Information Technology Agreement Extends Duty-Free Treatment to Certain Electronic Toys

28 July 2015

A landmark deal was reached between 54 members of the Word Trade Organization (WTO) last week that will extend duty-free treatment to more than 200 information technology products, including certain types of electronic games, toys and other electronic accessories.

The first major tariff-cutting deal at the WTO in 18 years, the recent accord will expand the list of products covered by the Information Technology Agreement (ITA), a trade agreement that requires participants to eliminate their tariffs on specified IT goods. Of significance to the toy industry, duties will be eliminated on children’s portable, electronic learning devices; video games used with a television receiver; video game consoles; and games that are operated by coins, cash, credit cards, tokens and other means of payment, among other items.

Under the terms of the agreement, the majority of tariffs on products being added to the ITA will be eliminated within three years, with reductions beginning in 2016. Compliance schedules are slated to be finalized for implementation this December.

The WTO has committed to address non-tariff barriers in the information technology sector and will continue to review the list of products covered under the ITA to determine whether any further expansion is needed to reflect future technological developments.

The Information Technology Agreement was established in 1996 and currently provides for the duty-free trade of approximately 180 high-tech goods between 81 participating countries. In 2012, members recognized that technological innovation had advanced to such an extent that many new product categories were not addressed by the existing agreement, and negotiations began to expand its coverage.

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