How An Information Technology Agreement 3.0 Would Bolster Global Economic Growth and Opportunity

How an Information Technology
Agreement 3.0 Would Bolster Global

Economic Growth and Opportunity
STEPHEN EZELL AND LUKE DASCOLI | SEPTEMBER 2021
Expanding the 25-year-old trade agreement that eliminates tariffs on ICT goods would spur
broad-based growth for countries that sign on, because lowering prices increases ICT adoption,
which spurs productivity and innovation throughout the economy.
KEY TAKEAWAYS
▪ The ITA has been one of the WTO’s most successful plurilateral trade agreements. It has
played a catalytic role in developing efficient global value chains and lowering prices for
ICT goods that drive the digital economy.
▪ The vast majority of the economic benefits that ICT goods generate—more than 90
percent in developing countries—stem not from their production but from their adoption,
as it spurs innovation and productivity gains in all sectors.
▪ If the 82 signatories of the original ITA were to join an ITA-3 that eliminates tariffs on
another 250 six-digit product categories, the global economy would grow by $784 billion
over the ensuing 10-year period.
▪ Pakistan, Kenya, Brazil, and Nigeria would enjoy the largest relative GDP growth—3.2
percent, 2.2 percent, and 1.6 percent each, respectively, over 10 years.
▪ ITA expansion could help grow U.S. GDP by more than $200 billion over a decade, while
increasing exports of ICT products by $3.5 billion, boosting revenues of U.S. ICT firms by
$12 billion, and supporting more than 78,000 new U.S. jobs.
▪ Brazil, China, Japan, Kenya, Pakistan, and the United States each could expect to
generate more tax revenue because of the growth ITA expansion would spur than they
would forgo in tariff revenue.
▪ Countries that joined the 1996 ITA and its 2015 expansion enjoyed statistically
significant increases in their shares of total imports and exports.
INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | SEPTEMBER 2021

EXECUTIVE SUMMARY
The Information Technology Agreement (ITA) has been one of the World Trade Organization’s
(WTO’s) most successful plurilateral trade agreements. The agreement, originally signed in 1996
and to which 82 countries are now signatories, eliminates tariffs on trade in hundreds of
information and communications technology (ICT) products. In 2015, 53 countries joined
together in completing (and in 2016, implementing) an ITA expansion (ITA-2) that eliminated
tariffs on an additional $1.3 trillion in annual global trade in 201 ICT parts, components, and
products. 1 By eliminating tariffs on trade across hundreds of ICT products, the ITA has played an
indispensable role in creating “zero-in/zero-out” tariff environments that have fostered the
development of ICT global value chains (GVCs). Moreover, by reducing prices through tariff
elimination, the ITA has facilitated greater adoption of the ICT products that lie at the core of the
global digital economy and power the downstream innovative and competitive capacity of every
industry that deploys them. This ITA-engendered increase in nations’ ICT capital stock leads
directly to greater economic growth in developed and developing nations alike.
Yet, technologies continue to evolve, and now ICT is found at the core of an ever-increasing
range of products, from energy-efficient green technologies such as storage batteries to personal
fitness monitors to the industrial robots and 3D printers that are driving the global smart-
manufacturing revolution. As such, an initial group of companies has come together to identify
over 250 additional ICT six-digit product codes under the Harmonized Commodity Description
and Coding System as candidates for potential ITA inclusion. This report examines the economic
and tariff revenue impacts such an “ITA-3” would have for 14 nations: Brazil, China, Costa Rica,
Indonesia, Japan, Kenya, Malaysia, Nigeria, Pakistan, South Korea, Taiwan, Thailand, the United
States, and Vietnam. 2 The analysis finds that ITA-3 accession would generate tangible economic
growth for all nations assessed, and that for many nations, tax revenues generated from
enhanced economic growth would more than make up for tariff revenues forgone. This report
begins with an overview of the ITA and global trade in ICT products before moving on to examine
how ICT drives economic growth, articulating the logic behind bringing the proposed ICT
products into an ITA-3 and then turning to the analysis of the economic impact of ITA-3
accession for the study countries.
Key Findings
Participation in the ITA provides an impetus for countries to reduce tariffs, thereby lowering the
prices for, and expanding the consumption of, productivity-enhancing ICT, while deepening
countries’ participation in global value chains for the production of ICT goods and services.
Moreover, joining the ITA can engender faster economic growth and higher living standards
because it gives businesses and individuals access to more affordable and higher-quality ICT,
which are the modern economy’s chief drivers of productivity, innovation, and economic growth.
ITA-3 expansion could help grow U.S. GDP by over $200 billion over a decade, increase U.S. exports
of ICT products by $3.5 billion, boost revenues of U.S. ICT firms by $12 billion, and support the
creation of over 78,000 new U.S. jobs.
Leveraging these dynamics, the Information Technology and Innovation Foundation (ITIF) found
that the proposed ITA-3 expansion would generate positive economic impacts by the 10th year
INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | SEPTEMBER 2021 PAGE 1

post ITA-3 expansion for all 14 study countries. In percentage terms, ITIF found that Pakistan,
Kenya, Brazil, and Nigeria would enjoy the largest economic growth in the 10th year post ITA-3
accession, with cumulative economic growth over that 10-year period equivalent to 3.2 percent
of Pakistani, 2.15 percent of Kenyan, and 1.6 percent of Brazilian and Nigerian gross domestic
product (GDP), respectively. (See table 1.) Moreover, if all 82 ITA-1 signatory countries were to
join the proposed ITA-3, global GDP could cumulatively grow by $784 billion over the ensuing
10 years. In absolute terms the United States and China would be the biggest beneficiaries. ITA-
3 expansion would be poised to deliver a cumulative $208 billion in U.S. GDP growth over 10
years, equivalent to 0.83 percent greater U.S. GDP growth than would otherwise be expected.
Moreover, ITIF found that ITA-3 expansion would increase U.S. exports of ICT products by $3.5
billion, boost revenues of U.S. ICT firms by $12 billion, and support the creation of
approximately 78,000 new U.S. jobs. China’s economy would cumulatively grow by 0.59 percent
to be approximately $175 billion greater than would otherwise be the case as a result of ITA-3
expansion. The economic growth generated by an ITA-3 expansion would produce tax income
that for at least six study countries would well exceed tariff revenues forgone, and for three more
countries would close nearly 70 percent of the revenue gap after 10 years post ITA-3 accession.
Table 1: Summary of economic and revenue impacts over 10 years post ITA-3 accession
Cumulative 10-Year
Cumulative 10-Year Income Tax Revenue Gained
GDP Growth Attributable
Country GDP Growth Attributable Revenue Gained as a Share of
to ITA-3 Expansion
to ITA-3 Expansion (U.S. Millions) Revenue Forgone
(U.S. Billions)
Brazil $33.7 1.6% $2,492 184%
China $175.6 0.6% $9,657 118%
Costa Rica $0.4 0.5% $20 56%
Indonesia $7.9 0.4% $387 77%
Japan $17.6 0.3% $1,795 147%
Kenya $3.0 2.2% $232 184%
Malaysia $1.3 0.2% $108 52%
Nigeria $11.7 1.6% $446 69%
Pakistan $15.7 3.2% $550 125%
South Korea $8.2 0.4% $746 70%
Taiwan $8.8 0.9% $754 59%
Thailand $3.9 0.6% $239 32%
United States $208.6 0.8% $23,159 161%
Vietnam $2.5 0.5% $159 14%

