China and US Trade ministers have reached an agreement that would reduce tariffs on information technology in what will immensely benefit Kenya and other developing countries. The move, which will eliminate tariffs on 201 products with an annual trade value of $1 trillion (Sh102 trillion), was announced by the two countries on the sidelines of the ongoing World Trade Organisation (WTO) 10th Ministerial Conference in Nairobi yesterday.
“The two ministers have agreed on the staging of their respective schedules. They hope this will provide important momentum to complete the Information Technology Agreement (ITA) expansion negotiations during the ongoing conference.
They also believe the outcome of the ITA expansion negotiations will promote world information technology trade and will further the growth of the world economy,” said the jointly issued statement. This means WTO members can now fast-track negotiations to reduce global tariffs on products as on semiconductors used for assembly of computers, laptops and tablets.
Other products covered in the deal include global positioning navigation systems, medical equipment which include magnetic resonance imaging (MRI) machines, machine for manufacturing printed circuits and telecommunications satellites With the expected decrease of semi-conductors, Kenya’s economy is now on the verge of information communications technology (ICT) take-off that could leverage on the new tariffs to assemble cheaper information technology (IT) equipment for local consumption and export market.
Dropping barriers on the IT products will spur the growth computer and laptop assembly industry in Kenya. Already eight local institutions—Kenyatta University, Multimedia University, Strathmore University’s Strathmore Research and Consultancy Centre, Meru University of Science And Technology, Jomo Kenyatta University of Agriculture and Technology, Masinde Muliro University of Science and Technology, Moi University and University of Nairobi – have expressed interest to supply laptops for the Digital Literacy Project.
Negotiators at the WTO say that for most IT devices, tariffs would be scrapped immediately, and the vast majority of taxes would be eliminated after three years. ITA is therefore a major tariff-cutting deal at the WTO in 18 years and it unlocks significant value in an innovative sector of the world’s economy.
ICT is increasingly recognised as key drivers of sustainable development which refer to the catalytic power of ICTs and was responsible for the growth of approximately one-quarter of Kenya’s Gross Domestic Product, and the move could enhance growth further.
More importantly ICT plays a large role in our day-to-day lives, addressing challenges facing Kenyans in general, particular sectors such as finance, health, education, agriculture.In education, ICT enables more children to access learning content.
This area has huge potential for growth in enabling online education. Thus, deal comes as a major boost for the recently launched an e-curriculum All 161 WTO members are set to benefit from this WTO agreement because they will enjoy duty-free market access in the markets of those members who are eliminating tariffs on IT products.
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