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Issue Report

Collection of full-length papers and in-depth analysis of economic and management issues.

Revision of the WTO Information Technology Agreement: Key Issues and Potential Impact

Revision of the WTO Information Technology Agreement: Key Issues and Potential Impact

KWON Hyuk-Jae

Aug. 28, 2013

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The ITA is a multilateral WTO agreement that requires signatories to remove all tariffs on an agreed list of IT products. Following the ITA’s inception in 1997, global IT trade more than tripled. Advances in the IT industry over the past 16 years, however, have made ITA revision a pressing necessity. Expectations are high that the ITA can be updated by the end of 2013.

Korea’s IT industry has provided one-quarter of its exports over the last 10 years, making the ITA revision a matter of critical national importance. ITA expansion could boost global IT trade by about $800 billion annually and add $190 billion to world GDP each year.

Negotiations to revise the ITA are focused on expanding the list of eligible items. However, contention exists regarding the scope of expansion. The US and Japan have advocated for the inclusion of digital TVs and home appliances as well as game consoles, navigational instruments and medical equipment. The EU on the other hand has argued against including flat-panel monitors because of its weaker IT competitiveness. Emerging countries, notably China, have not yet taken a position, though they generally favor the inclusion of low-end products.

ITA expansion will have a positive impact on Korea, given its strong competitiveness in digital TVs and electronic home appliances. However, decreased tariff barriers can also lead to increased non-tariff barriers (NTBs), requiring Korea to develop appropriate response measures.

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