(photo credit: INGIMAGE)
Buying refrigerators, DVD players, and LCD televisions is expected to get a whole lot cheaper in the coming months, following a historic World Trade Organization deal to remove import and export taxes from over 200 electronic products.
The deal, agreed between 54 countries including Israel, is the WTO’s first major tariff-cutting deal in 18 years, and is expected to both lower consumer prices for electronics and give electronics exporters a boost.
“There is no need to stress the significance of this result. The figures provided by the WTO, $1.3 trillion of annual trade, are already very telling by themselves,” said EU Ambassador to the WTO Angelos Pangratis, who chaired the final round of the expansion talks. “Duty-free import and export of IT goods will make world-wide IT industries more competitive and increase the efficiency of global supply lines.”
Items on the approved list include technologies such as digital flight recorders, microphone and sound mixers, lasers, microscopes, headphones, video game consoles, and MRIs and a variety of other medical devices. The devices covered in the agreement represent about a quarter of global electronics trade, according to figures the Economy Ministry cited.
“This is an excellent agreement that will reduce prices, both for consumer and for industrialists and Israeli exporters, and is another step in the struggle we are waging on the cost of living,” said Economy Minister Arye Deri. The agreement, he added, would give a boost to Israel’s hi-tech industries, where medical devices and semiconductor manufacturers are prominent.
The fact that China is a signatory to the deal will facilitate trade to the increasingly consumer-oriented economic behemoth.
The deal’s effects will not be felt immediately. Though every country is required to put together and approve plans for implementing the agreement by early December, the tariff reductions will take effect in four yearly stages, beginning on July 1, 2016.
The tariffs will only reach zero in July 2019, with exceptions for “sensitive products” in certain circumstances.
Israeli consumers will still have to pay other taxes that remain in place, such as the 18% value-added tax.
The Israel Tax Authority said it did not yet have an estimate on how the lower trade taxes would affect the state’s revenues.