Information Technology Agreement Research Articles

The impacts of Timor-Leste’s membership in the WTO:

The paper presents information about the significant impacts of Timor-Leste's membership in the World Trade Organization (WTO) on institutional reforms, trade policy challenges, and the prospects for ASEAN membership. The paper explores the comprehensive institutional reforms required by WTO membership, emphasizing the harmonization of over 300 economic legislations with WTO standards. The paper also acknowledges that Timor-Leste encounters challenges, including opportunities for strengthening the capacity of human resource and further development of a comprehensive trade policy framework. Additionally, trade negotiations with ten WTO member states on market access for goods and services, including the Information Technology Agreement (ITA), were carefully considered as part of Timor-Leste's WTO commitments, with the expectation of smooth implementation upon the country's membership of the WTO. The study also discusses the use of tariff protectionism as a strategy to safeguard sensitive domestic industries in Timor-Leste, while remaining in compliance with WTO rules in the future.

Digital Trade Rules in Preferential Trade Agreements: Is There a WTO Impact?

AbstractFor a long time, the World Trade Organization (WTO) has been seen as the privileged multilateral regime to regulate trade. However, given its slow progress in negotiating new trade rules, countries have increasingly shifted their focus to preferential trade agreements (PTAs) since the early 2000s. Focusing on a timely and increasingly important topic (digital trade), we explore how countries’ interactions in the WTO impact on their approaches in designing rules in PTAs. Using newly collected data on digital trade‐related provisions in almost 350 PTAs signed since 2000, we find that countries’ participation in digital trade‐related initiatives at the WTO spill over to the design of their PTAs. More precisely, we show that countries which actively participate in the discussions of the WTO Work Programme on Electronic Commerce are more likely to negotiate ambitious commitments on digital trade in their PTAs. Furthermore, our analysis indicates that countries which participate in the WTO‐based plurilateral Information Technology Agreement (ITA) are more likely to commit to deeper cooperation in the area of digital trade. More broadly, this article contributes to our understanding of the dynamics of regime complexity and how interaction in the multilateral system spills over to regional and bilateral trade regimes.

Productivity growth in Indian telecommunications equipment industry

This study has analysed whether the high growth rate in telecommunications service sector has a favourable impact on productivity growth rates of the telecommunications equipment industry in India. In this study, the total and partial factor productivity growth rates are measured for the telecommunications equipment industry during 1999-2016. The translog index is used to estimate the total factor productivity (TFP) growth rate of this industry in a five input KLEMS - framework. The period of study is divided into two sub-periods, i.e., 1999-2007 (sub-period I) and 2008-2016 (sub-period II). The annual growth rate of total factor productivity is estimated to be 3.56% in sub-period I and 2.22% in sub-period II. It has been observed that the growth rate of gross value added (GVA) has decelerated between two sub-periods as the industry has become more import-centric due to implementation of the information technology agreement.

Productivity Growth in Indian Telecommunications Equipment Industry

This study has analysed whether the high growth rate in telecommunications service sector has a favourable impact on productivity growth rates of the telecommunications equipment industry in India. In this study, the total and partial factor productivity growth rates are measured for the telecommunications equipment industry during 1999-2016. The translog index is used to estimate the total factor productivity (TFP) growth rate of this industry in a five input KLEMS - framework. The period of study is divided into two sub-periods, i.e., 1999-2007 (sub-period I) and 2008-2016 (sub-period II). The annual growth rate of total factor productivity is estimated to be 3.56% in sub-period I and 2.22% in sub-period II. It has been observed that the growth rate of gross value added (GVA) has decelerated between two sub-periods as the industry has become more import-centric due to implementation of the information technology agreement.

