Role wto-it-diffusion

1. A PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF
(MASTERS IN INFORMATION MANAGEMENT)
UNDER THE ABLE GUIDANCE OF
PROF. RAHUL MEHTA
Presented by
Manish Tripathi ( I – 15-18-19)
Thakur Institute of Management Studies
&
Research
(Sunday 2 December, 2017) 1
THE ROLE OF THE WORLD TRADE ORGANIZATION IN THE
DIFFUSION OF INFORMATION TECHNOLOGY

2. OBJECTIVES
The study investigates the role of the World Trade
Organization (WTO) in the dissemination of Information
Technology with the special emphasis on:
• To study the initiatives undertaken by WTO to bring
down the trade barriers related to Information
Technology products
• To undertake the SWOT analysis of ITA 2.0
• To study the effectiveness and the results derived by
the efforts of WTO in bringing down the import duties
on IT products
• To devise strategies for WTO and other international
organizations to expedite diffuse of IT
2

3. RESEARCH BENEFITS
The study in general contributes extensively to
promote IT worldwide and its accelerated global
adaptation. The research contributions to various
sections are:
• For WTO
• For LDCs
• For IT companies
• For governments
• For UN
3

4. 4
EFFECTS OF DIFFUSION OF IT ON BUSINESS AND SOCIETY

5. 5 REASONS FOR ACCELERATED BUSINESS GROWTH
USING IT
• IT helps businesses solve complex problems
• IT allows businesses to make better and faster
decisions
• IT augments businesses marketing capabilities
• IT adaptation results in improved customer
support
• IT supports superior resource management
5

6. WTO IMPACT
WTO functioning has strong impact on the global trade
and business. WTO can have affirmative impact on:
• Cut living costs and raise living standards
• Settle disputes and reduce trade tensions
• Stimulate economic growth and employment
generation
• Cut the cost of doing business globally
• Encourage good fiscal governance
• Help countries develop using trade as a growth tool
• Give the weak economies like LDCs a stronger voice
• Support the environment and health by encouraging
sustainable business practices
• Contribute to peace and stability across the globe
6

7. 7
Time line of ITA and ITA expansion

8. The Information Technology Agreement (ITA) was
concluded by 29 participants at the Singapore
Ministerial Conference in December 1996 and came
in force from 1 July 1997. Since then, the number of
participants has grown to 82, representing about 97
per cent of world trade in IT products. The
participants are committed to completely eliminating
tariffs on IT products covered by the Agreement.
8

9. 9
ITA product categories

10. IMPLEMENTATION OF THE ITA ON MFN BASIS
In order to implement their ITA commitments,
participants are required to follow two procedures:
1. At the national level: Participants have to undertake
domestic procedures that are necessary to reflect the
tariff reductions negotiated in their national tariff
schedule. ITA concessions and schedule are ratified by the
respect national parliaments.
2. At the WTO level: Participants have to modify their
WTO schedules of concessions in order to incorporate the
new tariff concessions
• Implemented on most-favoured nation, or MFN (i.e.
the principle of not discriminating between one’s
trading partners) principle
10

11. TYPES OF ITA SIGNATORIES
A number of other economies with diverse trade and
economic profiles joined the ITA after 1997. Among
these "late signatories", two distinguished groups can
be identified:
• Passive Signatories: Those who decided to join as
part of a broader policy objective, mainly
developing and emerging economies
• Active Signatories: Those who had a different
motivation (including ITA founding members).
11

12. PERFORMANCE AND RESULT REVIEW OF ITA
• Initially signed by 29 members, the ITA saw the number of its
participants rise quickly. Today the ITA includes 82 WTO members and
covers 97 per cent of world trade in IT products.
• Over the past 20 years, world ITA exports have more than tripled in
value and now represent 15 per cent of total merchandise exports,
exceeding the shares of automotive products, textiles and clothing, and
pharmaceuticals.
• In 20 years of operation, the ITA has deepened developing economies'
integration into global manufacturing networks. A remarkable change
in ITA trade has been the emergence of Asian economies, particularly
China. In 2015, seven of the top ten ITA exporters were Asian.
• Participation in the ITA boosted developing economies' exports of ITA
products to the world. Developing economies' share of ITA exports
increased from 26% in 1996 to 63% in 2015. In the same period, their
share in total world exports only grew from 27% to 43%.
• The “zero-in zero-out” tariffs under the ITA eliminated costly
administrative burdens at customs and reduced delays for goods
crossing borders, facilitating trade in ITA products.
12

