Global Industry Urges ITA Negotiators to Show Restraint on Staging

by Semiconductor Industry Association

Following the hard-fought agreement achieved in July on the product list to expand the Information Technology Agreement (ITA), negotiators will return to Geneva next week to sort through implementation timeframes for the 201 high-tech product lines to be covered by ITA expansion. These timeframes are known as “staging,” the periods over which tariffs are eliminated.

In a strong statement released today, more than 80 associations from around the world wrote:

While the standard phase-out (or staging) period for tariff elimination under ITA expansion is three years, we urge the negotiators to show as much ambition as possible and embrace the important provision in the formal July 28 WTO declaration on ITA expansion that encourages “autonomous immediate elimination of customs duties or accelerated implementation…” We trust the negotiating parties will seek to be as faithful as possible to this ambition. Similarly, we urge all negotiating parties to show restraint in seeking staging periods longer than three years, given the short innovation cycles for high-technology products.

While some economies expect and need special staging accommodations for some products included in the ITA, limited requests for extended staging and more quickly lifting the burden of tariffs on economic growth will intensify the myriad benefits of this important agreement.

Of particular importance to SIA is achieving immediate elimination of duties on next-generation semiconductors known as multi-component semiconductors (MCOs). MCOs, like other semiconductors, are the foundational technology for virtually all electronics, including computers, communications devices, consumer electronics, automotive electronics, industrial equipment, and medical devices. They are the key components that drive innovation in downstream sectors, including e-commerce, energy efficiency, finance, mobility, safety, security, health, and Internet-of-Things applications.

ITA parties that eliminate tariffs on MCOs upon entry into force of the expansion agreement will help their tech manufacturers and other business sectors be more competitive. No staging will also help ITA members avoid the complexity and burden caused by the multitude of MCO subheadings with different duty rates under which MCOs are classified today, as well as lack of harmonization and potential compliance disputes.

Next week, SIA will be in Geneva along with other U.S. industry representatives to convey industry priorities and encourage negotiators to deliver an ambitious outcome as possible on staging for the WTO Ministerial Conference in Nairobi in December 2015.