Expansion of Information Technology Agreement concludes

On December 16, 2015, the WTO negotiation on the expansion of Information Technology Agreement (hereinafter referred to as the expansion) was announced to be concluded in Nairobi, Kenya. The participants reached a comprehensive agreement on the expansion, and issued the Minister Declaration on Expanding Trade on Information Technology Products.

201 products were newly added to the agreement on the basis of the product range of the Information Technology Agreement of 1996, including information and communication technology products, semiconductor and its production equipment, audio-visual products, medical apparatus, and instrument and meter which closely were related to modern scientific development. Tax reduction of all the products is scheduled to be implemented since July 1, 2016. The tax of most of the products will be canceled completely in three to five years, which will apply to all WTO members on the basis of the most-favored nation treatment. The tax of all the Japanese products will be canceled immediately as soon as the agreement comes into force. The tax of all the U.S. products will be canceled within 3 years. The tax of most of Korean products will be canceled within 3 years and the tax reduction periods of many products are shorter than the result of China-ROK FTA negotiation.

The expansion was launched in May, 2012. After almost 20 rounds of negotiations in 3 and half years, the comprehensive agreement was finally reached in December 2015. There were 24 participants and 53 WTO members attending the negotiation. The global trade volume of the expansion products of the participants reached US$ 1.3 trillion, accounting for 90% of the global trade volume of the related products.

The expansion is the WTO’s first important agreement on tax reduction in recent 18 years, showing again the WTO’s ability of conducting global trade negotiation. The agreement will become an important achievement of the 10th WTO Ministerial Conference which is held in Nairobi now. The agreement will inject positive energy for the other issues to reach consensus. Particularly, against the background of the weak growth of the world trade and the rampant trade protectionism, the agreement will boost the confidence of the business circle, and further enhance the liberalization of the world trade.

China entered the Information Technology Agreement officially in 2003, and has become the largest production and export country and the second largest import country of the world information technology products. China is an important participant of the global value chain of information technology products. China takes up about one quarter of the global trade volume of the expansion products, ranking the first in the world. The agreement of the expansion will benefit China to expand export of related products, and also will contribute to the reduction of the import cost of the related components and equipments, bringing benefits to the enterprises and consumers. At the same time, the agreement will enhance the consolidation of China’s status in the global value chain, promote the Chinese information technology products to expand to the high end of global value chain, drive industrialization through informatization, so as to promote “China Manufacturing 2025”. Besides, China’s active participating in the expansion is a specific reflection of its further reform and opening up, which will help to further strengthen the confidence of foreign investment, and enhance the level of opening up.

Source: http://english.mofcom.gov.cn/article/newsrelease/significantnews/201512/20151201224281.shtml

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