More than 50 countries agreed on Friday to eliminate tariffs on a wide range of technology goods like medical devices, navigation equipment and advanced semiconductors in a trade agreement that should benefit American manufacturers, consumers and the global economy.
More than 50 countries agreed on Friday to eliminate tariffs on a wide range of technology goods like medical devices, navigation equipment and advanced semiconductors in a trade agreement that should benefit American manufacturers, consumers and the global economy.
Signatories to the Information Technology Agreement, which covers 201 product categories, include the United States, the European Union, China, South Korea and other members of the World Trade Organization. International trade in those goods totals about $1.3 trillion a year, or about 7 percent of all trade.
Negotiators say this agreement is the most significant deal struck at the WTO in almost two decades. Completion of the much more substantial agreement known as the Doha Round, which began in 2001 and includes all 161 WTO members, has been delayed by disagreements between countries like the United States and India.
Given the slow progress on the Doha Round, some countries have sought to reduce trade barriers through bilateral, regional and sector-specific trade deals. Under sector-specific deals, countries agree to eliminate tariffs on a list of goods. Some WTO members, including the United States, are negotiating a similar deal on environmental goods like solar panels.
Sector-specific deals tend to benefit the whole world even though they are not signed by the entire WTO membership because signatories agree to charge no tariffs on the listed products even if they are exported by nonsignatories. By contrast, the benefits of bilateral or regional pacts are reserved for countries that are party to them.
Sector-specific deals are focused on eliminating tariffs and do not cover contentious issues like labor, intellectual property and environmental standards. Those issues are big components of the regional trade pacts that the United States is currently negotiating — the Trans-Pacific Partnership, which includes 12 Pacific Rim nations, and the Transatlantic Trade and Investment Partnership with the European Union — which is why they take years to negotiate and can face significant opposition.
The tech trade deal will require markets like China and the European Union to eliminate tariffs, which are as high as 35 percent on some goods, between 2016 and 2019. With the United States exporting about $100 billion a year in products covered by the pact, businesses and workers could see big benefits if lower costs to foreign consumers create higher demand for American products.
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