Contents
Executive Summary ............................................................................................................ 1
Key Findings .................................................................................................................. 1
Introduction ....................................................................................................................... 4
How ICT Drives Economic Growth ........................................................................................ 6
How ITA Participation Benefits Countries............................................................................ 10
Deepening Countries’ Participation in ICT GVCs ............................................................... 10
Boosting Countries’ Exports of ICT Goods and Services ..................................................... 13
Joining the ITA Boosts Countries’ Trade Participation ....................................................... 15
The Logic for Bringing Additional ICT Goods Under ITA-3 Coverage ....................................... 17
Semiconductors, Semiconductor Manufacturing Equipment, and Related Components ........ 17
Energy-Efficient Technologies ........................................................................................ 18
Smart Manufacturing Technologies ................................................................................. 20
Drones for Commercial and Personal Use ........................................................................ 23
Medical Technologies .................................................................................................... 24
Analyzing the Economic Impacts of a Propsed ITA-3 Expansion ............................................ 24
Summary Explanation of Methodology and Data Sources ................................................... 25
Modeling the Economic Impacts of ITA-3 Accession ......................................................... 26
Addressing Developing Countries’ Potential Concerns Regarding ITA Accession ................... 32
Further Implications for Developing Nations .................................................................... 38
Assessment of Full ITA Membership for Non-ITA or ITA-1-Only Nations .............................. 39
Analyzing the Impact of ITA-3 Expansion on the United States ............................................. 41
Conclusion ...................................................................................................................... 42
Appendix A: List of Countries by Current ITA Membership .................................................... 43
Appendix B: Growth-Revenue Estimates Methodology .......................................................... 44
Calculating ITA Trade Flows ........................................................................................... 44
Calculating ITA Tariffs ................................................................................................... 45
Appendix C: Methodology of Econometric Exercise .............................................................. 46
Estimated Regression Equations ..................................................................................... 46
Appendix D: ITA Product Codes (HS2017 Six-Digit Level) .................................................... 47
Endnotes ......................................................................................................................... 50

INTRODUCTION
In December 1996, 29 WTO member nations launched the ITA, a novel trade agreement in
which participating nations eliminated tariffs on eight broad categories of ICT products (e.g.,
semiconductors, computers, telecommunications equipment, etc.). The ITA-1 now counts 82
nations—which collectively account for approximately 97 percent of global trade in ITA-covered
goods—as signatories. Countries that have thus far neglected to join the ITA have missed out on
tremendous growth opportunities. First, countries not joining the ITA harm themselves by
retaining tariffs that add to the cost of key productivity- and innovation-enhancing ICT products,
thus constraining their consumption and adoption. Second, those tariffs only serve to diminish
the competitiveness of countries’ goods that depend on intermediate ICT inputs. Third, countries
not participating in the ITA have seen their participation in GVCs for the production of ICT goods
plummet since the ITA was introduced. Indeed, the evidence shows that ITA accession is
beneficial for both countries’ domestic industries and their broader economy.
In 2012, owing to the tremendous success of the original ITA, member nations initiated
negotiations toward expanding the ITA to add innovative ICT products commercialized since
1996 as well as some categories of ICT goods not included in the original agreement. ITA-
expansion negotiations concluded in December 2015, and additional tariff eliminations began on
July 1, 2016. 3 The expansion, which the WTO estimated would eliminate tariffs on an additional
$1.3 trillion in annual global trade of ICT parts and products, represented the first major tariff-
cutting deal completed at the WTO in 19 years. 4 The ITA-2 has produced annual global tariff
savings of at least $13.8 billion. 5
It’s important to remember that the entire global digital economy is underpinned by ICT goods—
semiconductors, servers, routers, computers, smartphones, tablets, etc.—that fundamentally power it.
Digital technologies are increasingly powering the global economy. For instance, analysts at
Oxford Economics estimated that by 2016 the digital economy had already accounted for 22.5
percent of global GDP. 6 Analysts at the research firm IDC have estimated that, going forward, as
much as 60 percent of global GDP will be digitized (meaning largely impacted by the
introduction of digital tools) by 2022. 7 That aligns with estimates that as much as half of all
value created in the global economy over the next decade will be created digitally. 8 And while
certainly the digitalization of the global economy has brought entirely new industries and
enterprises to the fore—web search, social media, artificial intelligence (AI), cloud, etc.—at least
75 percent of the value of data flows over the Internet actually accrue to traditional industries
such as agriculture, manufacturing, finance, hospitality, and transportation. 9
Moreover, it’s important to remember that the entire global digital economy is underpinned by
the ICT goods—semiconductors, servers, routers, computers, smartphones, tablets, etc.—that
fundamentally power it. And by helping to reduce the price of ICT goods by eliminating tariffs on
them, the ITA has played a not-inconsequential role in the growth of global production and trade
in the very ICT products powering the global digital economy. For instance, the U.S. Bureau of
Labor Statistics estimated that the U.S. consumer price index for “personal computers and
peripheral equipment declined 96 percent” between 1997 and 2015. 10 And while certainly
Moore’s Law (i.e., semiconductors’ capabilities doubling as their costs halve) and other

technological innovations played a key role there, ITA-inspired tariff reductions and the evolution
of efficient ICT GVCs certainly contributed as well.
Figure 1: Value of two-way global trade in ICT products, 1996–2019 11
$5.0
$4.5
$4.0
$3.5
1997 ITA in Force
US$Trillions
$3.0
2016 Expansion
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
Indeed, global two-way trade in ICT products has grown more than threefold since the ITA
entered force in 1997, increasing from $1.4 trillion in 1997 to $4.25 trillion in 2019 (the most
recent year data is available). (See figure 1.) Further, global two-way trade in ICT products
increased 15 percent since the 2015 ITA expansion. While global imports of ICT products did
decrease 3 percent from 2018 to 2019, and decreased again with the start of the COVID-19
pandemic, preliminary 2020 ICT trade data for Germany, Hong Kong, and the United States
suggests a growing reliance on digital technologies to subsist through global lockdowns. In fact,
sales for semiconductors, a foundational technology enabling all other ICT products,
unexpectedly grew in 2020 and is forecast to grow significantly in 2021 (e.g., global
semiconductor sales were actually 29.2 percent larger in Q2 2021 than Q2 2020) due in large
measure to the added demand for such ICT products brought on by the pandemic. 12
Recognizing that ICT continues to evolve and underpin a much greater range of products—from
medical devices and industrial robots to drones and energy-efficient technologies—than they did
a decade ago, an initial group of companies has come together to propose an ITA-3 that would
bring over 250 additional six-digit HS2017 product codes under ITA coverage. An ITA-3 would
ensure that new technologies of ICT goods are included: for instance, printers were included in
the original ITA, but between the ITA-E and ITA-3 the full slate of modern 3D (additive
manufacturing) printers should be covered. Similarly, just as the ITA-2 included next-generation
multi-component semiconductors (MCOs) that were not part of the original ITA, an ITA-3 would
include semiconductor-based transducers and other next-generation semiconductor
technologies. 13 An ITA-3 initially contemplates over 250 discrete ICT products or components for
inclusion, concentrated in the following categories: semiconductor manufacturing, energy-
efficient technologies, medical devices and equipment, meters, electronics packaging and

transport, flat panel displays, high-speed digital cameras, 3D printers, smartphones, drones and
satellites, and industrial robots. (See figure 2.) Subsequent sections of this report articulate the
rationale for including these ICT products in an ITA-3 expansion and evaluate the economic
impacts of the proposed expansion on the 14 aforementioned countries. First, the report briefly
turns to exploring how ICT drives economic growth and explaining why ITA membership is
beneficial for developed and developing countries alike.
Figure 2: Counts of proposed ITA-3 products by ICT category 14
Semiconductor Manufacturing 60
Energy Efficient Technology 51
Medical Devices & Equipment 26
Meters 24
Electronics Packaging & Transport 20
Flat Panel Displays 17
Cameras 11
Additive Manufacturing (3D Printers) 11
Smartphones & Telecoms Equipment 10
LED Light Sources 8
Drones and Satellites 7
Industrial Robots 3
Other 3
0 10 20 30 40 50 60 70
HOW ICT DRIVES ECONOMIC GROWTH

