Global accord to end IT tariffs nears

The World Trade Organisation (WTO) is confident of signing a long- awaited global information technology accord this month to scrap tariffs and open the way for a vast expansion of the $600bn (pounds 370bn) global industry.

The WTO said yesterday that more than 90 per cent of countries needed for the accord had agreed to scrap tariffs on information technology (IT). The organisation added that "it was confident" that the rest would soon follow.

The US, the European Union, Japan and more than a dozen other countries had agreed in December in Singapore to remove tariffs on computer monitors, chips and other products by 2000. They set a deadline of 15 March to enlist other nations, and that process was largely complete, the WTO said.

Companies that make computer and telecommunications equipment, such as ICL, Racal, Psion, Hitachi and Samsung Electronics, stand to profit from an abolition of tariffs.

"We want tariffs to be lifted as quickly as possible,'' said Karl Leitenberger, an executive in the economics department of Siemens. German producers could benefit even more than their US counterparts, he said, because European tariffs and imports are high.

Renato Ruggiero, director-general of the WTO, said the Geneva-based arbiter of world trade had commitments from countries representing more than 90 per cent of the world market in IT products, "putting us over the threshold that was set for an agreement".

Siemens said an accord would save the company between DM70m and DM100m (pounds 25m and pounds 36m) a year starting in 2000, based on current imports. In December, LG Electronics, South Korea's second-biggest electronics producer, said it would double its overseas earnings if tariffs were removed.

The WTO said Malaysia, Thailand and India were among countries that pledged in recent days to scrap tariffs. Malaysia accounts for about 5 per cent of the global industry.

"This should give companies more financial muscle to offset sharp price competition in this industry,'' said Bernhard Rohleder, a spokesman for Eurobit, an industry group which represents 90 per cent of the European IT market. Most of the benefits would probably get passed on to customers, though an accord would help companies too, he said.

Import duties totalled 1.6bn ecus (pounds 1.13bn) in Europe last year, said Eurobit, which estimated the average computer would be 50 ecus cheaper without tariffs.