Heliopolitics: The international political economy of solar supply chains

Tariffs imposed by the United States government under Sections 201 and 301 of the Trade Act of 1974 have given rise to a broadly protectionist exercise of energy policy discretion by the executive branch of government. How can such actions be understood within a wider context of geopolitical competition and the international political economy of an emerging global solar industry? This article proposes that a “Solar Trilemma” could be a key concept for understanding the geo- (or helio-) politics of a new era. It analyzes how renewed solar protectionism counteracts against past progress, and opens the way for a return to the counterproductive economic conflicts and “managed trade” of the 1970s and 1980s; for the energy transition as a whole, decarbonization of the energy system could be delayed. Long-run gains in specialization and efficiency will require global supply chains; the historical experience of the WTO Information Technology Agreement suggests a way forward for heliopolitical restabilization, so as to ensure future liberalization and growth in the sector.

WTO 체재 개혁과 한국의 다자통상정책 방향 (Reshaping the Multilateral Trade Policy for Korea)

WTO 체재 개혁과 한국의 다자통상정책 방향 (Reshaping the Multilateral Trade Policy for Korea)

Peeling away the layers: Impacts of durable tariff elimination

We demonstrate that durable MFN tariff elimination affects trade patterns through several layers, and magnitudes of effects are sizable. The WTO Information Technology Agreement's (ITA) unique setting allows us to overcome the challenges associated with identifying effects of non-discriminatory trade policies due to two reasons: (i) ITA constitutes a quasi-natural experiment of several “passive” signatories joining the agreement as an unavoidable part of pursuing a larger policy objective, and (ii) ITA's partial coverage of the IT sector provides a natural control group for identification based on cross-product variation. Our analysis finds novel nonlinear impacts of tariff liberalization: Complete tariff elimination results in large additional trade gains – over and above tariff reductions – especially for intermediate goods. The commitment to durable tariff elimination, through WTO bindings, adds another two layers, boosting both imports and exports more than equivalent unilateral reforms. This commitment spurned development of a downstream IT export sector in “passive” signatories.

Comment on “The Future of East Asia’s Trade: A Call for Better Globalization”

Comment on “The Future of East Asia’s Trade: A Call for Better Globalization”

The impact of plurilateral trade agreements on developing countries – to participate or not to participate?

ABSTRACT In the wake of the impasse in the Doha Development Round of multilateral trade talks, sector-specific plurilateral trade agreements (PTAs) have been gaining traction. However, PTAs mostly appeal to developed countries, with the uptake among developing countries (including least-developed countries) being very limited. This article investigates the factors contributing to such a phenomenon, whether there is indeed merit in developing countries playing a more active role in PTAs and how they might be encouraged to do so. Both qualitative and quantitative analyses were conducted with specific attention being given to the effects, on a selection of developing countries, of participation in four PTAs: the Trade in Services Agreement, the Government Procurement Agreement, the Environmental Goods Agreement and the Information Technology Agreement II. Among the findings was that although, according to the qualitative analysis, policymakers are generally disinterested in the four PTAs because they are not aligned to the countries’ economic interests or they threaten policy space, the quantitative analysis revealed that gains could often be made from more active participation in these agreements. This clearly points to a research gap and highlights the need for more in-depth analysis of the potential of PTAs in the developing world.

O acordo da OMC sobre tecnologia da informação (ITA) e sua expansão (ITA II): multilateralização do regionalismo

Tendo em vista o contexto da relação entre o multilateralismo e o regionalismo, a celebração de acordos plurilaterais no âmbito da Organização Mundial do Comércio, abertos à participação dos membros interessados, oferece uma perspectiva de multilateralização do regionalismo, na qual os benefícios dos consensos parciais podem ser estendidos à esfera multilateral. O ITA (Information Technology Agreement) – Acordo sobre Tecnologia da Informação é citado como exemplo desta possibilidade, e sua expansão, por meio da criação do ITA II, demonstra o fortalecimento desta tendência de multilateralização do regionalismo, embora com características especiais. Assim, o artigo se desenvolve buscando contextualizar e introduzir a temática do regionalismo e do multilateralismo, para em seguida apresentar a teoria da multilateralização do regionalismo e o ITA como uma dessas experiências, e a sua recente expansão como uma retomada da relevância de tal teoria. Diante dos impasses para conclusão da Rodada de Doha, a expansão desses consensos parciais e a continuidade das negociações na Organização Mundial do Comércio por meio da celebração de acordos plurilaterais setoriais tem se apresentado como uma possível saída, o que demanda uma rearquitetura da interpretação do papel da OMC na governança econômica global.

