January 2000 PulseOnline: Headline News: Landmark China WTO Package Reached (Page 3 of 6)

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TIA Effort to Ensure Future Trade with China
For this reason, TIA has developed a draft letter for the association's member companies to use as a basis for writing to Congress on this matter. Please visit http://www.tiaonline.org/international/regional/asia/wto.cfm#pntr to download a copy to send to your Senator and/or Congressman. To help locate the name and address of your congressional representatives, please visit http://www.senate.gov%20or%20http://www.house.gov; both of these sites allow users to locate the name of a representative by entering a state and zip code.

TIA has summarized the outcomes of the China WTO accession package based on details available at press time. These points are included below. As more details become available, TIA will keep its membership updated on aspects of the agreement that affect the industry. For further details on this issue, contact Christine Keck at (202) 383-1482 or email ckeck@tia.eia.org.

WTO Outcomes - December 1999

Agreement to Sign Onto the ITA - China will participate in the Information Technology Agreement (ITA), eliminating all tariffs on computers, telecom equipment, semiconductors, computer equipment and other high-tech products. Tariffs will fall from the current average of 13.3 percent to 0 percent by 2005.

The phase-out schedule runs from date of accession through 2005. The formula is as follows: if the differential between the base rate (whatever the current rate is) and the end rate (zero) is:
- Less than or equal to 2, elimination takes place upon accession;
- Over 2 but less than or equal to 5, elimination takes place in 2001;
- Over 5 but less than or equal to 10, elimination takes place in 2002;
- Over 10 but less than or equal to 15, elimination takes place in 2003;
- Over 15 but less than or equal to 20, elimination takes place in 2004;
- Over 20, elimination takes place in 2005.
These cuts are made in equal annual installments. For example, semiconductor tariffs currently face a 6 percent tariff. Upon accession, the tariff rate will drop from 6 to 4 percent. One year later (2001), the tariff will drop from 4 to 2 percent. Then, one year later (2002), the tariff will be eliminated.

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