Increasing productivity—that is, economic output per unit of input, whether that input is capital,
labor, data, or technology—is the principal way economies grow over time. 15 Those productivity
gains can come from all enterprises in a country (e.g., banks, farms, manufacturers) becoming
more productive or from countries shifting the mix of enterprises in their economy (e.g.,
replacing lower-value-added sectors with higher-value-added ones, such as call centers with ICT
services providers). 16 While both mechanisms are important, as the McKinsey Global Institute
(MGI) found in its report, “How to Compete and Grow: A Sector Guide to Policy,” the
overwhelming source of a country’s productivity growth, and thus economic growth, comes from
bolstering the productivity of all the enterprises and industries that already predominantly
comprise an economy. 17
And the principal way economies can increase their productivity arises from leveraging the power
of ICT. ICTs are such powerful tools precisely because they represent a general-purpose
technology that enhances the productivity and innovative capacity of every individual, enterprise,
and industry they touch throughout an economy—something that holds true for both developed
and developing countries.
Indeed, ICT represents “super capital” that has a much larger impact on productivity than do
other forms of capital. As research performed by Oxford Economics confirms, ICT generates a

bigger return to productivity growth than do most other forms of capital investment. 18 For
instance, ICT capital has a three to seven times greater impact on firm productivity than does
non-ICT capital. ICT workers also contribute three to five times more productivity than non-ICT
workers do. 19 In their report, “The Impact of ICT on East Asian Economic Growth,” Ahmed and
Ridzuan explained this dynamic, “The ICT revolution has contributed significantly to the whole
economy by raising productivity. First, ICT increases labor productivity in ICT-using industries by
making labor produce more or work more efficiently. Second, ICT makes physical capital become
more productive.” 20 As a result, revenue collection by nations that tax this ICT “super capital”
through tariffs and other means is particularly damaging.
It’s vital to emphasize that the central way ICT drives a country’s economic growth is not through
the production of ICT goods (e.g., the manufacturing of computers or smartphones). Rather, the
vast majority of the economic benefits generated from ICT, especially in developing countries,
stem from greater adoption of ICT across an economy. 21 Ultimately, ICTs’ productivity-enhancing
and innovation-enabling benefits at the individual, firm, and industry levels aggregate to drive
productivity and economic growth at an economy level. 22
The vast majority of the economic benefits generated from ICT, especially in developing countries,
stem from greater adoption of ICT across an economy.
This explains why multiple academic studies find strong linkages between ICT consumption (i.e.,
usage) and economic growth. For example, a December 2010 World Bank report, “Kenya
Economic Update,” finds that “ICT has been the main driver of Kenya’s economic growth over
the last decade.” 23 Specifically, the report finds that ICTs were responsible for roughly one-
quarter of Kenya’s GDP growth during the 2000s. Moreover, ICTs’ contribution to Kenyan
economic growth only grew over time, with the ICT sector providing a more than six-times-greater
contribution to Kenyan GDP in 2009 compared with 1999. 24 Similarly, ICT accounted for 38
percent of Chinese total factor productivity (TFP) growth and as much as 21 percent of Chinese
GDP growth from 1980 to 2001. 25 Likewise, Ahmed and Ridzuan further found “a positive
contribution of ICT to economic growth” across eight East Asian countries: China, Japan, Korea,
Indonesia, Malaysia, Philippines, Singapore, and Thailand. 26 As Richard Heeks, professor of
development informatics at the University of Manchester estimated, “ICTs will have contributed
something like one-quarter of GDP growth in many developing countries during the first decade
of the 21st century.” 27
Indeed, as Farhadi, Ismail, and Fooladi wrote in their report, “Information and Communication
Technology Use and Economic Growth,” “The more a country use[s] ICT, the greater is its
economic growth.” 28 The authors found that if countries improve their score on the “ICT Use
Index” (which measures a country’s number of Internet users, fixed broadband Internet
subscribers, and mobile-phone subscriptions per 100 inhabitants), then their economic growth
increases by 0.17 percent. 29 The World Bank has likewise documented this effect, finding that a
10 percent increase in high-speed broadband Internet penetration adds 1.38 percent to annual
per capita GDP growth in developing countries. Likewise, a 10 percent increase in mobile-phone
penetration adds 0.81 percent to annual per capita GDP growth in developing countries. 30 (See
figure 3.) That research has been corroborated by a study by Czernich et al. which analyzes the
effects of broadband infrastructure on economic growth for 25 Organization for Economic

Cooperation and Development (OECD) countries from 1996 to 2007 and found that a 10 percent
increase in a country’s broadband penetration rate drives annual GDP per capita growth of 0.9 to
1.5 percent. 31 More recently, studies have found that a 10 percent increase in mobile-device
penetration increases productivity by 4.2 percentage points. 32
Figure 3: Impact of a 10 percent increase in key ICT penetration on annual percent GDP growth 33
1.5%
1.38
1.21
1.12
1.0%
0.81
0.77
0.73
0.60
0.5% 0.43
0.0%
Fixed Mobile Internet Broadband
High-income countries Low- and middle-income countries
Indeed, evidence that an expanding base of ICT capital stock powers countries’ economic growth
increasingly comes from all quarters of the world. 34 For the Mideast, Nasab and Aghaei
investigated the impact of ICT investments on economic growth in seven Organization of the
Petroleum Exporting Countries (OPEC) nations from 1990 to 2007, finding that ICT “has a
significant positive impact on economic growth in the sampled countries,” and underlining the
need for countries to adopt proactive policies to encourage ICT investments to boost economic
growth. 35 Veeramacheneni, Ekanayake, and Vogel analyzed 10 Latin American countries from
1975–2003 seeking a causal relationship between ICT and economic growth, and found a two-
way causality between ICT and economic growth in two-thirds of the countries and, moreover,
that ICT contributed to economic growth in 8 of the 10 countries included in the sample. 36
Zagorchev, Vasconcellos, and Bae, in a study of eight Central and Eastern European countries
from 1997–2004, found that financial development and increased investment in
telecommunications technology contributed significantly to GDP growth per capita. 37 Toader et
al. analyzed the effect of using ICT infrastructure on economic growth in European Union
countries over 18 years from 2000 to 2017 and found that an increase of 1 percent in the use of
ICT infrastructure contributed to GDP per capita growth of between 0.0767 percent (fixed-
broadband subscriptions) and 0.396 percent (mobile cell subscriptions). 38 On average, a 1
percent increase in ICT capital stock leads to a 0.06 percent increase in a country’s GDP. This
elasticity is crucial in modeling GDP growth associated with countries joining the ITA.

