Tariffs on technology products representing 10% of world trade – around $US1.3 trillion a year, will be phased out over the coming years, after an agreement was reached at the World Trade Organisation conference in Nairobi.
According to the Department of Foreign Affairs and Trade, Australia imports more than $21 billion worth of such tech products, and exports over $4.2 billion.
Among the 201 products covered by the agreement are GPS navigation systems, semi-conductors, medical equipment, satellites and touch screens. Some of these products saw tariffs as high as 35%, while the global average for most products is just 9%.
Under the agreement, tariffs will be reduced to zero. 65% will be eliminated by 1 July 2016, with the rest phased out in four stages by 2019.
The trade in items covered by the agreement compose a larger share of global trade than textiles, clothing, iron and steel combined.
“Eliminating tariffs on these goods in Australia and globally will benefit Australian consumers through lower end prices. Upstream technology industries such as software design, as well as downstream industries such as IT service providers will also benefit from cost reductions” says a statement on the DFAT website.
The WTO agreement expands the 1996 Information Technology Agreement, originally conducted by 29 countries including Australia. 81 countries were part of the latest agreement, although all members of the WTO will benefit.
“All WTO members will benefit under the most-favoured nation principle. This means that all members can export these 201 products duty-free to each of these markets. And of course they will also feel the knock-on benefits for other sectors. Moreover, the agreement is open to all WTO members to join,” said Roberto Azevêdo, Director-General of the WTO.
Business Insider Emails & Alerts
Site highlights each day to your inbox.