TRADE: Liberalisation of Information Sector Excludes South

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Sep 30 1997 (IPS) - The majority of information technology products traded worldwide have paid 25 percent less tariffs since July. But broad sectors of the developing world are still excluded from the trend towards liberalisation.

The first phase in the reduction of tariffs was implemented Jul. 1, in compliance with the Accord on Information Technology (AIT) signed Mar. 26 by some 40 countries.

The signatories, which include all industrialised powers, control 93 percent of a market that according to the latest World Trade Organisation (WTO) estimates moves 600 billion dollars in merchandise annually.

But the signatories to AIT are not only rich countries. They comprise all recently industrialised Southeast Asian nations, as well as India, a computer programming giant. But no African or Arab countries and only three Latin American nations – Costa Rica, El Salvador and Panama – have signed the accord which aims for the total elimination of tariffs by Jan. 1, 2000.

The WTO Committee of Participants in the Expansion of Trade in Information Technology Products confirmed in its first session this week that signatories to the accord now total 43. That number includes Latvia, currently in the process of admission to the WTO, and Taiwan, which is not part of the international organisation.

The United States, which applied pressure until securing consensus on the AIT during last December’s ministerial-level WTO conference in Singapore, is pushing for an expansion of the list of products covered by the accord.

Computer systems and parts, telecommunications products, semiconductors, equipment for manufacturing semiconductors, software and hardware and scientific instruments figure among the categories in which trade is being freed up.

One of the peculiarities of the accord is that it covers computer screens but not television screens, expected to surge in importance with the new interactive communication technologies.

But the U.S. representatives to the WTO have demanded that a strict timeframe be established for the expansion of the list of products covered by the accord, arguing the speed at which changes in information technology take place.

The U.S. delegation wants the expanded list of products to be approved in September 1998, and to enter into effect the following January.

The key interest of the United States is for the AIT to cover products and technology designed to promote access to Internet.

The latest figures of the International Telecommunication Union indicate that the United States and Canada account for upwards of 66 percent of Internet users worldwide, compared to Europe’s 21.9 percent. The rest are distributed throughout Asia (6.3 percent), the Pacific region (3.7 percent), Latin America and the Caribbean (1.0 percent) and Africa (0.6 percent).

Since it went into effect, the AIT has run into other obstacles, such as divergences in classifying information technology products, participants at the Committee meeting acknowledged.

One of the appendixes to the accord fails to include the specific nomenclature of the harmonised system and only contains the description of computer products. That omission gave rise to the divergences over classification between the United States and the European Union (EU), which are currently being settled by the WTO conflict resolution body.

The United States maintains that the UN raised tariffs on computer equipment by changing the classification. A panel is to hand down a verdict on the case within in the next few weeks.