The Latest Evidence Regarding the Economic Growth Impacts From ICT
Despite this impressive body of evidence documenting the powerful impact of ICT on economic
growth, some skeptics have questioned the extent to which ICT adoption can increase economic
growth in developing nations, arguing that developing countries may lack human capital,
governance, or other ICT-complementary factors or that their labor-to-capital cost ratio is too low,
making it less economical to add ICT capital. 39 And some research conducted during the late
1990s and early 2000s does appear to suggest as much, or at least that ICTs’ benefits were
greater for developed economies. For instance, in 2004, economist Khuong Vu, in analyzing
economic growth data between 1990 and 2000, suggested that “the results indicate that ICT
plays a more important role in determining the output growth for the developed economies than
for the developing ones.” 40 Similarly, Ayoub Yousefi investigated whether ICT contributed to
economic growth across 62 countries with different levels of development from 2000 to 2006,
finding that ICT exerted a greater impact on GDP growth in upper-middle-income countries than
in lower-income countries. 41
Developing nations’ investments in telecommunications infrastructure are 10 to 40 percent more

effective in generating economic growth than are similar investments made by developed countries.
However, while it may have been the case that, in earlier decades, developed countries realized
higher rates of return from ICT investments than did developing countries, that is clearly no
longer true. Analyzing ICT investments and economic growth from 1995 to 2010 for 59
countries across various stages of development, economist Thomas Niebel concluded that “the
regressions for the subsamples of developing, emerging, and developed countries do not reveal a
statistically significant difference of the output elasticity of ICT between these three country
groups.” 42 Niebel’s estimates indicate that, on average, regardless of a country’s development
status, a 1 percent increase in ICT investment increases economic growth by 0.05 to 0.09
percent annually. 43 Similarly, Majeed and Ayub explored how different ICT indicators influenced
economic growth in 149 countries from1980 to 2015, with the empirical results suggesting the
use of ICT infrastructure had a positive and significant impact on economic growth. 44
And, in fact, it appears that ICT investments now generate higher returns than ever before. In
analyzing 29 economic studies that isolate the rate of returns to ICT investment, Cardona,
Kretschmer, and Strobel revealed that “ordering the studies by their average year of the data
used for the estimation, we find a positive time trend.” 45 Further evidence supports the
contention that, going forward, developing countries stand to gain even more from adopting
greater levels of ICT than do developed countries. For example, as the European Commission
found, developing nations’ investments in telecommunications infrastructure are 10 to 40
percent more effective in generating economic growth than are similar investments made by
developed countries. 46
Put simply, a growing body of evidence documents the positive effects ICT has on economic
growth, for both developed and developing countries. Summarizing 58 empirical studies
estimating the economic impact of ICT, Stanley, Doucouliagos, and Steel found that “on average,
these technologies have contributed positively to growth.” 47 In terms of the magnitude to which
ICT spurs economic growth, a review of econometric literature by Cardona, Kretschmer, and

Strobel finds that, on average, an increase in ICT capital stock of 1 percent leads to a 0.06
percent increase in a country’s GDP. 48
HOW ITA PARTICIPATION BENEFITS COUNTRIES

The ITA has benefitted participating—and especially developing—countries considerably. 49 In
2010, developing countries accounted for 64 percent of global exports of ICT products. 50 As
Xiaobing Tang, a counsellor in the Market Access Division of the WTO, noted, the experiences of
ASEAN (Association of Southeast Asian Nations) countries such as Malaysia and Thailand “show
that the ITA has helped their development and economic growth.” 51 ITA participation benefits
countries in three principal ways, by 1) lowering costs for and thus spurring adoption of
productivity-enhancing ICT, which boosts the productivity, innovative, and competitive capacity
of a country’s enterprises and industries (which further creates new job opportunities); 2)
deepening countries’ participation in GVCs for the production of ICT goods and services; and 3)
bolstering countries’ broader global trade participation.
Deepening Countries’ Participation in ICT GVCs

GVCs represent an increasingly important feature of international trade. In fact, 85 percent of
global trade can now be characterized as occurring with the GVC framework. 52 Keeping ICT
prices low is paramount if countries wish to participate in GVCs for the production of ICT parts,
components, and final products. In contrast, maintaining high ICT tariffs (in part, by not joining
the ITA) harms both countries’ ICT-producing and ICT-consuming sectors. 53 In particular, failure
to join the ITA has caused nations to be left out of global production networks for ICT products
(and services), causing them to miss out on tremendous growth opportunities.
To elaborate, in the 1970s, and with renewed interest over the past 15 years, countries such as
Argentina, Brazil, and India have experimented with import substitution industrialization (ISI)
policies that impose high tariffs (among other trade barriers) on imported ICT products in an
effort to spur development of their own nascent ICT-producing industries. Yet, in the interest of
favoring one sector (ICT producers) these policies have had the unintended effect of harming the
entire economy, as enterprises (large and small alike) in other industries—from finance and
education to hospitality, health, and retail—are forced to use fewer, inferior, or more-expensive
ICT products, thus hampering their own productivity, innovation potential, and global
competitiveness. What’s worse, high tariffs have proven largely ineffective at achieving these
countries’ aim of spurring the development of indigenous ICT-producing sectors. By being
shielded from best-of-breed international competitors, domestic firms lack a vital impetus for
innovation that competition engenders. For instance, small business owners in Argentina have
complained about the country’s high ICT tariffs, noting that “the lack of competition gives
manufacturers an incentive to produce low-quality products and charge high prices.” 54
Further, high ICT tariffs have precluded many ICT-producing enterprises from effectively
participating in GVCs for the production of ICT products. Because of the interlinkage of global
supply chains, manufacturers scour the globe searching for the highest-quality and most cost-
competitive production locations. This means global production networks consist of highly
fragmented but specialized units of production, predicated on countries being open to trade. To
illustrate, in 1962, intermediate goods accounted for 30 percent of total trade within the same
industry globally—a percentage that doubled to 60 percent by 2006. 55 (A 2020 United Nations

Conference on Trade and Development (UNCTAD) report estimates that intermediate products
represented approximately half of world trade in goods, just under $8 trillion, in 2019). 56
Failure to join the ITA has caused nations to be left out of global production networks for ICT products,
causing them to miss out on tremendous growth opportunities.
Put simply, countries imposing high tariffs on ICT parts and products only make themselves
unattractive to multinational enterprises wishing to seamlessly integrate into global production
chains. This explains why the OECD has found that countries not participating in the ITA saw
their participation in global ICT value chains decline by more than 60 percent from 1995 (two
years before the ITA went into effect) to 2009. (See Figure 4.) 57 Similarly, the OECD provides
data on countries’ participation in ICT GVCs (considering their forward and backward
participation rates in those value chains), and the evidence clearly shows that, from 2005 to
2015, ITA-member nations enjoyed nearly one-third greater participation in ICT GVCs than did
non-ITA-member nations. (See figure 5.)
Figure 4: Participation in global ICT value chains, indexed as a share of gross ICT exports 58
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
1995 2000 2005 2008 2009
ITA Members Non-ITA Members

Figure 5: Participation in global ICT value chains, indexed as a share of gross ICT output 59
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ITA Members Non-ITA Members
Brazil provides a good example: Brazilian innovation in ICT has lagged behind that of the rest of
the world primarily because the country hasn’t been involved in ICT GVCs and has enjoyed
limited market-based technology and skills transfer in the ICT sector. Put simply, if countries
wish to participate in GVCs for ICT products, they have to remove the barriers. As the OECD’s
“Measuring Trade in Value Added” research finds:
The growing fragmentation of production across borders has important policy

implications. It highlights the need for countries wanting to reap the gains from value
chain participation to have open, predictable and transparent trade and investment
regimes as tariffs and other unnecessarily restrictive non-tariff measures impact
foreign suppliers, international investors, and domestic producers. 60
It’s also important to note that it’s not just about producing final goods; countries can derive
significant value added from the production of intermediate inputs. A zero-in/zero-out tariff
environment can help countries attract production for a wide range of goods; and over time, as
countries’ enterprises and their employees develop knowledge, skills, and relationships with
international partners, they can move up the value chain to the production of higher-value-added
goods.
Another benefit of the ITA, for developed and developing nations alike, is that it has furthered
the development of more diversified global supply chains, which can facilitate resilience and
resistance to supply chain shocks. As MGI found in its report, “Risk, resilience, and rebalancing
global supply chains,” that matters, “Changes in the environment and in the global economy are
increasing the frequency and magnitude of shocks. Forty weather disasters in 2019 caused
damages exceeding $1 billion each—and in recent years, the economic toll caused by the most
extreme events has been escalating.” 61 The report estimates that companies today should expect
supply chain disruptions of one to two weeks occurring at least once every two years; two to four

