Thailand Gives ITA Expansion “Critical Mass”

by John Neuffer, President and CEO

Yesterday, we learned Taiwan had officially decided to support the product list to expand the scope of the Information Technology Agreement (ITA). Today, the good news keeps rolling in with Thailand now joining the larger group of negotiating parties to the agreement that finalized the list last Friday.

With this, Thailand has delivered the all-important “critical mass” to this trillion-dollar deal to eliminate tariffs on tech products. Importantly, by World Trade Organization (WTO) protocol, countries signing the accord must account for approximately 90 percent of global trade in the tech products covered by the agreement for it to enter into force.

It is somehow fitting for Thailand to be the country to bring “critical mass” to ITA expansion. Over the course of the past three years, probably no party to the negotiations has come farther in terms of raising its level of ambition than Thailand. When the Thais joined the negotiations, they had identified hundreds of product lines on the table as “sensitive.” (Sensitive products are ones that require tariff elimination over a longer period of time, largely to buffer domestic industry from potential shocks when a tariff wall is taken down.) Over the course of the negotiations, the Thai government whittled is sensitivities list down to only a few dozen items. Thailand’s constant moves towards greater ambition had a palpable and positive impact on the course of the negotiations.

Today, WTO’s highest ranking decision-making body, its General Council, wrapped up two days of meetings in Geneva. Before adjourning, however, the ITA agreement was notified to the WTO with Director-General Roberto Azevêdo underscoring its importance to the WTO as an institution and to global trade. The agreement’s declaration, which the product list is attached to, was circulated in a WTO press release today. That declaration spells out the timelines for all the technical work that must be done by the WTO Ministerial Conference in Nairobi in December and sets July 1, 2016 as the date ITA expansion goes into force. Thailand (and Taiwan) are on that charter document, along with the 50 or so other signatories.

Our hope is that over the course of the next weeks and months, other WTO members will follow Taiwan’s and Thailand’s example and embrace the reality that for ITA expansion, better-late-than-never works just fine.