13. 13
ITA SIGNATORIES MARKET SHIFT

14. 14
Leading exporters of ITA products: shares in world exports of ITA
products

15. 15
Leading importers of ITA products: shares in world imports of ITA
products

16. • On 1 June 2012, six ITA participants – Costa Rica, the
European Union, Japan, the Republic of Korea, Chinese
Taipei and the United States – officially launched the
ITA expansion negotiations.
• On 24 July 2015, Participants to the expansion
negotiations reached an agreement on a list of 201
additional products that will benefit from duty‐free
treatment.
• The ITA expansion requires its participants to bind and
reduce tariffs to zero over a transitional period starting
on 1 July 2016 and concluding on 1 July 2019.
• Complete remove tariffs on 201 information and
communications technology (ICT) products by 2024. 16

17. 17
ITA expansion products categories

18. 18
Level of base duty and duty-free tariff lines across the
implementation years of the ITA expansion

19. 19
Average applied MFN tariffs of ITA members that are not
participants to the ITA expansion

20. PERFORMANCE AND RESULT REVIEW OF ITA 2.0
• The benefits of ITA-2 are also big for the United States, a global IT
leader. US exports of the 201 products in 2014 were approximately
$150 billion, and this figure will grow with tariff liberalization.
According to USTR, ITA-2 could support an additional 60,000 jobs in US
manufacturing and technology industries. At the same time, lower
costs will benefit US consumers.
• The value of ITA expansion exports was estimated at US$ 1.28 trillion in
2015, accounting for approximately 10 per cent of world trade in
goods. The value of ITA expansion exports is higher than that of
agricultural products and other non-agricultural products – such as
automotive products, textiles, and clothing – and only slightly less than
exports of chemicals.
• In 2015, ITA expansion participants accounted for 92.3 per cent of
world exports of ITA expansion products, and 7.7 per cent was covered
by non-ITA expansion participants.
20

21. 21
Top 10 exporters of ITA expansion products (participants/non-
participants) (percentage share in world exports)

22. 22
Map of ITA participants

23. NON-TARIFF BARRIERS TO ITA
• Changes in HS nomenclature
• Administrative regulations
• Technical regulations
one global product, one global standard, one global test,
one global certificate
23

24. APEC-TEL MRA
The APEC-TEL Mutual Recognition Arrangement (MRA) is a
multilateral arrangement between economies in the APEC
region. The APEC TEL MRA for Conformity Assessment of
Telecommunications Equipment, which came into effect on
1 July 1999, facilitates the recognition of each other’s
conformity assessment results.
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25. 25

26. 26

27. 27
Effect of diffusion of IT on UN’s SDGs

28. 28
INTERNAL
STRENGTH WEAKNESS
1. Most members of WTO are members of ITA expansion
2. Facilitated by WTO an reputed intergovernmental
organization
3. ITA schedules are approved by the respected government
parliaments so highly sustainable rules and higher compliance
4. Backed by 21 years of continual operation of ITA 1.0
5. ITA 1.0 Results already cognized by the international
community
1. Many existing members of WTO are not members of ITA 2.0
2. Few large economies are not even members of WTO
3. The full product category of ITA 2.0 is not fully included in
Harmonized system which hampers trade and analytics
4. Most LDCs are not part of ITA 2.0
5. Non-tariff barriers pose a challenge to implementation, compliance
and analytics
6. Raw materials used in production of ICT products are not included
in ITA 2.0 concession list
EXTERNAL
OPPORTUNITIES THREATS
1. Discussions are going on to include more WTO
members into ITA 2.0
2. Few non-WTO members are in process of WTO
membership
3. With advent of new types of IT products under
constant development, the ITA 2.0 product list will
grow
4. To adopt the established procedures like APEC-TEL
MRA to quickly eliminate NTBs
5. Possibility of creating International Digital Economy
Agreement (IDEA) by augmenting the ITA 2.0
through full coverage on trade in goods; including
non-tariff barriers (NTBs) and trade in
telecommunication and computer and related
services in all modes of delivery
1. IT Services are not included
2. Some countries are more focused on strengthening their
free trade blocks
3. With high rate of innovation, some IT products included in
ITA 2.0 may become obsolete
4. War and terrorism in few regions across the world and
hampering international business
5. Failure of ITA may result in proliferation of bilateral trade
agreements between partner economies.
6. Proliferation of FTAs
SWOT Analysis

29. 29
Conceptual Analytic Framework of effect of IT on economic growth
and effect on government revenue

30. 30
International Organizations interrelated for diffusion of IT

31. 31
Strategies for further diffusion of IT

32. 32