In December 2015, over 50 WTO members, including Canada, gathered at the Nairobi Ministerial Conference, and agreed to the expansion of the Information Technology Agreement (ITA), a WTO agreement that aims to eliminate tariffs on IT products. The ITA was originally concluded by 29 participants in 1996. It now has over 82 participants, representing around 97 per cent of world trade in IT products.
On July 1, 2016, the expanded ITA finally came into effect, eliminating tariffs on 201 tech and information–related products valued at over $1.3 trillion per year. An expansion of the agreement was necessary given recent technological innovations. The products affected by this expansion include certain parts of smartphones such as touchscreens, as well as MRI machines and video–game consoles.
Canada has implemented the expanded ITA and eliminated tariffs on 52 products in its Order Amending the Schedule to the Customs Tariffs (Information Technology Agreement Expansion, 2016), SOR/2016-197. While some tariff eliminations are taking effect as of July 1, 2016, others will take effect over the next 3 years. It should be noted that many of the products covered by the expanded ITA were already tariff–free under Canadian law.
The implementation of the expanded ITA will not only benefit Canadian importers. The Minister of International Trade has stated that this tariff elimination will allow Canadians easier access to the latest technology, and make Canadian exports more attractive in foreign markets. Many of Canada’s exports will be positively affected, including flight simulators, audiovisual products and parts, advanced semiconductors, telecommunications products, software, media storage devices, radar apparatus, medical devices and navigational equipment. According to Global Affairs Canada’s press release, Canada’s annual global exports of the products covered by the expanded ITA amount to approximately $17.8 billion.
Other gains from the Nairobi Ministerial Conference included increased support expressed by members for advancing WTO work on e–commerce. Members agreed to continue to work under the WTO’s existing Work Programme on Electronic Commerce. They also affirmed that members will maintain the current practice of not imposing customs duties on electronic transmissions and will further discuss at their next session, held in 2017.
By: Linda El–Halabi, McCarthy Tétrault LLP
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