Time to Expand the ITA Again

by John Neuffer, President and CEO

With a lot of auspicious sunny weather forecast for the week, a sizable high-tech industry delegation is converging on Geneva to advance the idea of again expanding product coverage of the Information Technology Agreement (ITA), originally launched by the World Trade Organization (WTO) in 1997 to eliminate tariffs on a broad swath of tech products from cell phones to computers.

The delegation will meet WTO Director-General Ngozi Okonjo-Iweala, other leadership at the WTO, and numerous countries with missions in Switzerland’s second-most populous city. Several other associations will be joining SIA: the Consumer Technology Association (CTA), DIGITALEUROPE, the European Semiconductor Industry Association (ESIA), and the Japan Electronics and Information Technology Association (JEITA).

In a clarion call to action released today, more than 40 associations from around the world — from Bangladesh to Bahrain and representing millions of workers — are urging ITA members to launch another ambitious new round of ITA expansion negotiations (or ITA-3) to significantly expand product coverage of the agreement.

“While ITA-2 [the previous round of product expansion] captured an impressive $1.3 trillion in tech trade in 2015, not a single additional product has been added to the agreement in the ensuing seven years, even though the tech sector is bursting with innovation and demand for digital technologies is growing exponentially,” the statement underscores.

As spelled out in an excellent analysis of the benefits an ITA-3 would deliver, the Information Technology & Innovation Foundation (ITIF) projects an expanded ITA would grow the global GDP a whopping $800 billion over the next decade. For America, an ITA-3 would expand our country’s GDP by over $200 billion, support the creation of nearly 80,000 new jobs, and boost U.S. tech exports by $3.5 billion. For developing economies, 10 years of ITA-3 accession would grow their tech capital stocks on average by an impressive 60 percent, according to ITIF.

An ITA-3 would bring many important emerging technologies driving the global economy under ITA coverage, further bridge the digital divide, help address climate change, promote better remote healthcare solutions, give a bigger window to the world for students learning remotely, make our supply chains more resilient, and better facilitate remote work.

The expanded ITA we are contemplating would eliminate tariffs on 3D printers (think reducing transportation costs and associated pollution), lithium-ion batteries (think smoke detectors and e-books), flat panel displays (think providing a bigger window to the world for students learning remotely), commercial-use drones (think delivery of vaccines and medications to remote locations), and patient monitor systems (think life-saving technologies).

In the U.S. context, as our Congress moves to boost U.S. manufacturing competitiveness and supply chain resiliency under USICA and the America COMPETES Act, it’s important to further open global markets for U.S.-built technologies, so our products have somewhere to go. Manufacturing onshoring and bigger global markets go hand in hand. They are two sides of the same coin.

And let’s not forget how important an ITA-3 would be to the WTO, which is struggling to demonstrate its relevance as still being in the game of expanding global trade.

So, it should come as no surprise the global tech industry is calling for a new round of negotiations to further expand this critical agreement. This is a common-sense initiative that would strengthen not only the semiconductor industry and the tech sector, but also developing and developed economies alike. There are lots of tough trade policy debates raging in Washington and the WTO. But this negotiation would be low-hanging fruit that should be plucked.