AGREEMENT on trade in information technology products

WORLD TRADE ORGANIZATION

13 December 1996

MINISTERIAL CONFERENCE

Singapore, 9-13 December 1996

MINISTERIAL DECLARATION ON TRADE IN INFORMATION TECHNOLOGY PRODUCTS

Singapore, 13 December 1996

MINISTERS,

REPRESENTING the following Members of the World Trade Organization ('WTO`), and States or separate customs territories in the process of acceding to the WTO, which have agreed in Singapore on the expansion of world trade in information technology products and which account for well over 80 per cent of world trade in these products ('parties`):

Australia

Canada

European Communities

Hong Kong

Iceland

Indonesia

Japan

Korea

Norway

Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu

Singapore

Switzerland (1)

Turkey

United States

CONSIDERING the key role of trade in information technology products in the development of information industries and in the dynamic expansion of the world economy,

RECOGNIZING the goals of raising standards of living and expanding the production of and trade in goods,

DESIRING to achieve maximum freedom of world trade in information technology products,

DESIRING to encourage the continued technological development of the information technology industry on a world-wide basis,

MINDFUL of the positive contribution information technology makes to global economic growth and welfare,

HAVING agreed to put into effect the results of these negotiations which involve concessions additional to those included in the Schedules attached to the Marrakesh Protocol to the General Agreement on Tariffs and Trade 1994, and

RECOGNIZING that the results of these negotiations also involve some concessions offered in negotiations leading to the establishment of Schedules annexed to the Marrakesh Protocol,

DECLARE as follows:

1. Each party's trade regime should evolve in a manner that enhances market access opportunities for information technology products.

2. Pursuant to the modalities set forth in the Annex to this Declaration, each party shall bind and eliminate customs duties and other duties and charges of any kind, within the meaning of Article II:1 (b) of the General Agreement on Tariffs and Trade 1994, with respect to the following:

(a) all products classified (or classifiable) with Harmonized System (1996) ('HS`) headings listed in Attachment A to the Annex to this Declaration, and

(b) all products specified in Attachment B to the Annex to this Declaration, whether or not they are included in Attachment A,

through equal rate reductions of customs duties beginning in 1997 and concluding in 2000, recognizing that extended staging of reductions and, before implementation, expansion of product coverage may be necessary in limited circumstances.

3. Ministers express satisfaction about the large product coverage outlined in the Attachments to the Annex to this Declaration. They instruct their respective officials to make good faith efforts to finalize plurilateral technical discussions in Geneva on the basis of these modalities, and instruct these officials to complete this work by 31 January 1997, so as to ensure the implementation of this Declaration by the largest number of participants.

4. Ministers invite the Ministers of other Members of the WTO, and States or separate customs territories in the process of acceding to the WTO, to provide similar instructions to their respective officials, so that they may participate in the technical discussions referred to in paragraph 3 above and participate fully in the expansion of world trade in information technology products.

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(1) On behalf of the customs union Switzerland and Liechtenstein.

ANNEX

MODALITIES AND PRODUCT COVERAGE

Any Member of the World Trade Organization, or State or separate customs territory in the process of acceding to the WTO, may participate in the expansion of world trade in information technology products in accordance with the following modalities:

1. Each participant shall incorporate the measures described in paragraph 2 of the Declaration into its schedule to the General Agreement on Tariffs and Trade 1994, and, in addition, at either its own tariff line level or the Harmonized System (1996) ('HS`) 6-digit level in either its official tariff or any other published versions of the tariff schedule, whichever is ordinarily used by importers and exporters. Each participant that is not a Member of the WTO shall implement these measures on an autonomous basis, pending completion of its WTO accession, and shall incorporate these measures into its WTO market access schedule for goods.

2. To this end, as early as possible and no later than 1 March 1997 each participant shall provide all other participants a document containing (a) the details concerning how the appropriate duty treatment will be provided in its WTO schedule of concessions, and (b) a list of the detailed HS headings involved for products specified in Attachment B. These documents will be reviewed and approved on a consensus basis and this review process shall be completed no later than 1 April 1997. As soon as this review process has been completed for any such document, that document shall be submitted as a modification to the schedule of the participant concerned, in accordance with the Decision of 26 March 1980 on Procedures for Modification and Rectification of Schedules of Tariff Concessions (BISD 27S/25).

