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FACT SHEET: Supporting Economic Growth at Home and Abroad by Eliminating Trade Barriers on Information Technology Products

*Updated July 2015

In Geneva today, negotiators reached a breakthrough towards expanding the scope of goods covered by the Information Technology Agreement.  This breakthrough paves the way for the swift conclusion of the first major tariff-cutting deal at the World Trade Organization (WTO) in 18 years, and promises a major boost to U.S. technology exports and the jobs that support them.

“We are very pleased at the big breakthrough in negotiations to expand the Information Technology Agreement (ITA) just reached in Geneva, which will open overseas markets for some of America’s most competitive companies and workers,” said Ambassador Michael Froman.  “The United States led efforts this week to broker compromises in finding the path forward.  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.”

Negotiators began the latest round of negotiations on July 14, ultimately producing a Declaration text and a final product list which were circulated today to all participants for final review and confirmation in capitals.  In November 2014, an earlier bilateral breakthrough between President Obama and President Xi had paved the way to the result today.      

A successful ITA expansion would allow substantial expansion of "Made in America" ITA exports to growing markets without the imposition of burdensome tariffs, and support tens of thousands of well-paying U.S. manufacturing and technology jobs. 

Eliminating Barriers to High-Tech Trade

  • Since the ITA went into force in 1997, global trade covered by the ITA has more than tripled, rising to more than $4 trillion in annual trade.  Despite extensive advances in technology, however, the product scope of the agreement has never been expanded.
     
  • More than 200 tariff lines will be reduced to zero under an expanded ITA.
     
  • Next generation semiconductors, medical equipment, GPS devices, video game consoles, and computer software are among the high-tech products that will see tariff elimination.

Economic Boon at Home and Across the Globe

Industry estimates have concluded that a successful expansion of the ITA agreement would:

  • Support up to 60,000 additional U.S. jobs.
     
  • Eliminate tariffs on roughly $1 trillion in annual global sales of information and communications technology products of which more than $100 billion now come from the United States.
     
  • Increase annual global GDP by an estimated $190 billion.
     
  • Boost productivity and growth across the global economy, particularly in developing countries.

Background

  • An ITA agreement will unlock global economic opportunity at home and abroad. Industry estimates have concluded that a successful expansion of the ITA agreement would eliminate tariffs on roughly $1 trillion in annual global sales of information and communications technology (ICT) products and increase annual global GDP by an estimated $190 billion. Because the U.S. is a global leader in high-tech manufacturing and production, industry also estimates that an expanded ITA will support up to 60,000 additional U.S. jobs. In addition, an agreement will lower costs for downstream manufacturing and services industries that rely on ICT parts and components as inputs, increasing their competitiveness.
     
  • Expanding ITA supports U.S. manufacturing and technology industries. Many of the products that would see tariff elimination under an expanded ITA are in key U.S. industries that support good jobs, including in the manufacturing and technology sectors. A sample of some of the impacted products and the size of the tariff reduction they would benefit from, include:
    • Next generation semiconductors – Tariffs up to 25 percent reduced to zero.
    • Magnetic Resonance Imaging (MRI) machines -- Tariffs up to 8 percent reduced to zero.
    • Computed Tomography (CT) scanners – Tariffs up to 8 percent reduced to zero.
    • Global Positioning System (GPS) devices - Tariffs up to 8 percent reduced to zero.
    • Printed matter/cards to download software and games – Tariffs up to 10 percent reduced to zero.
    • Printer ink cartridges – Tariffs up to 25 percent reduced to zero.
    • Static converters and inductors – Tariffs up to 10 percent reduced to zero.
    • Loudspeakers – Tariffs up to 30 percent reduced to zero.
    • Software media, such as solid state drives - Tariffs up to 30 percent reduced to zero.
    • Video game consoles – Tariffs up to 30 percent reduced to zero.      
    • An expanded ITA would also eliminate import duties on a range of additional technology products including high-tech medical devices, video cameras, and an array of high-tech ICT testing instruments.