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Trade in ICT Goods and the 2015 Expansion of the WTO Information Technology Agreement

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Published
2015
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The WTO Information Technology Agreement (ITA) was extended in July 2015 with the goal of expanding the number of products that will enjoy duty free treatment when imported into economies that are members of the agreement. This note provides a first comparison of trade in ICT goods as defined by the Partnership on Measuring ICT for Development with trade in goods covered by the revised ITA agreement.

 

Equivalent to a market of more than $3 trillion, goods covered by the original ITA (ITA I) and by the revised ITA list (ITA II) represent almost one fifth (18%) of world merchandise imports. The expanded agreement currently has 54 participants which in 2013 accounted for 87% of world imports and 94% of world exports of goods covered by ITA I+II. Their corresponding shares of global ICT goods imports and exports were 88% and 94% respectively. Few developing and transition economies signed up to ITA I and even fewer to ITA II. There is no ITA II member from the Commonwealth of Independent States, only one from Africa (Mauritius) and three from Latin America (Colombia, Costa Rica and Guatemala). Developing Asian economies are better represented, but still less than in ITA I.

 

Many of the product codes included in the revised ITA are not covered by the ICT goods definition. In fact, ICT goods make up only just over a quarter of the product codes listed in ITA I+II. However, they account for twothirds of the value of imports of ITA I+II goods.

 

The non-ITA II members with the highest share of ITA I+II goods in their total merchandise imports are: Mexico (27%), Viet Nam (26%), Paraguay (21%), Mozambique (15%), Brazil (14%), South Africa (13%), Argentina (13%), Russian Federation (13%) and Rwanda (13%).

 

China, Hong Kong (China) and the United States are the top three exporters and importers of ITA I+II goods. Mexico and Viet Nam are the two largest exporters of such goods that are not participating in ITA II. As a result of the Most Favoured Nation principle, exports from all WTO members will enjoy duty free treatment of the listed goods in markets covered by the ITA II once the agreement has been fully implemented.

 

The analysis in this note is confined to a statistical comparison of trade flows and does not consider different tariff levels. For a full assessment of the impact of the ITA revision on member and non-member economies, a broader analysis would be required.

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