weeks occurring once every 2.8 years; one to two months every 3.7 years; and two months or
more every 4.9 years. By fostering more diversified and resilient global ICT supply chains, the
ITA can help address this challenge.
Countries that don’t participate in open, cross-border flows of ICT products (by imposing high tariffs on
ICT or other restrictive measures such as localization barriers to trade) only end up excising
themselves from GVCs and production networks for ICT products, and services.
But the message is clear: Countries that don’t participate in open, cross-border flows of ICT
products (by imposing high tariffs on ICT or other restrictive measures such as localization
barriers to trade) only end up excising themselves from GVCs and production networks for ICT
products, and services. 62
Boosting Countries’ Exports of ICT Goods and Services

The ITA has helped boost countries’ levels of exports of both ICT goods and services.
For instance, from 1996 to 2008, developing-country ITA exports expanded at an annual rate of
33.6 percent, compared with 7.2 percent for developed countries. 63 And the evidence shows that
countries that have systematically reduced barriers to trade in ICT goods—including by
eliminating tariffs, embracing trade facilitation, and eschewing other nontariff barriers such as
localization requirements—have experienced increased ICT goods exports, both as a share of
their total goods exports and in absolute value terms.
In fact, ICT goods exports as a share of total goods exports are consistently and significantly
higher in ITA-member than in non-ITA-member countries. For instance, ICT goods exports
account for almost 49 percent of the Philippines’ goods exports, 35 percent of Vietnam’s, 32.5
percent of Malaysia’s, 26.5 percent of China’s, 25.8 percent of South Korea’s, and 14 percent of
Thailand’s. In contrast, ICT goods exports account for a much-lower share of goods exports for
non-ITA countries, including for just 7 percent of Pakistan’s exports and less than 1 percent for
Cambodia, South Africa, Brazil, Chile, and Argentina. (See figure 6.) And it’s not that the first six
countries shown in figure 6 are in the ITA because they are strong ICT goods exporters; rather,
they are robust ICT goods exporters in considerable part because they have become members of
the ITA.

Figure 6: ICT goods exports as a share of total goods exports, select ITA and non-ITA members, 2019 64
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Beyond ICT goods exports, a similar story plays out in ICT services. Today, ICT services exports
account for over 40 percent of India’s total services exports, 16.5 percent of the Philippines’, 15
percent of Costa Rica’s, 13 percent of China’s, and 12 percent of Sri Lanka’s. (See figure 7.) In
2020, India’s ICT services sector contributed 8 percent of GDP, a significant increase from the
just 1.2 percent it did in 1998, shortly after India joined the ITA. 65 All these countries have
experienced significant increases in ICT services exports’ share of total services exports since
2000, and part of the dynamic here is that ITA membership helped to lower prices for key ICT
hardware inputs that ICT services enterprises depend on, helping them to innovate and become
more globally competitive.

Figure 7: ICT services exports as a share of total services exports, select countries, 2017 66
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
India Philippines Costa Rica China Sri Lanka Malaysia
2000 2017
Joining the ITA Boosts Countries’ Trade Participation

Two comprehensive econometric studies have analyzed the trade-creation effects of the ITA. For
instance, Bora and Liu analyzed the imports of 217 countries from 1988 to 2003. Because the
ITA took effect during this period, the study includes imports before and after a country entered
the ITA. Their analysis finds that, specific to the average developing nation, joining the ITA
increases overall trade by 13 percent. 67
A more-recent econometric study by Christian Henn and Arevik Gnutzmann-Mkrtchyan evaluates

the economic impact of the ITA by assessing the exports and imports of 234 countries over the
period of 1996 to 2012. The authors found that joining the ITA leads to higher ITA exports on
average, in large part through an increase in importing ITA intermediate goods. They showed the
importance of the ITA in integrating developing countries into GVCs, finding that, on average, ITA
exports increase by 37 percent post ITA implementation. 68
Eliminating tariffs creates a “commitment effect” that sends a signal to firms across all industries that
a country provides a robust environment for both imports and exports.
Henn and Gnutzmann-Mkrtchyan further found that, post ITA-accession, countries that
experience sizable increases in ITA exports also tend to invest strongly in education, policies
favorable toward conducting business, and efficient legal institutions. 69 Importantly, the authors
found that “reducing tariffs to zero may have an additional impact on imports beyond tariff
reduction.” 70 This means fully eliminating tariffs has a tremendously powerful effect—much
more than marginal tariff reductions.
Building on Henn and Gnutzmann-Mkrtchyan’s work, ITIF found corroborating evidence from its
own econometric analysis. Using World Bank time-series data on ICT import profiles, ITIF formed

ordinary least squares (OLS) regression models identifying the statistical relationship between
ITA membership and ICT intensity of imports and exports.
This econometric exercise reviews four regression models: two modeling the original 1996 ITA
membership and two for the 2015 ITA expansion. The dependent variable regressed in the first
two is ICT import intensity, measured as a nation’s ICT imports as a share of total goods
imported. The dependent variable in the latter two is ICT export intensity, measured as a nation’s
ICT exports as a share of total goods exported. All models include the control covariates of GDP
per capita and fixed effects for country and year. This combination of controls helps best isolate
the actual impact ITA membership places on ICT trade intensity. 71 Equations 1 through 4 in
appendix D detail the full model equations estimated by each OLS regression. Table 2 details the
coefficients estimated by each model.
Table 2: Regression results for ICT import intensity 72
Dependent Independent Coefficient Standard Number of Base

Pr(>|t|) R-Squared
Variable Variable Estimate Error Observations Year
ICT_Import_pct ITA-1_Member 5.44 1.13e-08 0.95 3184 0.816 1997
ICT_Import_pct ITA-2_Member 7.21 2.05e-11 1.05 607 0.970 2016
ICT_Export_pct ITA-1_Member 11.73 2e-16 1.381 3054 0.819 1997
ICT_Export_pct ITA-2_Member 3.06 0.0466 1.534 594 0.973 2016
Assessing the regression table, both binary variables (denoting membership of ITA-1 and ITA-2)
are statistically significant above the 99 percent confidence level and are positively associated
with ICT import intensity. They are both also statistically significant above the 95 percent
confidence level and positively associated with ICT export intensity.
Interpreting coefficient estimates for ITA-1_Member and ITA_E-Member yields four clear
findings.
Following 1996 and controlling for GDP per capita and fixed effects for country and year:
1. ITA-1 member-countries were on average 5.4 percent more ICT import-intensive than
countries not in the ITA-1.
2. ITA-1 member-countries were on average 11.7 percent more ICT export-intensive than
Likewise, following 2015 and controlling for GDP per capita and fixed effects for country and
year:
3. ITA-2 member-countries were on average 7.2 percent more ICT import-intensive than
4. ITA-2 member-countries were on average 3.1 percent more ICT export-intensive than
ICT import intensity expectedly improves with ITA membership because of the reasons detailed
in this report. Eliminating tariffs on ITA products incentivizes increased imports of ITA goods due
to a de facto price cut, stimulating demand. This growth in ITA imports raises the share of a