The Information Technology Agreement and the ‘Make-in-India’ Initiative

The World Trade Organization’s Information Technology Agreement (ITA), which was concluded at the Singapore Ministerial Conference in 1996, is considered to be one of the biggest tariff-cutting deals by virtue of eliminating all customs-related duties on the exportation of certain categories of information technology products to a country, which is a member to the Agreement. Over time, new innovations in the information and communication technology (ICT) sector mandated the consideration of expanding the list of products covered by this Agreement, which took place in the form of ITA-II negotiations. India, which was an original member of the ITA-I, however, decided to opt-out of the negotiations to expand the list of products covered by the Agreement, and reasoned its absence by stating that the zero-tariff regime created by the ITA-I debilitated its electronics-manufacturing sectors and on the contrary resulted in an over-reliance on imported electronic inputs. Accordingly, providing duty-free treatment to a further list of IT products could potentially be detrimental for the country’s economic growth. Consequently, it preferred to give priority to its national policy initiative, namely the ‘Make-in-India’ programme, which embarks upon fostering domestic production of, inter alia, the ICT sector. This article accordingly weighs the better alternative for India and analyses the prospects of initiatives like the current one to resuscitate the ailing domestic electronics-manufacturing sector, before it can benefit from the zero-tariff regime over the expanding list of products covered by the ITA-II. JEL: K33, M15

Peeling Away the Layers: Impacts of Durable Tariff Elimination

We demonstrate that durable MFN tariff elimination affects trade patterns through several layers, which generates non-linear impacts. First, complete tariff elimination results in a large additional trade gains over and above tariff reductions. Second, commitment to durable tariff elimination, through WTO bindings, further boosts both imports and exports of ITA members. The unique setting of the WTO Information Technology Agreement (ITA) allows us to identify these effects of non-discriminatory trade policies because (i) ITA constitutes a quasi-natural experiment as several “passive” signatories joined it as an unavoidable part of pursuing of a larger policy objective, and (ii) ITA's partial coverage of the IT sector provides a natural control group for cross-product identification. Commitments under the ITA spurned development of a downstream IT export sector in “passive” signatories.

The Most Feasible Way Towards a Multilateral Investment Treaty

What is the most feasible way towards a Multilateral Investment Treaty? In order to address this question, this article examines from a comparative perspective examples of multilateral treaties which followed two different treaty-making models: a successful Critical Mass Agreement (CMA) (the Information Technology Agreement (ITA) concluded at the Singapore Ministerial Conference in 1996) and a Plurilateral Agreement (PA) (the Agreement on Government Procurement (GPA) set out in Annex 4 to the World Trade Organisation (WTO) Agreement). It then considers the lessons to be learnt from the draft Multilateral Agreement on Investment (MAI) proposed by the Organization for Economic Cooperation and Development (OECD), an example of a multilateral agreement on investment that did not materialise. Drawing on the experiences and outcomes of the ITA, GPA and MAI-OECD, this article concludes that a Plurilateral Agreement on Investment (PAI) is the most feasible way towards a Multilateral Investment Treaty.

Peeling Away the Layers: Impacts of Durable Tariff Elimination

We demonstrate that durable MFN tariff elimination affects trade patterns through several layers, and magnitudes of effects are sizable. The WTO Information Technology Agreement’s (ITA) unique setting allows us to overcome the challenges associated with identifying effects of non-discriminatory trade policies due to two reasons: (i) ITA constitutes a quasi-natural experiment of several “passive” signatories joining the agreement as an unavoidable part of pursuing a larger policy objective, and (ii) ITA’s partial coverage of the IT sector provides a natural control group for identification based on cross-product variation. Our analysis finds novel nonlinear impacts of tariff liberalization: Complete tariff elimination results in large additional trade gains - over and above tariff reductions - especially for intermediate goods. The commitment to durable tariff elimination, through WTO bindings, adds a further two layers, boosting both imports and exports more than equivalent unilateral reforms. This commitment spurned development of a downstream IT export sector in “passive” signatories.

