In-House Counsel

Maintaining Momentum for Open Trade

The U.S. government has completed tough negotiations of bilateral trade agreements with Peru, Colombia, Panama and South Korea. Because the U.S. market is already relatively open to goods and services from these countries, implementation of these trade agreements will benefit U.S. companies that develop and export products from the U.S. -- companies like Cisco.

To increase our competitiveness in foreign markets, it's imperative that the Congress approve the implementing legislation for these pending free trade agreements (FTAs). By lowering tariffs, ensuring nondiscriminatory access to government procurements, enhancing intellectual property rights protections and reducing technical barriers to trade, implementation of these agreements will help U.S. technology companies compete in markets where our competitors have a leg-up.

Good examples are in Peru, Colombia and Panama, all of which have agreed to join the Information Technology Agreement (ITA), which eliminates customs duties and other import taxes on almost all information and communications technology (ICT) products. ICT tariffs in these countries range from 5-10%. Expansion of the ITA to these countries will not only help U.S. companies compete, but it will also help users of ICT in these countries improve their productivity and competitiveness through lower-cost access to innovative technologies. ITA expansion in Latin America will also send a strong signal to other countries, like Brazil, that high tariffs used to protect domestic producers only serve to punish domestic users of ICT - such as banking, healthcare, education and small- and medium-sized businesses - which are forced to pay higher prices for few choices, putting a serious crimp in their own productivity and competitiveness.

Congressional approval of these FTAs should be a top priority this fall. Not only will implementation of the FTAs benefit U.S. tech companies, but citizens and businesses in these countries will have greater access to the tools that can help them improve their own lives.

Full post as published by Cisco High Tech Policy Blog on September 14, 2007 (boomark / email).