RECOMMENDATION on the draft Council decision on the conclusion, on behalf of the European Union, of an agreement in the form of the Declaration on the Expansion of Trade in Information Technology Products (ITA)

26.5.2016 - (06925/2016 – C8‑0141/2016 – 2016/0067(NLE)) - ***

Committee on International Trade
Rapporteur: Godelieve Quisthoudt-Rowohl

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the draft Council decision on the conclusion, on behalf of the European Union, of an agreement in the form of the Declaration on the Expansion of Trade in Information Technology Products (ITA)

(06925/2016 – C8‑0141/2016 – 2016/0067(NLE))

(Consent)

The European Parliament,

–  having regard to the draft Council decision (06925/2016),

–  having regard to the WTO Ministerial declaration of 16 December 2015, on the expansion of trade in information technology products (06926/2016),

–  having regard to the request for consent submitted by the Council in accordance with first subparagraph of Article 207(4) and Article 218(6), second subparagraph, point (a), point (v) of the Treaty on the Functioning of the European Union (C8‑0141/2016),

–  having regard to Rule 99(1), first and third subparagraphs, Rule 99(2), and Rule 108(7) of its Rules of Procedure,

–  having regard to the recommendation of the Committee on International Trade (A8-0186/2016),

1.  Gives its consent to conclusion of the agreement;

2.  Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and to the World Trade Organization.

SHORT JUSTIFICATION

The first Information Technology Agreement (ITA) was concluded at the Singapore Ministerial Conference in December 1996 and entered into force in 1997. While only 29 WTO Member States initially concluded the agreement, ITA today counts 82 participants.

The ITA requires that each participant eliminates and binds customs duties at zero on a Most Favoured Nation basis for all information technology (IT) products covered. The ITA covers about 200 tariff lines, including computers, telephones, but also inputs, components and machinery for the production of IT goods. The duty free treatment given by the ITA participants has played an important role in the enormous development and expansion of trade that the IT sector has experienced over the close to 20 years of application of the ITA. Trade in the sector has quadrupled. However, during this time span technological progress has changed the IT sector beyond recognition, while the coverage of the ITA remained the same.

In May 2012, six countries launched negotiations to expand the product coverage of the agreement (EU, US, Japan, Korea, Taiwan and Costa Rica). They came to be joined by 21 other members. On 24 July 2015, an agreement was reached on an additional list of 201 IT products. Annual trade in these 201 products is valued at over USD 1.3 trillion per year, and accounts for approximately 10% of total global trade today.

Among the products covered in this agreement are new-generation semi-conductors, GPS navigation systems, medical products which include magnetic resonance imaging machines, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens.

Following this agreement, participants had to present schedules containing the staging commitments for all products, during a phase out period of up to seven years. (3 years for normal staging, 5 years for sensitive products and 7 years in exceptional cases). As a result of these negotiations, approximately 65% of tariff lines will be fully eliminated by 1 July 2016. By 2019 almost all imports of the relevant products will be duty free. 

The agreement in the form of a Declaration on the Expansion of the ITA (and the schedules containing the staging commitments of the participants) was adopted by the Ministers of the participant countries on 16 December 2015 during the 10^th WTO Ministerial Conference in Nairobi.

The EU exports 189 billion EUR in products covered by the ITA expansion, a figure that is expected to increase significantly following tariff cuts. The agreement will lead to lower prices for consumers, but also for producers who depend on imported components. Some sectors will however also experience increased competition. The rapporteur is therefore pleased to see that the EU negotiated longer staging for some products that were considered to be sensitive, while the majority of the non-sensitive tariffs will be eliminated at the entry into force of the agreement.

The expansion of the ITA is a landmark deal, the first major tariff cutting deal since the WTO was created, with a huge potential to create jobs and boost GDP growth and your rapporteur therefore proposes the European Parliament to give its consent to the agreement, but she wants to underline that in order for the EU to be able to fully benefit, it is important to make sure that more members will join the agreement.

RESULT OF FINAL VOTE IN COMMITTEE RESPONSIBLE

Date adopted	24.5.2016
Result of final vote	+: –: 0:	30 3 4
Members present for the final vote	Maria Arena, Tiziana Beghin, Daniel Caspary, Salvatore Cicu, Marielle de Sarnez, Santiago Fisas Ayxelà, Karoline Graswander-Hainz, Ska Keller, Jude Kirton-Darling, Alexander Graf Lambsdorff, Bernd Lange, David Martin, Emmanuel Maurel, Anne-Marie Mineur, Sorin Moisă, Alessia Maria Mosca, Artis Pabriks, Franck Proust, Godelieve Quisthoudt-Rowohl, Inmaculada Rodríguez-Piñero Fernández, Tokia Saïfi, Marietje Schaake, Helmut Scholz, Joachim Schuster, Joachim Starbatty, Adam Szejnfeld, Hannu Takkula, Iuliu Winkler, Jan Zahradil
Substitutes present for the final vote	Reimer Böge, Edouard Ferrand, Sander Loones, Lola Sánchez Caldentey, Judith Sargentini, Jarosław Wałęsa
Substitutes under Rule 200(2) present for the final vote	Dominique Bilde, Georg Mayer