The ITA is a WTO initiative that was originally came in to force in 1997 reducing the duty rate on over many ICT products and components to 0%.
A recent meeting between the US and China paves the way for a swift conclusion to a new expanded version of the ITA and will represent the first major tariff cutting agreement coming out to the WTO in 17 years. More than 200 tariff lines will be reduced to zero, including:
- Next generation semiconductors;
- Magnetic Resonance Imaging (MRI) machines;
- Computed Tomography (CT) scanners;
- Global Positioning System (GPS) devices;
- Printed matter/cards to download software and games;
- Printer ink cartridges;
- Static converters and inductors;
- Software media, such as solid state drives;
- Video game consoles;
- An expanded ITA would also eliminate import duties on a range of additional technology products including high-tech medical devices, video cameras, and an array of high-tech ICT testing instruments
The EU has recently lost a number of WTO disputes on its restrictive interpretation of the existing ITA and it will be interesting to see if the new Agreement gives rise to further classification disputes or WTO actions.
We recommend companies benefiting under the ITA obtain legal classification rulings (known as Binding Tariff Information (BTI)) on any key products. This should provide certainty of treatment and protection from retrospective challenges when subject to regulatory audit.