(a) The concessions to be proposed by each participant as modifications to its schedule shall bind and eliminate all customs duties and other duties and charges of any kind on information technology products as follows:

(i) elimination of such customs duties shall take place through rate reductions in equal steps, except as may be otherwise agreed by the participants. Unless otherwise agreed by the participants, each participant shall bind all tariffs on items listed in the Attachments no later than 1 July 1997, and shall make the first such rate reduction effective no later than 1 July 1997, the second such rate reduction no later than 1 January 1998, and the third such rate reduction no later than 1 January 1999, and the elimination of customs duties shall be effective no later than 1 January 2000. The participants agree to encourage autonomous elimination of customs duties prior to these dates. The reduced rate should in each stage be rounded off to the first decimal, and

(ii) elimination of such other duties and charges of any kind, within the meaning of Article II:1 (b) of the General Agreement, shall be completed by 1 July 1997, except as may be otherwise specified in the participant's document provided to other participants for review.

(b) The modifications to its schedule to be proposed by a participant in order to implement its binding and elimination of customs duties on information technology products shall achieve this result:

(i) in the case of the HS headings listed in Attachment A, by creating, where appropriate, subdivisions in its schedule at the national tariff line level, and

(ii) in the case of the products specified in Attachment B, by attaching an annex to its schedule including all products in Attachment B, which is to specify the detailed HS headings for those products at either the national tariff line level or the HS 6-digit level.

Each participant shall promptly modify its national tariff schedule to reflect the modifications it has proposed, as soon as they have entered into effect.

3. Participants shall meet periodically under the auspices of the Council on Trade in Goods to review the product coverage specified in the Attachments, with a view to agreeing by consensus whether, in the light of technological developments, experience in applying the tariff concessions, or changes to the HS nomenclature, the Attachments should be modified to incorporate additional products, and to consult on non-tariff barriers to trade in information technology products. Such consultations shall be without prejudice to rights and obligations under the WTO Agreement.

4. Participants shall meet as soon as practicable and in any case no later than 1 April 1997 to review the state of acceptances received and to assess the conclusions to be drawn therefrom. Participants will implement the actions foreseen in the Declaration provided that participants representing approximately 90 per cent of world trade (1) in information technology products have by then notified their acceptance, and provided that the staging has been agreed to the participants' satisfaction. In assessing whether to implement actions foreseen in the Declaration, if the percentage of world trade represented by participants falls somewhat short of 90 per cent of world trade in information technology products, participants may take into account the extent of the participation of States or separate customs territories representing for them the substantial bulk of their own trade in such products. At this meeting the participants will establish whether these criteria have been met.

5. Participants shall meet as often as necessary and no later than 30 September 1997 to consider any divergence among them in classifying information technology products, beginning with the products specified in Attachment B. Participants agree on the common objective of achieving, where appropriate, a common classification for these products within existing HS nomenclature, giving consideration to interpretations and rulings of the Customs Cooperation Council (also known as the World Customs Organization or 'WCO`). In any instance in which a divergence in classification remains, participants will consider whether a joint suggestion could be made to the WCO with regard to updating existing HS nomenclature or resolving divergence in interpretation of the HS nomenclature.

6. The participants understand that Article XXIII of the General Agreement will address nullification or impairment of benefits accruing directly or indirectly to a WTO Member participant through the implementation of this Declaration as a result of the application by another WTO Member participant of any measure, whether or not that measure conflicts with the provisions of the General Agreement.

7. Each participant shall afford sympathetic consideration to any request for consultation from any other participant concerning the undertakings set out above. Such consultations shall be without prejudice to rights and obligations under the WTO Agreement.

8. Participants acting under the auspices of the Council for Trade in Goods shall inform other Members of the WTO and States or separate customs territories in the process of acceding to the WTO of these modalities and initiate consultations with a view to facilitate their participation in the expansion of trade in information technology products on the basis of the Declaration.

9. As used in these modalities, the term 'participant` shall mean those Members of the WTO, or States or separate customs territories in the process of acceding to the WTO, that provide the document described in paragraph 2 no later than 1 March 1997.

10. This Annex shall be open for acceptance by all Members of the WTO and any State or any separate customs territory in the process of acceding to the WTO. Acceptances shall be notified in writing to the Director-General who shall communicate them to all participants.

There are two Attachments to the Annex.

Attachment A lists the HS headings or parts thereof to be covered.

Attachment B lists specific products to be covered by an ITA wherever they are classified in the HS.

