 88% of imports of the Products, will be
eliminated by July 1, 2016. As of today, only 24 WTO members'
schedules and staging matrices have been approved (including
Among the 201 Products covered by the expansion of the ITA
GPS navigation systems and
Video game consoles;
New generation multi-component
integrated circuits; and
Certain medical products (e.g.
magnetic resonance imaging equipment and ultra-sonic scanning
The 53 parties to the expansion of the ITA include, inter
alia, the United States, countries of the European Union,
Australia, China, Japan and South Korea. The agreement imposes an
obligation on the 53 WTO members to eliminate tariffs on the
Products. The new tariffs (or absence thereof) on the Products will
replace the Most-Favoured-Nation rate (the "MFN rate")
and therefore all 162 WTO members will benefit from the duty-free
access created by the expanded ITA in those specific markets.
The expansion of the ITA is estimated to encompass $1.3 trillion
globally in annual trade in the Products. The ITA will eliminate
import duties that were as high as 35% in certain countries.
Overall, the expanded ITA will improve market access and
Impact on Canada
The impact of the elimination of tariffs on the Products will
nonetheless most likely be uneven in different markets. In Canada,
exports totaling nearly $21.7 billion annually will be covered
under the expanded ITA. For importation purposes into Canada, most
products covered by the ITA are already duty free under the MFN
rate. The items upon which tariff rates will be eliminated in
Canada include telecommunications satellites, headphones, speakers
and optical fibres. The tariff on these products generally ranges
from 2 to 8.5%, depending on the product.
While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).