U.S. Information and Communication Technology Exports: TPP Helps Connect the World to American-Made Digital ProductsMarch 8, 2016
Sergio Delgado is the International Trade Specialist in the Office of Health & Information Technologies
One of the larger trade categories, Information and Communication Technology (ICT) Goods includes optical fibers, audio-video equipment, television reception apparatus, coaxial cable, and batteries, in addition to those items covered by the World Trade Organization’s Information Technology Agreement, whose coverage was recently expanded to include over 200 new product categories. These items range from machines that bring the Internet into our homes; entertainment to our televisions, radios, and mobile devices; processing power to cash registers and point of sale systems; all the way to the crucial technologies needed to help teach children across the world.
The use of digital products has increased at a rapid rate within the last decade. Essentially, these are the every-day items that connect us to each other, across America and around the world. The TPP creates a huge opportunity to increase the export of American-made ICT goods, and the digital services they enable, to our partners overseas.
In 2014, $9.7 billion in U.S. ICT goods were exported to new TPP countries, where they faced tariffs up to 35 percent, putting made in America goods at a disadvantage in comparison to other countries. U.S. exporters also face border delays and customs inefficiencies that increase costs and impede the flow of U.S. exports throughout the region.
A few months ago, leaders from across the Asia Pacific completed negotiations for the Trans-Pacific Partnership (TPP) to combat these trade barriers. This historic agreement not only benefits American businesses, but also facilitates access to reliable, well-made American products for consumers throughout the region – improving the lives of our neighbors abroad.
This agreement is crucial to American businesses and workers. In 2014, twenty states across the country exported more than $700 million in ICT goods to TPP markets alone. That same year, the sector employed more than 700,000 American workers.
President Obama recognizes that technology plays a critical role in both economic growth and job creation in the United States. In 2011, speaking at the National Innovation and Growth Conference the President stated “We have to do everything we can to encourage the entrepreneurial spirit, wherever we find it. We should be helping American companies compete and sell their products all over the world. We should be making it easier and faster to turn new ideas into new jobs and new businesses. And we should knock down any barriers that stand in the way. Because if we’re going to create jobs now and in the future, we’re going to have to out-build and out-educate and out-innovate every other country on Earth.”
Once enacted, TPP will reduce the cost of exporting, increase the competitiveness of U.S. goods, and promote fairness and transparency in trade among the participating countries. The TPP provisions that promote trade in digital products (e.g., software, music, video, e-books) as well as e-commerce generally also benefit the ICT goods industry, which makes the equipment that enables global trade via the Internet.