nation’s ICT or ICT-related product imports. Countries’ ICT exports rise alongside ITA
membership because global ICT markets grow through higher demand of ITA-covered products
due to ITA accession. Regression modeling estimates a higher percentage increase in ICT import
intensity associated with ITA-2 membership than ITA-1 membership, likely because the 2015
expansion eliminated tariffs on more products than the original ITA did. On the other hand,
regression analysis shows ICT export intensity rose more with ITA-1 membership than with ITA-2
membership, likely due to the fact that ITA-1 included many more final goods than ITA-2, which
would grow global demand for products more than the ITA’s discounting of intermediate goods.
ITIF’s econometric findings support the relationship between ITA membership and growth in ICT
imports and exports, which grow a nation’s ICT capital stock and GVC participation as a direct
result. By confirming this first essential link between ITA membership and ICT trade intensity,
growth-revenue estimates per country based on the proposed ITA-3 carry greater accuracy and
identify benefits uniquely impactful to developing countries.
ITA-1 member countries were on average 5.4 percent more ICT import intensive than countries not in
the ITA-1, while ITA-2 member countries were on average 7.2 percent more import intensive than
In summary, the empirical results are quite clear: After eliminating tariffs on ITA products,
countries—developed and developing alike—experience a decrease in ICT prices for consumers
and producers, adopt ICT products more readily, integrate domestic ICT industries into global
ICT value chains more seamlessly, and expand exports of ITA products. In other words, the
econometric studies completed to date show that ITA membership delivers considerable benefits
to member countries, something further borne out in the analysis presented in the economic
analysis section of this report.
THE LOGIC FOR BRINGING ADDITIONAL ICT GOODS UNDER ITA-3 COVERAGE
An ITA-3 would bring a number of emerging (as well as more-modern versions of existing)
technologies driving the global digital economy under ITA-coverage. As noted, an ITA-3 would
include goods such as next-generation semiconductors, energy-efficient technologies such as
storage batteries and LED “light sources,” digital manufacturing technologies such as industrial
robots and 3D printers, certain medical technologies such as photographic X-ray plates, and
some unmanned aerial vehicles (UAVs), among other products. The following section explores the
logic of why several of these specific product categories merit ITA coverage, focusing especially
on semiconductors, digital (or “smart”) manufacturing technologies, energy-efficiency
technologies, drones, medical devices, and flat panel displays.
Semiconductors, Semiconductor Manufacturing Equipment, and Related Components

To be sure, semiconductors have been included as ITA products since the original agreement.
But semiconductors continue to evolve, which is one reason why multicomponent
semiconductors—a single semiconductor device that performs complex or multiple functions
previously performed by two or more semiconductor devices, thanks to a variety of components
integrated into a single unit—were an important part of the ITA-2 agreement. 73 Similarly, an ITA-
3 would ensure that the latest next-generation semiconductor technologies, such as
semiconductor-based transducers, are part of the agreement. The proposed ITA-3 would also

bring a litany of products and materials involved in the manufacture of semiconductors under
ITA coverage. These include for instance:
▪ Materials for manufacturing printed circuits (HS 3921.90)

▪ Cleanroom equipment (i.e., high-performance air filters/purifiers) (HS 8421.39)
▪ Injection and compression molds for the manufacture of semiconductor devices
(HS 8480.71)
▪ Machine tools operated by lasers/photobeam (HS 8456.10) or ultrasonic processes
(HS 8456.20)
▪ Circular polishing pads for the manufacture of semiconductor wafers (HS 3919.90)
ITA membership helped to lower prices for key ICT hardware inputs ICT services enterprises depend
on, helping them to innovate and become more globally competitive.
Ensuring inclusion of the vast majority of inputs that comprise semiconductor manufacturing
equipment—the machines that make the actual semiconductors—matters because
semiconductors are foundational to the modern global economy. Semiconductors underpin
everything from AI systems, cloud computing, and the Internet of Things to advanced wireless
networks, smart grids, smart buildings, smart cities, digital healthcare devices, and even the next
generation of quantum computing. 74 Moreover, semiconductors lie not only at the heart of every
piece of ICT equipment—from desktop or laptop computers to tablets, servers, and
smartphones—but to an increasingly wide variety of consumer goods from automobiles to home
appliances to fitness monitors, something vividly illustrated by the global semiconductor shortage
that hit in the wake of the COVID-19 pandemic. 75 The semiconductor sector itself represents a
$470 billion highly globalized industry that helps create $7 trillion in global economic activity
and is directly responsible for $2.7 trillion in total annual global GDP. 76 Broadening the set of
semiconductor production inputs and end products covered by the ITA would help lower
semiconductor prices—and makes perfect sense for the global economy.
Energy-Efficient Technologies
The ITA-3 expansion proposal includes numerous ICT-powered energy-efficiency technologies,
such as:
▪ Storage batteries (HS 8507.20, 8507.30, 8507.40)

▪ Boards/panels, consoles, etc. for the electrical control or the distribution of energy (HS
8537.10, 8537.20)
▪ Solar water heaters (HS 8419.12)
▪ Gas and liquid meters (HS 9028.10, 9028.20)
▪ Light-emitting diode (LED) light sources (HS 8539.50, 8539.51, 8539.52)
Semiconductors not only move bits (1s and 0s), they also help control flows of electricity (i.e.,
power). Whether it comes to a nation’s power grid or the electrical flow within a factory,
computer, smartphone, or even a single LED light bulb, they all rely on microchip systems that
control, measure, and convert electricity. In fact, 80 percent of the energy generated globally

passes through some kind of power electronics. 77 And in the United States, more than half of all
electricity flows through some form of semiconductor-controlled motor. 78
As semiconductors—and thus the devices they power and control—have become more powerful
and more energy efficient, they portend the ability to deliver significant energy efficiencies
across not only a variety of industries but even entire national economies. Indeed, ICT such as
semiconductors represent a powerful technology that enables other sectors of an economy to
become more energy efficient. 79 For instance, a 2009 study by the American Council for an
Energy Efficient Economy (ACEEE) estimates that the United States could realize 1.2 trillion
kilowatt-hours (kWH) in energy savings by accelerating the adoption of semiconductor-enabled
technologies by just 1 percentage point per year. 80 According to ACEEE estimates, that would
translate into 22 percent less electricity consumed than the then-prevailing U.S. Department of
Commerce Reference Case, resulting in 733 million metric tons less carbon dioxide (CO2)
emitted in 2030, as many as 296 energy plants that wouldn’t need to be built to deliver that
power, and $1.3 trillion in cumulative savings from 2010 to 2030. 81 Driving these gains, ACEEE
identified more than two dozen semiconductor-enabled technologies, including commercial and
residential lighting, high-efficiency industrial motors and motor systems, programmable
thermostats, and residential water heaters. 82 Several of these items are now proposed for ITA-3
expansion.
Semiconductors not only move bits (1s and 0s), they also help control flows of electricity (i.e., power).
Semiconductors are driving power efficiencies across a wide range of products, enabling
computing efficiency (the number of computations per kilowatt hours (kWh) of electricity) to
double approximately every 1.6 years, a phenomenon known as “Koomey’s law.” 83 For instance,
data centers can reduce energy demand by 56 percent by using semiconductor-enabled
technologies such as efficient uninterruptible power supplies, variable speed fans and pumps,
and server virtualization. 84 In 2010, data centers consumed 194 terawatt hours (TWh) of
electricity, about 1 percent of global electricity consumption. Since then, the global installed
base of servers has increased by 30 percent; compute instances have increased more than
sixfold; data center Internet protocol traffic has increased by a factor of 11; and data center
storage capacity has experienced a 25-fold increase. 85 However, over this time, greater storage-
drive efficiencies and densities have reduced storage energy use by nearly 90 percent. Overall,
the energy intensity of data centers has decreased about 20 percent annually since 2010. 86
Elsewhere, semiconductors enable solar panels to harvest up to 57 percent of power normally
lost to real-world conditions such as clouds, dirt, and animal interference. 87
Semiconductor-powered sensors, controllers, and meters—several specific types of which are

herein proposed for ITA-3 inclusion—will have a tremendous impact on the energy efficiency of
commercial buildings and residential homes. For instance, one study finds that integrating smart
sensors and controls throughout the commercial building stock has the potential to save as much
as 29 percent of building energy consumption. 88 Smart sensors and controls can enable
buildings to reduce their peak electricity load by 10 to 20 percent, for example, by shifting some
energy services to times of day when energy demand is low. 89 Likewise, smart thermostats that
help households and building managers monitor and regulate heating and cooling can reduce
electricity demand by 15 to 50 percent, depending on the building and control technology. 90

