Trade in Information Technology Goods: Adapting the ITA to 21st Century Technological Change

In this new ECIPE Working Paper, Iana Dreyer and Brian Hindley analyse the ITA’s structure and development. The ITA has been a great success, but it has problems. It does not cover enough relevant goods. In particular, it excludes many consumer electronics. In an era of “convergence” among ICT services and devices, this exclusion is increasingly problematic. It does not address non-tariff barriers, which are often a greater impediment to trade than tariffs. The list of products on which it is based is too detailed and rigid: it creates frictions over classifications at customs, three of which have now landed with the WTO’s dispute settlement body. The mechanisms it had foreseen to expand its coverage have failed. The authors argue that new negotiations should start once the WTO dispute is settled to remove these obstacles to free trade in ICT goods. A new ITA should include all consumer electronics and some provisions on tariff barriers. Its structure should be based on a flexible broad definition to accommodate rapid technological change and include key provisions on non-tariff barriers.