More tariff-free ICT products Philippines sees huge benefits from new WTO deal

MANILA, Philippines – The Philippines is poised to benefit substantially from a tariff free trade of information and communication (ICT) products following a landmark expansion of the Information Technology Agreement (ITA).

A group of 53 WTO members, including the Philippines, finalized the agreement to expand the product coverage of the ITA last Dec. 17 during the 10th WTO Ministerial Conference in Nairobi, Kenya.

The Department of Trade and Industry (DTI) said the agreement now covers the elimination of tariffs for new generation semi-conductors, global positioning system (GPS) navigation equipment, and medical equipment such as magnetic resonance imaging products and ultra-sonic scanning apparatus. 

Trade Secretary Gregory Domingo said the ITA expansion represents a huge step forward for innovation and economic growth globally.

“It will deliver huge benefits to the Philippines in terms of improved productivity and market access, particularly for the electronics and semiconductor industry. The agreement makes our country more attractive to potential foreign direct investments particularly from key ICT players such as US, Japan, and EU,” Domingo said.

The 201 products covered by the expanded ITA have  annual trade worth over $1.3 trillion, and currently account for about 10 percent of total global trade.

Under the terms of the agreement, the DTI said the 53 WTO member-participants agreed to reduce tariffs on covered goods beginning July 1 next year, with around 65 percent of these tariff lines eliminated by end of 2016.

By 2019, 89 percent of tariff lines will be eliminated while zero tariffs on all products will be achieved by 2022.

“In the Philippines, this means that substantial gains will redound to other sectors that use IT products as inputs, such as technology start-ups, manufacturing companies and the business processing and outsourcing industry. The lower prices will improve access to technology that will facilitate education and accelerate innovation,” Trade Undersecretary Adrian Cristobal said. 

According to the DTI, the Philippines is currently the 14th largest exporter of ICT products in the world.

Philippine ICT exports are valued at approximately $14 billion, accounting for more than 20 percent of total export of goods.

“The deal was hard fought, as it took over three years of intense negotiations, but the Philippines’ ITA team worked hard because it is a critical agreement for our country. The team ensured that we avail of flexibilities of extended staging of tariff reductions. The next step is to work with our industries to take advantage of the expanded ITA,” Cristobal said.

The Philippines became a signatory of the original ITA in 1997 together with 81 WTO members.