Trade negotiators tentatively agreed on Saturday to eliminate tariffs on an array of technology products valued at $1 trillion worth of global commerce.
The breakthrough toward the World Trade Organization’s Information Technology Agreement took place at an ambassadors’ meeting at the European Union embassy in Geneva.
“Very optimistic that we’ll have a final successful deal by the end of next week,” Roberto Azevedo, director-general of the WTO, said on Twitter. “We have the basis for an agreement.”
The U.S. Trade Representative’s office hailed a “major breakthrough” in what would be the first significant tariff-cutting deal at the WTO in 18 years.
“This will open overseas markets for some of America’s most competitive companies and workers,” USTR Michael Froman said in an e-mailed statement. “We are confident that all parties will now give formal approval to their participation in what would be the first tariff-elimination deal at the WTO in 18 years.”
In talks that started on July 14, members took on the question of various tariffs, notably on LCD screens, which were contested by Taiwan and China, and an EU request concerning car radios. South Korean negotiators withdrew their opposition to an extended agreement, and members agreed to consider a draft list of covered products.
Tariffs on semiconductors, magnetic resonance imaging machines, global positioning system devices, printer ink cartridges, video game consoles and other products would be cut to zero under the deal, according to the USTR office.
The expanded product list will now undergo consideration from trade ministers at their various capitals.
“We have the basis for an understanding,” Azevedo told Bloomberg BNA in Geneva after the meeting. “The list is out, members are going to consult their capitals, and we will know by Friday whether we have final approval on the list of products and the declaration itself.”
The product list could pave the way for a finalized deal that would contribute as much as $190 billion to the global gross domestic product and support 60,000 U.S. jobs.
Technology manufacturers like Intel Corp., Samsung Electronics Co., Sandisk Corp. and Texas Instruments Inc. stand to benefit from the elimination of tariffs on some 250 products.
The 80 WTO countries that participate in the ITA talks account for about 97 percent of global trade in IT products.
The ITA requires participants to eliminate import tariffs on technology products on a most-favored-nation basis, meaning that any duty-free terms are applied to all WTO members.
In September, ITA negotiators will start talks on schedules of concessions for tariff reductions, also known as staging. That allows countries to gradually phase in the tariff reductions for certain products deemed too sensitive for the ITA’s various signatories.
Negotiators will also hold technical negotiations with the goal of completing the agreement by the WTO Ministerial Conference scheduled for Dec. 15-18 in Nairobi, Kenya.
U.S. technology industry officials are hopeful the deal could enter into force as soon as July 2016.