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The Information Technology Agreement: An Assessment of World Trade in Information Technology Products

Author(s)

Michael Anderson, Jacob Mohs


Abstract

The Information Technology Agreement (ITA), a multilateral agreement emerging from the Uruguay Round, eliminates tariffs on specific technology and telecommunications products for member countries. Primary goals of the ITA are increased trade and competition through trade liberalization for information technology (IT) products, and the global diffusion of information technology. The ITA went into effect in 1997 with 29 WTO member countries and now includes 72 WTO members. It covers over 95 percent of total world trade in IT products, currently estimated at $4 trillion annually. The emergence of complex global supply chains for IT products, rapid deployment of new technologies, and technology convergence since the ITA’s inception, shine new light on the role of the ITA in global trade. This paper provides an overview of the ITA, describes the level of tariff liberalization associated with membership, and discusses the changing composition of ITA membership. The paper further examines ITA trade between 1996 and 2008, highlighting the changing composition of trade by leading exporting and importing nations and profiles ITA trade by product segment, focusing on computers, semiconductors, and telecommunications equipment. The paper finds a significant shift in ITA trade to Asia, particularly China, and to a lesser extent to Eastern Europe. Significant developments in global ITA trade include, increasing diversification of ITA members’ trade and economic profiles and expanding trade participation by developing countries.