December 16, 1996

MINISTERS AGREE TO REMOVE TARIFFS ON COMPUTER-RELATED PRODUCTS

By CAROLYN HENSON
Associated Press Writer

SINGAPORE (AP) -- Trade ministers from most countries that export high-tech goods agreed today to remove tariffs on hundreds of products by 2000, paving the way for prices on such items to drop.

The deal on computer, software and telecommunications products is the crowning success of the World Trade Organization's inaugural ministerial meeting, which ended today with a package of measures designed to liberalize trade around the world.

The high-tech trade deal also was a major victory for the United States, whose representatives had negotiated around the clock all week to get enough countries to sign onto the deal.

U.S. Trade Representative Charlene Barshefsky announced today that 28 nations had formally agreed to join the pact, saying those countries account for 85 percent of the world's high-tech trade. Six other nations said they intended to join the agreement soon.

Once they do, the participating countries will cover 94 percent of the global trade in "information technology" -- much more than the 90 percent that the agreement needed to automatically take effect.

"There is no question this agreement is a full go-ahead. There is no question implementation will begin in 1997," Barshefsky said.

The countries would start cutting their tariffs in four phases beginning in July 1997 and ending in 2000.

In other action by the world trade body, ministers from the 128 member nations adopted a package of trade measures that are a first step in creating international guidelines governing investment, fair competition and government contracts, traditionally a hotbed for corruption.

And they came close to clinching a deal on opening up telephone services to foreign investment and competition around the world. The telecom talks failed last April and now have an extended Feb. 15 deadline. Once signed, the deal would lower the price of international phone calls.

A dispute over labor standards had threatened to disrupt the five-day meeting. The meeting closed with a compromise, and both camps claimed victory. The final conference statement committed members to working to prevent child and slave labor, and called for the WTO to continue its collaboration with the International Labor Organization on such matters.

"It's been an outstanding success," said Singaporean Trade Minister Yeo Cheow Tong, who served as chairman of the conference.

The deal on computer-related technology was the first major trade achievement of the World Trade Organization, set up two years ago as a tough global trade watchdog to succeed the relatively toothless General Agreement on Tariffs and Trade.

Since then, three attempts at forming trade pacts -- in banking and insurance, telephone services, and ports and shipping -- have failed.

The breakthrough came Wednesday night, when the United States and the European Union settled differences over which products would be covered by the deal. That paved the way for key Asian exporters to be brought on board.

Barshefsky said the deal would open the way for more growth in high-tech trade.

Over the last four years, she said, U.S. exports in high-tech goods have increased by 42 percent, despite tariffs in South Korea, Thailand and the Philippines that in some cases are six times as high as those in the United States, and top tariff rates in the EU of 14 percent.

"Imagine then the rate of increase when tariffs are at zero," she said.

Because of increased trade, she said, there will be more competition and prices will drop.

"The benefits of this agreement, certainly for the United States, will be substantial," she said. "The benefits for Asia, Europe and other countries will be equally substantial."