(1) This percentage shall be calculated by the WTO Secretariat on the basis of the most recent data available at the time of the meeting.

Attachment A, Section 1

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Attachment A, Section 2

Semiconductor manufacturing and testing equipment and parts thereof

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Attachment B

Positive list of specific products to be covered by this agreement wherever they are classified in the HS.

Where parts are specified, they are to be covered in accordance with HS Notes 2 (b) to Section XVI and Chapter 90, respectively.

- Computers: automatic data processing machines capable of (1) storing the processing program or programs and at least the data immediately necessary for the execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.

The agreement covers such automatic data processing machines whether or not they are able to receive and process with the assistance of central processing unit telephony signals, television signals, or other analogue or digitally processed audio or video signals. Machines performing a specific function other than data processing, or incorporating or working in conjunction with an automatic data processing machine, and not otherwise specified under Attachment A or B, are not covered by this agreement,

- Electric amplifiers when used as repeaters in line telephony products falling within this agreement, and parts thereof,

- Flat panel displays (including LCD, electro luminescence, plasma and other technologies) for products falling within this agreement, and parts thereof,

- Network equipment: local area network (LAN) and wide area network (WAN) apparatus, including those products dedicated for use solely or principally to permit the interconnection of automatic data processing machines and units thereof for a network that is used primarily for the sharing of resources such as central processor units, data storage devices and input or output - including adapters, hubs, in-line repeaters, converters, concentrators, bridges and routers and printed circuit assemblies for physical incorporation into automatic data processing machines and units thereof,

- Monitors: display units of automatic data processing machines with a cathode ray tube with a dot screen pitch smaller than 0,4 mm not capable of receiving and processing television signals or other analogue or digitally processed audio or video signals without assistance of a central processing unit of a computer as defined in this agreement. The agreement does not, therefore, cover televisions, including high definition televisions (1),

- Optical disc storage units, for automatic data processing machines (including CD drives and DVD-drives), whether or not having the capability of writing/recording as well as reading, whether or not in their own housings,

- Paging alert devices, and parts thereof,

- Plotters whether input or output units of HS heading No 8471 or drawing or drafting machines of HS heading No 9017,

- Printed circuit assemblies for products falling within this agreement, including such assemblies for external connections such as cards that conform to the PCMCIA standard.

Such printed circuit assemblies consist of one or more printed circuits of heading 8534 with one or more active elements assembled thereon, with or without passive elements 'Active elements` means diodes, transistors, and similar semiconductor devices, whether or not photosensitive, of heading 8541, and integrated circuits and micro assemblies of heading 8542,

- Projection type flat panel display units used with automatic data processing machines which can display digital information generated by the central processing unit,

- Proprietary format storage devices including media therefore for automatic data processing machines, with or without removable media and whether magnetic, optical or other technology, including Bernouilli Box, Syquest, or Zipdrive cartridge storage units,

- Multimedia upgrade kits for automatic data processing machines, and units thereof, put up for retail sale, consisting of, at least, speakers and/or microphones as well as a printed circuit assembly that enables the ADP machines and units thereof to process audio signals (sound cards),

- Set top boxes which have a communication function: a microprocessor-based device incorporating a modem for gaining access to the Internet, and having a function of interactive information exchange.

(1) Participants will conduct a review of this product description in January 1999 under the consultation provisions of paragraph 3 of the Declaration.

EC - ITA - Schedule CXL

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EC-ITA - Schedule CXL - Attachment A, Section 2

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EC-ITA - Schedule CXL - Attachment B

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WORLD TRADE ORGANIZATION

2 April 1997

Council for Trade in Goods IMPLEMENTATION OF THE MINISTERIAL DECLARATION ON TRADE IN INFORMATION TECHNOLOGY PRODUCTS

The following communication was sent on 26 March 1997 to the Chairman of the Council for Trade in Goods with a request that it be circulated to all Members.

The following Members of the World Trade Organization ('WTO`) and States or separate customs territories in the process of acceding to the WTO:

Australia

Canada

Czech Republic

Costa Rica

Estonia

European Communities

Hong Kong

Iceland

India

Indonesia

Israel

Japan

Korea

Macau

Malaysia

New Zealand

Norway

Romania

Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu

Singapore

Slovak Republic

Switzerland (1)

Thailand

Turkey

United States

(hereinafter referred to as 'participants`) (2), having been parties to the Ministerial Declaration on Trade in Information Technology Products (3) (hereinafter referred to as 'Declaration`), or having agreed, in the period since the Declaration was circulated, to participate in the expansion of world trade in information technology products according to the modalities set forth in the Declaration, met on 26 March 1997 (4), took the decisions described below, as provided for in the Annex to the Declaration, and established the elements described below, concerning the further implementation of the Declaration, as reflected below.

