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WTO IT tariff reduction pact to help S. Korean trade: gov't

All Headlines 13:37 December 17, 2015

SEJONG, Dec. 17 (Yonhap) -- The agreement to additionally cut duties on information technology products and machinery will fuel global trade and benefit South Korea, the government said Thursday.

The Ministry of Trade, Industry and Energy said the Information Technology Agreement (ITA) reached in Nairobi late Wednesday will bring down import duties on 201 items starting in July 2016.

"This can boost South Korean exports by US$590 million annually and push up imports by $570 million," the ministry citing a report by the Korea Institute for Industrial Economics and Trade said. It said of the products covered in the latest deal, South Korea enjoys considerable competitiveness in TV tuners, various digital and network cameras, satellite TV receivers, set-top boxes and ultrasound devices used for treatment.

It said the agreement will lower prices for IT products across the board, as well as services, which can stimulate demand, create jobs and contribute to industrywide growth as tariffs come down in stages in the following years.

The ministry pointed out that while 53 countries formally engaged in the talks, the agreement is binding to all World Trade Organization (WTO) members.

It moreover said that the ITA deal is more comprehensive on the matter of tariff cuts than some free trade agreements (FTA) Seoul has reached with trading partners. It said this could lead to more access in these markets.

The WTO has been pushing to remove more barriers on IT trade following the landmark 1996 pact that got rid of tariffs on most semiconductors and mobile communication devices.

Under the pact, duties levied on various audio-video, medical and measuring equipment will all drop by 2023. The agreement also covers IT components and materials, manufacturing machinery, storage devices, digital and TV cameras and printers.

The world trade body said items to benefit from the ITA are worth some $1.3 trillion, or roughly equal to 10 percent of goods traded every year.

Related to the ITA the Korea International Trade Association predicted South Korea exports will get a much needed boost.

"A quarter of the country's exports are IT-related so the pact will have considerable impact," the trade promotion organization claimed.

It said that because tariffs on manufacturing equipment will be reduced, local companies that manufacture various products will be able to lower prices and enhance their competitiveness.

yonngong@yna.co.kr
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