Trade Deals That Benefit Both US and Other Nations Are Possible

Max Rysztak / Bryan Riley /

In last year’s negotiations, the Information Technology Agreement was expanded to include more than 200 new products like GPS devices, printer ink cartridges, and video game systems. (Photo: iStock Photos)

Max Rysztak

Max Rysztak is a member of the Young Leaders Program at The Heritage Foundation.

Bryan Riley 

Bryan Riley is a full-time advocate for free trade through his research and writing for The Heritage Foundation. He brings years of experience in trade and economic issues to his role as Jay Van Andel senior analyst in trade policy. Read his research.

In an update to its Information Technology Agreement, the World Trade Organization began the process of eliminating tariffs on hundreds of technology products, resulting in the organization’s first tariff elimination agreement in almost 20 years.
In this year of strong anti-trade sentiments, U.S. politicians and citizens should take note that good trade deals are possible.



The Information Technology Agreement was originally signed in 1996 with 29 participants. More countries followed, however, as the number of information technology products skyrocketed in the following years.
The agreement’s now 81 members are responsible for about 97 percent of trade for products like calculators and computers. All members are getting a great deal as the original agreement “requires each participant to eliminate and bind customs duties at zero for all products specified in the agreement.” Consumers will see improvements too. Trade deals like this help to lower prices for average shoppers and increase export opportunities for domestic manufacturers.

Since the Information Technology Agreement was enacted in 1997, however, it has received few updates. But in last year’s negotiations, the agreement was expanded to include more than 200 new products like GPS devices, printer ink cartridges, and video game systems. Under current U.S. trade law, these beneficial reductions, which do not require congressional approval, actually affect about $1.3 trillion of annual global exports.
But this trade deal doesn’t merely reduce tariffs. In fact, it actually eliminates them for many high-tech products.
Many politicians like to talk about “fair trade,” but what’s more fair than a tariff of zero? With an estimated global gross domestic product increase of almost $200 billion resulting from the agreement expansion, everyone can benefit.
Many mistakenly argue that similar trade deals hurt domestic manufacturing, but the opposite is the case: U.S. manufacturing output has never been higher.
The update to the agreement will increase domestic competition, boost economic growth, and lower manufacturing costs. As the Office of the United States Trade Representative points out, “… duty-free trade in the products covered by ITA [Information Technology Agreement] expansion will lower costs for downstream manufacturing and services industries that rely on information and communications technology parts and components as inputs, increasing their competitiveness.”
In other words, this trade agreement will help U.S. businesses compete internationally. American companies already have over $100 billion in global sales of information and communications technology products.
While this summer’s expansion is only the first part of a four-year implementation plan to reduce tariffs, it serves as an example for politicians in creating and implementing trade deals. Many candidates of all parties seem to think trade is a zero-sum game. If another country wins, the United States must—by default—lose. That misguided thinking only prevents America from reaching its economic potential. Their rhetoric of “fair trade” may sound appealing, but free trade is the surest path to true economic prosperity and fairness.