Technology company representatives are hailing a breakthrough in talks to eliminate tariffs on a range of high-tech goods.
The U.S. and China announced Monday that they had worked out a deal to restart the talks, which are aimed at eliminating tariffs on 200 new products.
{mosads}“This agreement represents a major breakthrough in global trade for the high tech sector,” said Bruce Mehlman, executive director of Technology CEO Council (TCC).
The Information Technology Agreement (ITA) is expected to eliminate tariffs on semiconductors, medical devices and other goods.
Proponents had said the talks needed to be expanded to include new goods given advances in technology. An existing deal already had eliminated tariffs on a host of goods. The new negotiations would aim to expand that list.
“The information technology sector has changed dramatically in the 17 years since the ITA first went into effect,” Mehlman said.
Tariffs could be eliminated on computer software and software media, such as solid state drives, next generation semiconductors, video game consoles, printer ink cartridges, GPS devices and medical devices such as MRI machines and CT scanners.
The new talks were announced by U.S. Trade Representative Michael Froman during President Obama’s visit to China.
“To give you some idea of the importance of this agreement, the last time the [World Trade Organization] agreed to eliminate tariffs on IT products was in 1996 when most of the GPS technology, much of the medical equipment, software, and high-tech gadgetry that we rely on in our daily lives didn’t even exist,” Froman said in Beijing.
“In fact, since that time, global trade in these types of high-tech products have reached $4 trillion annually, and despite that explosion of trade, the coverage of the ITA products has never been expanded.”
A fresh deal would eliminate tariffs on an estimated $1 trillion in annual global sales of information and communications technology products. More than $100 billion now come from the United States.
“The agreement between the U.S. and China to expand the ITA is a hard-fought victory for the U.S. semiconductor industry and a big win for the U.S. economy and consumers around the world,” said Brian Toohey, president and CEO of the Semiconductor Industry Association.
Lawmakers also hailed the new talks.
Sen. Orrin Hatch (R-Utah), ranking member of the Senate Finance Committee, said the renewal of the negotiations “would be a big win for American manufacturers who would then be able to increase their global footprint on cutting-edge technologies.”
Senate Finance Committee Chairman Ron Wyden (D-Ore.) said “news of an agreement with China will pave the way for a successful ITA expansion deal, which means more good-paying jobs by opening global markets to Oregon manufacturers and exporters of advanced semiconductors, high tech medical equipment and other products.”
ITA expansion talks started two years ago and discussions now include 54 participants that account for about 90 percent of global trade in products under negotiation.
Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers, said expanding the agreement to include “new technologies is critical not just for manufacturers of this equipment but for all the manufacturers that consume these technologies to make them more productive and globally competitive.”
“The NAM applauds the administration’s leadership and persistence in moving these negotiations forward and looks forward to the conclusion and implementation of an expanded ITA as quickly as possible,” she said.
The Entertainment Software Association encouraged participants to finish the new talks by the end of the year.