WTO IT agreement wins crucial support

WTO IT agreement wins crucial support

Tani Freedman

GENEVA (AFP): A draft pact to free trade in information- technology products won vital support from six countries at the weekend and can now be put into effect, trade officials said here yesterday.

The countries adhered to the pact before a Saturday deadline requiring support of countries accounting for at least 90 percent of world trade in information technology (IT) products. This trade is estimated to be worth about 500 billion dollars per year.

Twenty eight countries signed the Information-Technology Agreement (ITA) at a World Trade Organization Ministerial (WTO) meeting in Singapore in December after intensive negotiations. The group represented more then 80 percent of trade in IT products, falling short of the target.

The six new members -- Malaysia, Thailand, Rumania, Estonia, India and Israel -- bring the share of world trade in such products to above 90 percent, trade officials said.

Malaysia is a key player, as it accounts for about five percent of global trade in the sector. Thailand accounts for about three percent of trade.

Three countries, New Zealand, Costa Rica and Macau, submitted their proposals in early February.

The agreement is intended to eliminate duties on trade in IT products such as computers, fax machines, modems, pagers, semi- conductors and software, starting from July 1. Tariffs are due to be phased out by 2000.

March 1 was also the cut-off date for members to send in their tariff cutting schedules.

The next significant date on the agenda is April 1, which is when members' schedules have to be reviewed and approved. The United States led the drive for liberalization, saying producing and consuming countries would reap special benefits from free trade in the IT market.

The United States is the biggest trader in the field, with almost a quarter of the market. Japan is second with 15.6 percent followed by the EU with 12.2 percent and Singapore with 10.7 percent.

South Korea has 5.9 percent and Hong Kong 4.3 percent. The negotiation of the ITA "will help immeasurably to open up important new commercial opportunities for leading edge U.S. manufacturers and exporters," deputy U.S. trade representative Jeffrey Lang said in a speech late February.

"This agreement -- covering a sector accounting for a trillion dollars annually in global production...also helped to dispel the myth that trade liberalization could only occur through comprehensive negotiating rounds."

However, protectionist voices in the U.S. Congress are calling for the U.S. to amend the pact by withdrawing its offer to end the 9.6 percent tariff on imports of capacitators by 2000.

The U.S. had sought to keep out capacitators, which regulate the flow of electrical current, from a pact in Singapore but caved in on pressure from the European Union.