Peeling Away the Layers: Impacts of Durable Tariff Elimination

We demonstrate that durable MFN tariff elimination affects trade patterns through several layers, and magnitudes of effects are sizable. The WTO Information Technology Agreement’s (ITA) unique setting allows us to overcome the challenges associated with identifying effects of non-discriminatory trade policies due to two reasons: (i) ITA constitutes a quasi-natural experiment of several “passive” signatories joining the agreement as an unavoidable part of pursuing a larger policy objective, and (ii) ITA’s partial coverage of the IT sector provides a natural control group for identification based on cross-product variation. Our analysis finds novel nonlinear impacts of tariff liberalization: Complete tariff elimination results in large additional trade gains - over and above tariff reductions - especially for intermediate goods. The commitment to durable tariff elimination, through WTO bindings, adds a further two layers, boosting both imports and exports more than equivalent unilateral reforms. This commitment spurned development of a downstream IT export sector in “passive” signatories.

Patent-based Disputes in the US Import Trade with China: With Special References to the Parallel Development of MIC 2025 & AMP 2.0 and ITA2

The current scale of the import trade of the US with China is significant and has the potential to be more in near future. However, patent-based disputes, especially in terms of Section 337 investigation, have also been increased in recent years. In the context of parallel development of national innovation strategies of China’s “Made in China 2025 Plan” and the American “Advanced Manufacturing Partnership,” along with the latest expanded “Information Technology Agreement” in the WTO trading system, the implications for optimally resolving patent-based disputes in the US import trade with China is highly significant for two countries. These disputes may even impact the world trade, since bilateral trade between China and the US accounts for a considerable proportion. Thus, both China and the US should take precautions and appropriate measures to guard against such potential frictions in order to attain mutually beneficial outcomes in resolving such disputes.

Critical Mass Agreements: The Proven Template for Trade Liberalization in the WTO

AbstractThe expansion of the Information Technology Agreement (ITA) in 2015 was the most successful attempt at trade liberalization under the auspices of the WTO since its inception in 1995. Its success makes it a template for other trade liberalization efforts. In this article, I explain how the ITA expansion came to pass and explicate the contours of the template it provides. I highlight four factors that were crucial to the ITA expansion's successful completion: a narrower scope without a single undertaking approach, a negotiating group that contained many but not all WTO members, a focus on tariffs rather than non-tariff barriers, and avoiding a nationalistic opposition. I conclude by discussing what lessons these factors and the ITA expansion suggest for other ongoing trade negotiations such as the Environmental Goods Agreements (EGA).

China's Bold Strategy for Semiconductors Zero-Sum Game or Catalyst for Cooperation?

