We think of APEC, the Asia Pacific Economic Cooperation forum, as the nursery where the concept of free trade in information technology products developed into the Information Technology Agreement or ITA.  And at the WTO ministerial meeting in Singapore in December 1996, the ITA became "the first and most significant tariff liberalization arrangement negotiated in the WTO after its establishment in 1995."

In June 2012, 33 WTO member began a negotiation to up-date and expand the product coverage.  It wasn't easy, but a new agreement was reached last Friday.  That's the landmark deal that Roberto Azevêdo, the Director-General of the WTO, was praising in his statement that afternoon  And that statement is the source of today's featured quote.  In it, Mr. Azevêdo also took note of the scope of the ITA.  He said:

 
"Annual trade in these 201 products is valued at over $1.3 trillion per year, and accounts for approximately 7 percent of total global trade today.  This is larger than the global trade in automotive products - or trade in textiles, clothing, iron and steel combined."

This new ITA list is a rich one and includes, among other things, new-generation semiconductors, GPS navigation systems, and magnetic resonance imaging machines.

 
The 90 Percent Threshold.  The 54 countries who negotiated the new agreement represent just over one-third of the WTO membership of 161, but they account for more than 90 percent of global trade in the relevant products.  That 90 percent figure is critical, as it is the percentage that needs to be met before the agreement can go into effect.

In fact, at least in terms of the 90 percent test, they weren't quite there on the 24th of July but four days later, when Thailand and Taiwan confirmed their acceptance of the deal, they were.  

John Neuffer, the president and CEO of the Semiconductor Industry Association, talked about Thailand's commitment in his blog post on July 28.  "The good news keeps rolling in with Thailand now joining the larger group," he wrote.  He continued:

 
"It is somehow fitting for Thailand to be the country to bring 'critical mass' to ITA expansion. Over the course of the past three years, probably no party to the negotiations has come farther in terms of raising its level of ambition than Thailand. When the Thais joined the negotiations, they had identified hundreds of product lines on the table as 'sensitive.' (Sensitive products are ones that require tariff elimination over a longer period of time, largely to buffer domestic industry from potential shocks when a tariff wall is taken down.) Over the course of the negotiations, the Thai government whittled is sensitivities list down to only a few dozen items. Thailand's constant moves towards greater ambition had a palpable and positive impact on the course of the negotiations."

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We would make three additional points.  First, there is still a lot of work to be done.  The goal is free trade in all of the relevant products.  The agreement is to get there in three stages, with the first tariff cuts kicking in around this time next year.

Second, when those tariffs do come down, they will come down on an MFN basis.  In other words, all WTO members will benefit from improved access to the markets of the liberalizing countries, not just the ITA participants.

Third and finally, big results don't happen without champions - very dedicated people working very hard for very specific results.  We suspect that there were not one but many such people in all of the ITA participating countries.   We don't know them and can't name them.  We do know that Roberto Azevêdo at the WTO was one of them; that it was the EU's Ambassador to the WTO, Angelos Pangratis, who got the deal done; and that America's WTO Ambassador, Michael Punke, and his colleagues at USTR more than exemplified that invaluable Dickensian trait of indefatigable assiduity on behalf of the ITA. 

But, in the end, it is companies that do the trading, and in the U.S. private sector the ITA champion who stands out is John Neuffer of the Semiconductor Industry Association.  Congratulations to all!