Malaysia stands to benefit greatly from the expansion of the Information Technology Agreement (ITA) following the conclusion of negotiations yesterday at the 10th World Trade Organisation Conference in Nairobi, Kenya. It is a historical and significant achievement that is hoped to inspire progress in other areas of WTO negotiations.

"With this further liberalisation of trade expansion under the original 1996 ITA, Malaysia's ICT industry will have easier access to a wider market globally for its products," International Trade and Industry Minister Dato' Sri Mustapa Mohamed said.

He said the original ITA had helped Malaysia's ICT industry increase revenues nearly three-fold from USD 21.7 billion in 1996 to USD 60.5 billion in 2010, averaging 8% annual growth. Malaysia was ranked 8th out of 30 leading exporters and 9th out of 30 leading importers of ICT products in 2010.

Malaysia, represented by Dato' Sri Mustapa, concluded the negotiations on the expanded ITA yesterday together with the other 23 countries, including major IT producing powerhouses such as China, United States, European Union, Japan, Korea and several ASEAN Member States. The nations involved account for approximately 90 per cent of world trade in these products. 

This expansion covers 201 high‐technology ICT products with an estimated global annual trade of $1.3 trillion, comprising approximately 10 per cent of world trade in goods. The  ITA Expansion negotiations, which began in 2012, include new generation multi‐component integrated circuits (MCOs), touch screens, GPS navigation equipment, portable interactive electronic education devices, video game consoles, and medical equipment, such as magnetic resonance imaging products and ultra‐sonic scanning apparatus.

The ITA Expansion commitments will provide market opportunities for more than 600 local producers to boost their exports to participating countries with its requirement to rapidly eliminate duties on the majority of their ICT related products.

Dato' Sri Mustapa urged Malaysian companies to fully capitalise on these market-liberalisation measures. "We will see, for example, massive reductions in tariffs for Canada (at least 88%), the US (at least 80%), the EU (at least 77%) and Chinese Taipei (at least 64%)," Dato' Sri Mustapa said.

He added tariff liberalisation through the ITA mechanism complements ASEAN economic integration goals, particularly as the regional hub for global value chain interconnectivity. It benefits Malaysian producers of ICT products by lowering the production costs in terms of cheaper parts and components, thereby improving the competitiveness of Malaysia’s exports.

Dato’ Sri Mustapa Mohamed
Minister of International Trade and Industry 
17 December 2015