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U.S. and European Union negotiators
agree on IT tariff reductions

Finalized ITA agreement could lead to elimination
of tariffs on numerous IT products by the year 2000

By Elizabeth DeBony

SunWorld
December  1996
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Brussels (12/12/96) -- The European Union and the United States have reached agreement on a series of tariff reductions that will provide the basis for a broad Information Technology Agreement provided other key countries sign up for the accord by March 15, 1997, a spokesman for the European Commission confirmed on December 12.

"Once there is a deal it will be the biggest trade step taken since the end of the Uruguay Round. It will be good for the IT industry and will act as a catalyst for industrial growth. As such it will be good for the whole world economy," Sir Leon Brittan, European Commissioner for External Trade said in a printed statement.

If finalized, the ITA will lead to the elimination of tariffs by 2000 in four stages beginning in July 1997 on a wide range of IT products. The EU has pushed for accelerating tariff reductions for some goods so that tariffs would be eliminated by Jan. 1, 1998, the commission said.

U.S. and EU negotiators reached the accord on the sidelines of the ministerial meeting of the World Trade Organization taking place in Singapore. Although Japan and Canada are also expected to sign on to the agreement, the EU and the U.S. have made it clear that they want other emerging economies in Asia, notably Malaysia, to sign up as well.

The Commission statement warns that if the percentage of products covered by the ITA falls "somewhat short" of 90 percent, participants may revise their offers in line with what other countries have put on the table.

"Judging from the countries that have already expressed support for an ITA, the EU is already confident that by March 15 the 90 percent target is likely to be achieved," the commission said.

The U.S., EU, Japan, and Canada represent approximately 55 percent of global information technology trade, and EU officials suggest that 30 other countries have expressed interest.

--Elizabeth DeBony, IDG News Service, Brussels Bureau


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