Overall, the U.S. Department of Energy estimated that sensor and control technologies alone
could reduce building energy consumption in the United States by 1.7 quads (~500 billion
kilowatt-hours) by 2030, generating $18 billion in annual energy savings. 91
As semiconductors—and thus the devices they power and control—have become more powerful and
more energy efficient, they portend the ability to deliver significant energy efficiencies across not only
a variety of industries but even entire national economies.
Similarly, the International Energy Agency’s 2017 report, Digitalization & Energy, identifies the
global potential energy savings from smarter energy use in buildings, finding that ICT integration
can reduce annual electricity use by up to 4.65 petawatt hours (PWh), or nearly 25 percent, over
the next two decades with energy savings realized across a range of applications including
lighting, water heating, metering, application of smart thermostats, etc. (See Figure 8.) Given
their potential to save energy, save costs, and help the environment, especially as the world tries
to meet Paris Agreement goals, the energy-efficient technologies identified as candidates for ITA-
3 coverage certainly merit inclusion.
Figure 8: Cumulative energy savings in buildings from widespread digitalization, by energy use (2017–2040) 92
660
640
620 -27.9
Petawatt Hours (PWh)
-7.5
-4.4
600 -7.9
-6.9
-9.6
580
560
Buildings Space Space Water Lighting Appliances Other Smart Space

(business Heating Cooling Heating Buildings Cooling
as usual)
540
Smart Manufacturing Technologies

Smart manufacturing—the application of ICT (such as industrial robots, 3D printers, the Internet
of Things, AI, big data, etc.) to every facet of modern manufacturing—is in the midst of
transforming how products are designed, fabricated, used, operated, and serviced post sale, just

as it’s transforming the operations, processes, and energy footprint of factories and the
management of manufacturing supply chains. 93 MGI estimated that this advent of manufacturing
digitalization may increase global manufacturing productivity by 10 to 25 percent, with the
potential to create as much as $1.8 trillion in new value per year across the world’s factories by
2025. 94 This concords reasonably well with a General Electric report, “Industrial Internet:
Pushing the Boundaries of Minds and Machines,” that estimates the Industrial Internet could
boost annual U.S. productivity growth by 1 to 1.5 percentage points and add $10 trillion to $15
trillion to global GDP over the next 20 years. 95 The ITA would promote global manufacturing
digitalization by bringing more products, such as industrial robots and 3D printers, under ITA
coverage. Adding up global imports in 2020 for both the components and end products
representing industrial robots and 3D printers that are proposed for ITA-3 inclusion shows the
total import value for such products exceeds $70 billion. 96
Industrial Robotics
Industrial robots will be a key driver of this transformation. There are currently 2.7 million
industrial robots operating across the world’s factories. That number increased 85 percent from
2014 to 2019. 97 China leads the world in annual installation of industrial robots, introducing
some 140,000 new units each year, compared with 50,000 in Japan, 33,300 in the United
States, 28,000 in South Korea, and 20,500 in Germany. 98 The global industrial robot
marketplace was valued at $14.6 billion in 2020 and is expected to grow to $31.1 billion by
2028 at a compound annual growth rate (CAGR) of 10.4 percent. 99
The ITA would promote global manufacturing digitalization by bringing more products, such as
industrial robots and 3D printers, under ITA coverage.
Robots improve productivity when applied to tasks wherein they can reduce error and execute
tasks at high levels of efficiency and consistency. In this way, robots help produce goods more
economically, expanding the range of global access to a wide variety of manufactured goods—
from automobiles to refrigerators to smartphones—and thus have played an instrumental role in
enhancing global standards of living and driving global economic growth more broadly. 100 Their
impact has been enormous. Georg Graetz and Guy Michaels of the Centre for Economic
Performance concluded that robot densification increased annual growth of GDP and labor
productivity between 1993 and 2007 by about 0.37 and 0.36 percentage points, respectively,
across 17 countries studied. 101 Their study finds that robots accounted for 10 percent of GDP
growth in studied countries, and productivity in robot-enabled industries in these countries
increased by 13.6 percent. 102 As the authors concluded, “For the industries in our sample, robot
adoption may indeed have been the main driver of labor productivity growth.” 103 They also found
that robot densification is associated with increases in both TFP and wages, and reductions in
output prices. 104 To put the power of industrial robots in context, Graetz and Michaels estimated
that industrial robots exerted a greater economic impact over that 14-year study period than did
the steam engine from 1850 to 1910, a harbinger of the impact the newest generation of far
more capable industrial robots—and indeed digital manufacturing technologies more broadly—
may have in the future. 105 To that end, MGI has predicted that up to half of the total productivity
growth needed to ensure a 2.8 percent growth in global GDP over the next 50 years will need to
be driven by automation. 106 And in that regard, the Boston Consulting Group has forecasted
productivity improvements of 30 percent over the next 10 years, spurred particularly by the

uptake of robots in small to medium-sized enterprises as robots become more affordable, more
adaptable and easier to program. 107
In other words, the competitiveness of a nation’s manufacturing enterprises—both large and

small—will increasingly hinge on their ability to deploy and leverage industrial robots. And, if
industrial robots are included in an ITA-3, then countries joining such an agreement will be at an
advantage because eliminating tariffs on these productivity-enhancing goods will lower their
prices and put domestic manufacturers at a competitive advantage. Industrial robots represent
an obvious choice for ITA-3 inclusion.
3D Printing
Additive manufacturing, or 3D printing, refers to a manufacturing process in which successive
layers of material are built up to synthesize a three-dimensional solid object composed in a
digital file, with each layer a thinly sliced horizontal cross-section of the eventual object. 108 3D
printing enables fundamentally new shapes and even mechanical linkages that simply can’t be
achieved through traditional subtractive manufacturing techniques, while offering many
applications for improving speed and efficiency, reducing errors, and eliminating as much as 70
percent of waste generated from traditional subtractive manufacturing processes. 109
3D printing played an important role in responding to the COVID-19 pandemic. For instance, HP,
a maker of 3D printers, established a Digital Manufacturing Network leveraged by 55 companies
across 30 U.S. states that established a weekly U.S. capacity of 75,000 reusable face shields,
10,000 face masks, and 1.8 million nasal swabs. 110 Based on data collected from America
Makes—one of America’s 16 Manufacturing USA Network Institutes of Manufacturing
Innovation, focused on additive manufacturing—from February 15 to July 15, 2020, alone, an
estimated 38 million face-shield parts, 12 million nasal swabs, 2.5 million ear savers, 241,000
mask parts, and 116,000 ventilator parts were additively manufactured in the United States. 111
Countries joining an ITA-3 expansion would give their domestic manufacturing enterprises a
competitive advantage by reducing the prices of capital goods such as industrial robots and 3D
printers that powerfully drive industrial productivity.
The current $12.6 billion global marketplace for 3D printers is expected to grow to $62.8 billion
by 2028, at a 21 percent CAGR. 112 Especially as 3D printing becomes cost competitive across a
range of materials—from plastic to metals such as titanium—it heralds the potential to transform
manufacturing by “democratizing it” (i.e., making it more globally achievable), enabling the
production of goods closer to final markets, and permitting mass customization (i.e., production
lot sizes of one, as opposed to one million). A recent report from ING Bank estimates that the
rise of 3D printing could see the share of 3D printed goods in global manufacturing rise to 5
percent over the next two decades—a significant increase from the current share of 0.1
percent—and that the greater extent of manufacturing closer to final consumption would at most
decrease global trade flows by a modest rate of 0.2 percentage points less trade growth per
year. 113 A growing market for 3D printing therefore would bring positive economic benefits to
importing countries but would not impose a disincentive to trade flows at large. Moreover, digital
manufacturing technologies such as 3D printing could actually cause international trade flows to
increase by enabling the creation of new and innovative products for export. For instance, a