Agreement on actions foreseen in the Declaration

1. The participants accepted (5) the results of the review process described in paragraph 2 of the Annex to the Declaration, as reflected in the documents attached hereto, which were submitted by participants and have been reviewed and approved on a consensus basis.

2. The participants agreed that the criteria established in paragraph 4 of the Annex to the Declaration have been met, and therefore, that participants shall implement (6) the actions foreseen in the Declaration.

Establishment of the Committee of Participants

3. In order to carry out the provisions of paragraphs 3, 5, 6 and 7 of the Annex to the Declaration, the participants established a Committee of Participants on the Expansion of Trade in Information Technology Products (hereinafter referred to as 'Committee`). The Committee shall oversee the functioning of these elements and shall serve as the forum for meetings required under its procedures and collective consultations among the participants. All decisions of the Committee shall be taken by consensus.

4. Membership in the Committee shall be open to representatives of all participants. The Committee shall elect a chairperson from among the representatives of the participants or as otherwise decided. The Committee may decide to invite, as appropriate, representatives of WTO Members and of observers to the Council for Trade in Goods that are not participants as of 26 March 1997 to attend meetings of the Committee as observers.

5. The participants agreed that any WTO Member, or State or separate customs territory in the process of acceding to the WTO, that is not a participant as of 26 March 1997, and that notifies the Committee of its interest in binding and eliminating customs duties, and other duties and charges, on the importation of information technology products into its territory pursuant to these elements, may become a participant on terms to be agreed between it and the participants at that time. Unless otherwise agreed, such WTO Member, or separate customs territory in the process of acceding to the WTO, shall, on the date that it becomes a participant, make effective all rate reductions it would have undertaken had it been a participant as of 26 March 1997.

6. The participants agreed that the Committee shall hold regular meetings to review developments related to the implementation of the Declaration, and shall hold special meetings at the request of any participant or as otherwise necessary by invitation of the chairperson. The first regular meeting of the Committee shall be held no later than 30 September 1997. The Committee shall consider at that meeting the schedule of future regular meetings, taking account of the meetings provided for in paragraph 7 below.

Process for monitoring implementation and consultations on and review of product coverage

7. The participants agreed that, in conducting the consultations and review described in paragraph 3 of the Annex to the Declaration (7), the Committee may also take into account changes in patterns in trade in information technology products. The participants expressed their intent to conduct the initial review and any consultations pursuant to paragraph 3 of the Annex to the Declaration according to the procedures attached hereto.

8. The participants also agreed that, in conducting the consultations described in paragraph 5 of the Annex to the Declaration (8), the Committee may consider product classification divergences with a view to ensuring that the actions foreseen in the Declaration are implemented in a coherent fashion by all participants.

GATT 1994 Article XXVIII

9. The participants agreed that any participant that is a WTO Member having recourse to the provisions of Article XXVIII of the GATT 1994 with respect to the possible modification or withdrawal of a concession included in its WTO schedule of tariff concessions, as modified pursuant to these procedures, shall so notify the other participants at the time that it notifies the Director-General of the WTO. Upon the request of any participant, the Committee shall convene a meeting within 30 days of the circulation of the notification to consider the potential impact of the proposed modification or withdrawal of the concession on the trade of other participants in information technology products. Such deliberations shall be without prejudice to rights and obligations under the WTO Agreement.

10. The participants agreed that, in light of the technical specificity of information technology products, participants may wish to consider, in the course of the review provided for in paragraph 3 of the Annex to the Declaration, additional procedures to address the concerns of small- and medium-sized exporting participants regarding their rights under Article XXVIII, bearing in mind that a review will be conducted by the Council for Trade in Goods five years from the date of entry into force of the WTO Agreement pursuant to paragraph 1 of the Understanding on the Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994.

Incorporation of the Annex to the Declaration

11. The participants agreed that the modalities set forth in the Annex to the Declaration, including the Attachments to that Annex, are an integral part of these elements.

