WASHINGTON/GENEVA – Trade negotiators have tentatively agreed to eliminate tariffs on an array of technology products valued at $1 trillion in global commerce, with Japan standing to benefit from ¥8 trillion of its annual exports becoming tariff-free, according to sources.
A final deal by the World Trade Organization’s Information Technology Agreement signatories is expected Friday to newly include some 200 products such as magnetic resonance imaging machines and video game consoles, the sources said.
The Abe administration and Japanese companies welcomed the tentative accord. A Panasonic Corp. official said tariff removal would promote sales of its products in many countries.
Minister of Economy, Trade and Industry Yoichi Miyazawa said before the agreement was made this weekend that it would “definitely be a plus for the Japanese economy.”
Countries such as the United States are in favor of expanding the product list, while China and other countries have been asking for some exemptions.
For Japan, more than ¥8 trillion ($64.5 billion) worth of exported products a year would be tariff-free under the new agreement, according to the sources.
The breakthrough took place at an ambassadors’ meeting Saturday at the European Union Embassy in Geneva.
“Very optimistic that we’ll have a final successful deal by the end of next week,” Roberto Azevedo, director general of the WTO, said on Twitter. “We have the basis for an agreement.”
The office of the U.S. Trade Representative (USTR) office hailed a “major breakthrough.”
“This will open overseas markets for some of America’s most competitive companies and workers,” USTR Michael Froman said in a statement. “We are confident that all parties will now give formal approval to their participation in what would be the first tariff-elimination deal at the WTO in 18 years.”
In talks that started July 14, members took on the question of various tariffs, notably on LCD screens, which were contested by Taiwan and China, and an EU request concerning car radios. South Korean negotiators withdrew their opposition to an extended agreement and members agreed to consider a draft list of covered products.
Tariffs on semiconductors, magnetic resonance imaging machines, global positioning system devices, printer ink cartridges, video game consoles and other products will be cut to zero under the deal, according to the USTR.
The expanded product list will now undergo consideration from trade ministers at their various capitals.
“We have the basis for an understanding,” Azevedo said in Geneva after the meeting. “The list is out, members are going to consult their capitals, and we will know by Friday whether we have final approval on the list of products and the declaration itself.”
The product list could pave the way for a finalized deal that would contribute as much as $190 billion to the global gross domestic product and support 60,000 U.S. jobs.
Technology manufacturers like Intel Corp., Samsung Electronics Co., Sandisk Corp. and Texas Instruments Inc. stand to benefit from the elimination of tariffs on some 250 products.
The 80 WTO countries that participated in the ITA talks account for about 97 percent of global trade in IT products.
The ITA requires participants to eliminate import tariffs on technology products on a most-favored-nation basis, meaning that any duty-free terms are applied to all WTO members.
In September, ITA negotiators will start talks on schedules of concessions for tariff reductions, also known as staging. That allows countries to gradually phase in the tariff reductions for certain products deemed too sensitive for the ITA’s various signatories.
Negotiators will also hold technical negotiations with the goal of completing the agreement by the WTO Ministerial Conference scheduled for Dec. 15 to 18 in Nairobi.
U.S. technology industry officials are hopeful the deal could enter into force as soon as July next year.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.