12:19 PM Mar 26, 1997
INFORMATION TECHNOLOGY PACT IN THE BAG
Geneva 26 Mar (Chakravarthi Raghavan) -- The plurilateral scrutiny of country schedules of participants in the Information Technology Products agreement was due to be completed Wednesday, setting the stage for a sectoral zero-tariff trade liberalization to begin 1 July and to be completed by major participants by 2000. The product coverage comprises mainly computers (including printers, scanners, monitors, hard-disk drives, power supplies), telecom products (including fax machines, modems, pagers etc), semi-conductors (including chips and wafers), semi-conductor manufacturing equipment, soft-ware products (including diskettes and CD-ROMs) and some categories of scientific instruments. The agreement is a plurilateral one, with the participants to apply the tariffs on an MFN basis to all WTO members, as they are bound to under the WTO. The 41 participants include the major industrial nations who account for the bulk of the export and import trade in this sector, as also a number of developing countries, mainly from Asia. Some 22 schedules -- those of Australia, Canada, Costa Rica, Estonia, EU (taking the 15-member EC as one), Hong Kong, Iceland, India, Indonesia, Japan, Korea, Macau, Malaysia, New Zealand, Norway, Romania, Singapore, Switzerland, Chinese Taipei (which is negotiating accession to the WTO), Thailand, Turkey and the USA -- have been scrutinised in great detail and approved. Work on the schedules of five more (those of Israel, Panama, Poland, Slovak Republic and Czech Republic) were due to be completed by Wednesday. The pact itself was essentially negotiated between the majors -- US, EC, Japan and Canada -- and though was peripheral to the preparatory process for the Singapore Ministerial meeting of the WTO of December 1996, virtually occupied the center stage there and hailed as the major achievement. While the pact provides for the industrialized nations to bring their tariffs to zero by year 2000, five developing country participants developing country participants have been given some more time, on a small range of products, to achieve zero tariffs - the periods ranging from to 2002 to 2005. India which had been negotiating to get time till 2007, settled for time till 2005 by when it will bring to zero tariffs on some 116 tariff lines - including computers, peripherals and computer systems. None of the African countries and, except for Costa Rica and Panama, none of the Latin American and Caribbean countries have shown any interest in the pact. But several of the Asians, who already are involved in this trade and hope, by committing themselves to the pact, to attract foreign investment from the information technology TNCs to set up production, have joined the accord. Most of them are really importers. But their consumers, as well as trade and industry, would benefit from the phased tariff reduction, and given the increasing importance of information technology in production, could hope to benefit by improved competitivity in industry and services. They would also be able to participate in the institutional arrangements for the pact, which would decide on inclusion in the future of their product lines, and hope to be able to influence this in the future. The phased tariff reduction is to begin on 1 July and completed by 2000, excepting for some product lines of developing countries where the schedules provide for a longer span to achieve zero tariff