Trade in Information and Communications Technology and its Contribution to Trade and Innovation

Abstract

Information and communications technology (ICT) has been seen as a major contributor to productivity growth and as a key tool for innovation. Trade liberalisation can play a role in encouraging ICT adoption by fostering competition and by reducing ICT prices. While the trade in ICT goods has more than doubled since the mid-1990s, the share of trade involving low and middle income countries has significantly increased, with China now being the largest trader. During the same period, tariff levels have declined thanks in part to the Information Technology Agreement (ITA), although substantial tariffs remain with respect to ICT goods not covered by the ITA and by those imposed by non-participants to the ITA. The multilateral trading system produced early successes in the ITA and the negotiations on basic telecommunications at the World Trade Organization (WTO), but the progress has since been more modest. Yet it provides opportunities to further trade liberalisation in ICT goods, both with respect to tariffs and to non-tariff issues, not least through the Doha negotiations.