Taiwan bullish on information technology pact expansion

2015/12/21

The recent decision by the World Trade Organization to expand its Information Technology Agreement was welcomed Dec. 17 by the ROC Ministry of Economic Affairs.

Set to take effect July 1, 2016, at the earliest, the deal eliminates tariffs on 201 IT products with projected international trade of more than US$1.3 trillion a year, or 10 percent of the global total. The regime will be implemented in four stages over seven years.

Agreed by 24 members during the WTO’s 10th Ministerial Conference the day before in Nairobi, the agreement also contains commitment to tackling nontariff barriers in the sector. It is the first significant tariff-cutting deal concluded by the international trade body since 1996.

“As a major exporter of information and communications technology products, Taiwan will benefit tremendously from the landmark pact,” an official from the MOEA Office of Trade Negotiations said.

“With Taiwan’s annual exports of covered products estimated at US$90 billion, the agreement is forecast to generate US$820 million in net savings for local firms. It will also strengthen the country’s position in the global supply chain.”

According to the ministry, the ITA Expansion encompasses 136 items in which Taiwan enjoys great market advantages. These include digital cameras, display components, GPS navigation equipment, integrated circuits, mobile phone components, polarizers and set-top boxes.

Under the pact, 73 percent of Taiwan’s related exports will enjoy duty-free access to 10 key markets next year, with tariffs on another 19 percent scrapped by 2019.

Citing locally produced set-top boxes as an example, the official said 90 percent of such items are bound for the U.S. and subject to import duties of 3.9 percent to 5 percent. After these rates drop to zero next year, savings could hit US$45.5 million.

Industry analysts are bullish on the development, predicting it will boost Taiwan exports to emerging markets such as Southeast Asia and mainland China.

Although the expanded list does not include display panels or machinery, two major exports for Taiwan, the MOEA said it will springboard off the agreement and continue negotiating free trade agreements with the country’s major trading partners for greater tariff-free market access.

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=240349&ctNode=2194&mp=9)