Attachments:

A. Ministerial Declaration on Trade in Information Technology Products, WT/MIN(96)/16, 13 December 1996.

B. Approved Schedules of Participants (9).

(1) On behalf of the customs union Switzerland and Liechtenstein.

(2) Participants took note that Panama and Poland submitted documents after 1 March 1997 that could not be reviewed by 26 March 1997 and that others may submit documents on or before 1 April 1997. Participants agreed to meet again during the week of 14 April 1997 to complete the review process with respect to these documents. It was understood that, upon approval of these documents, the procedures set forth in the Annex to the Declaration would apply as if the documents had been approved at the meeting of 26 March 1997, and the States or separate customs territories referred to above would thenceforth be considered to be 'participants` for purposes of the further implementation of the Declaration.

(3) WT/MIN(96)/16, 13 December 1996 (attached).

(4) The WTO Secretariat shall maintain a set of the informal documents exchanged by participants in consultations that led to the decisions taken at that meeting. These documents shall be made available to participants for consultation upon request.

(5) Subject to the completion of domestic procedural requirements.

(6) The text of paragraph 3 is as follows: 'Participants shall meet periodically under the auspices of the Council on Trade in Goods to review the product coverage specified in the Attachments, with a view to agreeing, by consensus, whether in the light of technological developments, experience in applying the tariff concessions, or changes to the HS nomenclature, the Attachments should be modified to incorporate additional products, and to consult on non-tariff barriers to trade in information technology products. Such consultations shall be without prejudice to rights and obligations under the WTO Agreement.`

(7) The text of paragraph 5 is as follows: 'Participants shall meet as often as necessary and no later than 30 September 1997 to consider any divergence among them in classifying information technology products, beginning with the products specified in Attachment B. Participants agree on the common objective of achieving, where appropriate, a common classification for these products within existing HS nomenclature, giving consideration to interpretations and rulings of the Customs Cooperation Council (also known as the World Customs Organization or 'WCO`). In any instance in which a divergence in classification remains, participants will consider whether a joint suggestion could be made to the WCO with regard to updating existing HS nomenclature or resolving divergence in interpretation of the HS nomenclature.`

(8) Available for consultation by participants and WTO Members in the WTO Secretariat (Market Access Division).

PROCEDURES FOR CONSULTATIONS ON AND REVIEW OF PRODUCT COVERAGE

Pursuant to paragraph 7 above, it is the intention of the participants to conduct the initial review and any consultations pursuant to paragraph 3 of the Annex to the Declaration according to the following schedule:

(a) Beginning 1 October 1997 and no later than 31 December 1997, participants may submit to the Committee lists of additional information technology products for possible additional tariff concessions, including supporting technical documentation to facilitate consideration by the Committee, taking into account paragraph 5 of the Annex to the Declaration regarding classification issues. Such lists shall be circulated to all participants.

(b) Beginning 1 January 1998 and no later than 31 March 1998, participants that have submitted the documentation described in paragraph (a) above shall consult upon request with interested participants to clarify information and exchange views on the documentation submitted, including technical specifications of the products covered in such documentation.

(c) No later than 30 June 1998, the Committee shall meet to decide whether to revise Attachment A or B to the Annex to the Declaration, and if so, to establish a revised list of products with respect to which participants would bind and eliminate customs duties and other duties and charges. Such list would replace Attachment A or B.

(d) If the Committee decides to establish a revised list pursuant to paragraph (c), then each participant shall submit no later than 1 September 1998 a document similar to that required under paragraph 2 of the Annex to the Declaration.

(e) The Committee shall meet no later than 15 September 1998 to conduct a review of these documents in a manner similar to that conducted pursuant to paragraph 2 of the Annex to the Declaration, and shall conclude its review no later than 30 September 1998. At that meeting participants shall also consider the possibility and procedures for further reviews.

(f) Upon successful completion of the Committee review, the participants shall submit to the Secretariat the documents incorporating the results of the review as proposed modifications to their WTO schedules of tariff concessions, pursuant to the Decision of 26 March 1980 on Procedures for Modification and Rectification of Schedules of Tariff Concessions (BISD, 27S/25), with a view to the entry into force of the revised schedules, and incorporation in their domestic tariff schedules, no later than 1 January 1999 bearing in mind the need of each participant to fulfil its domestic procedural requirements. Each participant that is not a Member of the WTO shall implement these measures on an autonomous basis, pending completion of its WTO accession, and shall incorporate these measures into its WTO schedule on goods.