WASHINGTON (BLOOMBERG) - Trade negotiators tentatively agreed over the weekend to eliminate tariffs on an array of technology products valued at US$1 trillion worth of global commerce.
The US Trade Representative's office hailed it as a "major breakthrough" in what would be the biggest tariff agreement struck at the World Trade Organisation (WTO) in nearly two decades.
Tariffs for some 250 high-tech items ranging from semiconductors to 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.
The breakthrough toward the WTO's Information Technology Agreement (ITA) took place at an ambassadors' meeting on Saturday at the European Union embassy in Geneva. There, the US agreed to grant further small concessions to China in order to help both South Korea and the EU secure their own deals with Beijing.
The new compromise brokered by the US and WTO director-general Roberto Azevedo is due to be brought to the capitals of the 80 governments involved in the ITA discussions for approval before a Friday deadline.
With all of the remaining major players involved in the weekend breakthrough, the Financial Times said that deadline was now largely procedural.
"Very optimistic that we'll have a final successful deal by the end of next week," WTO's Mr Azevedo tweeted. "We have the basis for an agreement."
"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," US Trade Representative Michael Froman said.
In a statement, the EU said it also expected all the parties to sign on before the Friday deadline.
The global trade in IT products is worth about US$4 trillion annually and the ITA update would see the tariffs lifted for goods that make up about US$1 trillion of that total.
The US said a finalized deal would contribute as much as US$190 billion to the global gross domestic product and support 60,000 US jobs.
Technology manufacturers like Intel, Samsung Electronics, Sandisk and Texas Instruments 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 per cent of global trade in IT products.
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.
US technology industry officials are hopeful the deal could enter into force as soon as July 2016.