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The World Trade Organisation (WTO) has agreed to eliminate trade tariffs on more than 200 technology products, paving the way for price cuts across a range of IT offerings from 2016.
These products include semi-conductors, magnetic resonance imaging machines, manufacturing tools for printed circuits, telecommunications satellites, touchscreens and more.
Furthermore, the agreement also sets out a commitment to addressing other barriers to trade in the IT sector, while maintaining a roll-call of products that could be included on the list at a later date.
The move marks an expansion of a similar deal waved through by the WTO in 1996, which benefited 81 of the organisation’s members and saw prices fall across a range of products.
However, many of the technology products that consumers and businesses rely on today weren’t covered by the 1996 deal, so in 2012 members began work on expanding it.
As a result, the updated arrangement will benefit all 161 members of the WTO, allowing them to take advantage of duty-free market access on the 201 listed products when participating in trades with one another.
Working through the WTO deal
The WTO was set up in 1995 to establish rules on how purchasing and trade agreements between different countries should be negotiated.
Read more about IT pricing
- The growing strength of the US dollar has big implications for European CIOs' IT budgets, as unfavourable exchange rates with the euro force technology suppliers to raise their prices to make up the shortfall.
- Telecoms regulator Ofcom has proposed a new series of controls on the wholesale prices charged by BT for leased-line services, high-speed links for large businesses and network owners that will bring prices down to cost over the next three years.
This latest deal was voted for by 54 of the WTO’s 161 members, who now have until October to draft guidelines that outline how the terms of the proposals will be met, in the hope of having them officiated by December 2015.
This, the WTO claimed, should lead to tariffs being cut on some of the listed products by 2016, and all of them within the next three years.
Roberto Azevêdo, director-general of the WTO, said the “landmark deal” should open up new economic opportunities across the globe.
“Annual trade in these 201 products is valued at over $1.3tn per year, and accounts for approximately 7% of total global trade today. This is larger than global trade in automotive products – or trade in textiles, clothing, iron and steel combined,” he said.
“Eliminating tariffs on trade of this magnitude will have a huge impact. It will support lower prices – including in many other sectors that use IT products as inputs – it will create jobs and it will help to boost GDP growth around the world.”