This paper explores whether China's bold strategy for semiconductors will give rise to a zero-sum game or whether it will enhance cooperation that will benefit from increased innovation in China.As the world's largest producer and exporter of electronic products, China is by far the top market for integrated circuits (ICs), accounting for nearly a third of global demand. Yet its ability to design and produce this critical input remains seriously constrained. Despite decades and many billions of dollars of state-led investment, China's domestic production of semiconductors covers less than 13% of the country's demand. As a result, China's IC trade deficit has more than doubled since 2005, and now has surpassed crude oil to become China's biggest import item. To correct this unsustainable imbalance, China seeks to move from catching up to forging ahead in semiconductors through progressive import substitution. The National Semiconductor Industry Development Guidelines (Guidelines) and the Made in China 2025 (MIC 2025) plan were published by China's State Council in June 2014 and May 2015, respectively. Both plans are backed by huge investments and a range of support policies covering intellectual property, cybersecurity, procurement, standards, rules of competition (through the Anti-Monopoly Law), and the negotiation of trade agreements, like the Information Technology Agreement. The objective is to strengthen simultaneously advanced manufacturing, product development and innovation capabilities in China's semiconductor industry as well as in strategic industries that are heavy consumers of semiconductors. Until recently, China has focused primarily on logic semiconductors and mixed-signal integrated circuits for mobile communication equipment (including smart phones), and on the assembly, testing and packaging of chips. Since the start of the 13th FYP, China's semiconductor industry strategy now covers a much broader range of products and value chain stages, while at the same time increasing the depth and sophistication of its industrial upgrading efforts. This important new development is at the center of this paper. Based on a review of policy documents and interviews with China-based industry experts, I will describe key policy initiatives and stakeholders involved in the current strategy; highlight important recent adjustments in the strategy to broaden China's semiconductor product mix; and assess the potential for success of China's ambitious efforts to diversify into memory semiconductors, analog semiconductors, and new semiconductor materials (compound semiconductors). The chances for success are real, giving rise to widespread worries in the US and across Asia that China's bold strategy for semiconductors may result in a zero-sum game with disruptive effects on markets and value chains. However, Chinese semiconductor firms still have a long way to go to catch up with global industry leaders. Hence, global cooperation to integrate China into the semiconductor value chain makes more sense than ever, both for the incumbents and for China.

The Information Technology Agreement, Manufacturing and Innovation China's and India's Contrasting Experiences

The Information Technology Agreement (ITA), a plurilateral trade agreement, seeks to accelerate and deepen the reduction of trade barriers for the critically important Information and Communication Technology (ICT) industry. ITA thus provides an interesting case study of how tariff reduction within an industry-specific trade agreement might affect gains from trade for manufacturing and innovation. From a global welfare perspective, trade expansion could reinforce the diffusion of innovation. Developing countries and especially emerging economies could thus reap significant gains for industrial manufacturing and innovation. But whether this really happens is an empirical question. This chapter compares the contrasting experiences of China and India throughout the history of ITA, from the conclusion of the original ITA-1 agreement in 1996 up to the extended ITA-2 agreement on December 16, 2015. India joined ITA early from a position of weakness in electronics manufacturing. This gap in technological development explains why tariff reductions increased IT imports but failed to stimulate domestic electronic manufacturing and innovation. By contrast, China joined ITA six years after India from a position of strength as the global export factory in electronics manufacturing. Through a continuous upgrading of its industry, China was able to reap the gains from trade. Two specific questions are addressed: First, why is it that China’s electronics industry has benefited substantially from ITA, while in India the gains from trade liberalization have been overshadowed by major costs that are eroding domestic electronic manufacturing and innovation? And, second, to what degree are domestic economic structures and global network integration useful to explain these different experiences and the very different approaches of India and China to the ITA-2 negotiations about expanding the product lists covered by this agreement? The analysis focuses on the role played by differences in the stage of development of their ICT industry, but also more generally in their growth models and regulations, and their resources and capabilities. In addition, differences are considered in the integration of both countries into the global corporate networks of production (GPNs) and global innovation networks (GINs) of the ICT industry. By inserting these domestic determinants into the analysis of trade and innovation, new insights are expected for the study of trade and innovation within plurilateral and megaregional trade agreements. The chapter concludes with suggestions for policy and further research.

Impact of Economic Liberalization on Technical Efficiency of Firms: Evidence from India’s Electronics Industry

The purpose of the paper is to analyze the impact of economic liberalization on technical progress and technical efficiency of electronics hardware manufacturing firms in India. In this study, Translog stochastic frontier production function is estimated in order to measure technical progress and technical efficiency of firms in an era of economic liberalization. The results indicate that electronics hardware manufacturing firms in India have experienced a significant improvement in technical progress during 2002-2010 but the average level of technical efficiency of firms has declined during the same period. The study therefore, concludes that a number of firms have failed to appropriate the benefits of technical progress in India’s electronics industry. It has also been observed that implementation of the Information Technology Agreement (ITA) of World Trade Organization (WTO) does not have any significant impact on technical efficiency of firms operating in the electronics industry.