Study: Expansion of IT trade pact would bring huge benefits

Tech groups call for the U.S. and other countries to add dozens of products to the tariff-busting Information Technology Agreement

An expansion of a 15-year-old IT trade agreement could bring huge benefits to the U.S. economy, including about 60,000 new jobs, according to a study released Thursday.

Adding new products to the Information Technology Agreement (ITA), launched in late 1996, could increase U.S. exports of information and communications technology products by US$2.8 billion and could boost the revenues of U.S. IT firms by $10 billion, the Information Technology and Information Foundation (ITIF) said in the new study. Seventy-three countries have signed the agreement.

Several IT products are not included in the agreement, which removes import tariffs from IT products. Among the products not covered by the ITA are DRAM chips and a new class of semiconductor chips, a major export for the U.S.

Other products not covered include DVD players and video cameras, as well as several products that weren't available in 1996, including modern gaming consoles, GPS systems and flat-panel displays, the ITIF study said.

U.S. businesses make up more than a quarter of the world's information and communications technology (ICT) market, the study said. Even if products sold by U.S. firms are made in China or other countries, the U.S. will benefit, the study said. "It's not just about exports from within U.S. borders; making the ITA stronger will expand the overall global ICT market, making the U.S. ICT industry stronger in the process," the study said.

An expansion of the products covered by the ITA would benefit other countries as well, the ITIF report said. Developing countries account for more than 40 percent of the ITA membership, the study said. A new agreement would reduce tariffs on products imported into those countries and could lead to an expanded IT industry in countries such as India, Indonesia, Malaysia and the Philippines, the study said.

U.S. President Barack Obama and U.K. Prime Minister David Cameron should push for an expansion of the ITA, wrote Dean Garfield, president and CEO of the trade group Information Technology Industry Council, in a blog post. The U.S. and other nations have talked in recent months about reopening talks about the ITA, but so far, "it's been only talk," Garfield wrote.

"The ITA is ready for an upgrade, especially given the breathtaking speed of innovation and technology products," he added. "It is time to expand the list of products and, at the same time, accelerate economic growth and job creation."

Last July, a coalition of tech trade groups, including Consumer Electronics Association, the Telecommunications Industry Association and TechAmerica, called on the Office of U.S. Trade Representative (USTR) to include several products in a revamped agreement. The request came in response to a May request from the USTR asking how the agreement should be expanded.

Among the dozens of products that should be included, the groups said, are printer ink, microprocessor cooling fans, industrial robots, DVD vending kiosks, videophones, MP3 players, smart cards, set-top boxes, communications satellites and mobile-phone LCD screens.

"The benefits of this bold undertaking would be significant and sweeping," the groups wrote in a letter to the USTR. "We are deeply committed to working with the U.S. government to advance such an initiative, which will expand exports, increase jobs, spur innovation, and promote growth both at home and abroad."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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Grant Gross

IDG News Service
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