2019 study by the World Bank’s Caroline Freund, Alen Mulabdic, and Michele Ruta finds that
the use of 3D printing in the hearing aid industry increased trade in that field by 58 percent over
nearly a decade compared with what would otherwise have been expected.
As with industrial robots, 3D printers represent a device ripe for ITA-3 inclusion, and the
manufacturers that have access to the lowest-cost, most-innovative 3D printers will find
themselves at a competitive advantage.
Drones for Commercial and Personal Use

The global UAV marketplace stands at $27.4 billion and is projected to reach $58.4 billion by
2026, at a 16.4 percent CAGR. But far from being playful toys, drones represent a productivity-
enhancing tool that is already delivering beneficial impacts across a range of industries, from
agriculture to energy to medicine.
The United Nations Food and Agricultural Organization has projected that global food production
will need to increase by 70 percent by 2050 to meet the world's food needs. 114 Precision
agriculture leverages a variety of ICT including GPS-enabled UAVs, Internet of Things, AI, and
big data to enable targeted interventions designed to enhance agricultural output and quality. 115
Indeed, UAVs are increasingly enabling a sustainable agriculture-management approach that
allows agronomists, agricultural engineers, and farmers to help streamline their operations, using
robust data analytics to gain effective insights into their crops. For instance, drones can facilitate
the monitoring of large areas of farmland, considering factors such as slope and elevation, for
instance, to identify the most suitable seeding prescriptions or to identify regions where irrigation
needs to be provided, fertilizer applied, or crops pruned. 116 Drones are much more efficient and
cheaper than the satellites or manned aircraft traditionally used to monitor agriculture, and can
produce high-quality imagery over a wide expanse of terrain more safely, efficiently, and
regularly. As such, analysts expect the agriculture drone market alone to reach $32.4 billion by
2025, indicating a growing global technology platform ripe for ITA inclusion.
Drones have also proven instrumental in the real-time delivery of urgent medical supplies. In
October 2016, the start-up Zipline partnered with the Rwandan government to facilitate the real-
time delivery of urgent medical supplies, such as blood and vaccines, to patients in remote
locations via drones (named “Zips”). 117 The Zips, which have a 75-kilometer service radius and
can carry 1.5 kilograms of payload per sortie and operate in most weather conditions, seamlessly
fly over treacherous terrain in as little as 30 minutes—a trip that traditionally took as much as
four hours to cover in a vehicle. 118 By May 2017, Zipline averaged over 20 weekly deliveries,
providing near-real-time access to life-saving medical supplies for over 8 million Rwandans, or
nearly two-thirds of the country’s total population of 12 million. 119
Drones also played an important role in combatting COVID-19. In 2020, Zipline partnered with a
North Carolina hospital to become the first emergency drone logistics operation to help U.S.
hospitals respond to the pandemic. 120 Elsewhere, America’s United Parcel Service teamed up
with the CVS drugstores to begin delivery of prescription medicine via Matternet’s M2 drones to
Florida residents. 121 Similarly, the Alphabet subsidiary Wing and Nevada-based start-up Flirtey
are working to pioneer drone delivery of groceries and household goods, with customer demand
for the service increasing 350 percent during the pandemic. 122 A June 2021 GlobeNewswire
report noted that “rising demand for contactless deliveries of medical supplies and other
essentials using drones owing to COVID-19 are some of the factors driving the growth of the UAV

market [in 2020].” 123 Drones are playing increasingly important roles in ensuring individuals’
health, improving quality of life, and enhancing the productivity and innovation capacity of a
wide variety of industries, and therefore certainly merit ITA-3 inclusion.
Medical Technologies
Medical devices play critical roles in healthcare, from devices that directly protect patient health
(e.g., implantable cardiac devices) to those that facilitate diagnosis (e.g., magnetic resonance
imaging (MRI) machines) to remote patient monitoring devices (e.g., fall monitors) or ones that
improve quality of life (e.g., personal fitness trackers). Medical devices contribute to improved
quality of life, to a greater ability to productively work, and to longer lives, all of which contribute
to nations’ economic growth. For instance, economists Kevin Murphy and Robert Topel estimated
that increases in life expectancy between 1970 and 1990 contributed $57 trillion, or $2.8
trillion per year, to the U.S. economy, with the average additional year of life estimated to be
worth $150,000 per person (although this varies with age). 124 Moreover, in the United States,
123F
advanced medical technology helped reduce the number of days spent in hospitals by 59 percent
from 1980 to 2010, and the use of key medical technologies in four disease areas alone
(diabetes, colorectal cancer, musculoskeletal disease, and cardiovascular disease) expanded U.S.
GDP by $106.2 billion, providing a net annual benefit of $23.6 billion to the economy due to
better treatment, reduced disability, and increased productivity. 125 No doubt, nations around the
124F
world similarly realize both patient health and broader economic benefits from the greater
availability and cost efficiency of medical devices.
The 2016 ITA-2 introduced for the first time a variety of medical devices, including MRI
machines and computed tomography (CT) scanners, into ITA coverage. 126 The ITA-3 expansion
again proposes widening the range of medical devices and equipment receiving coverage,
including, among others:
▪ Microfluidics (HS 8479.79 and 9027.80); and

▪ Photographic plates for X-rays (HS 3701.10).
These items should be included in an ITA-3. Moreover, with the world still reeling from the
COVID-19 pandemic, nations should be considering doing all they can to reduce the costs of
medical goods and equipment—and by bringing those with heavy ICT components under ITA
coverage, they can further such aims.
ANALYZING THE ECONOMIC IMPACTS OF A PROPOSED ITA-3 EXPANSION

For most countries that have joined it, ITA participation has succeeded in fostering ICT-driven
economic growth. ICT boosts productivity, supports innovations, and expands access to digital
services that improve quality of life. Since less-economically developed nations may suffer a
shortfall in their stock of ICT capital and ability to produce such goods domestically, an effective
way to grow their ICT capital stock is by joining the ITA. As noted, this report examines the
economic impact of 14 countries—Brazil, China, Costa Rica, Indonesia, Japan, Kenya, Malaysia,
Nigeria, Pakistan, South Korea, Taiwan, Thailand, the United States, and Vietnam—joining the
ITA-3. (A subsequent section of this report will examine the economic impact for countries not in
the ITA-1 or ITA-2 joining the ITA all the way through the first two agreements as well as this
proposed ITA-3.) ITIF selected these countries both because they are among the most important
in ICT goods production and trade and because they provide a sample set of large and small

economies to model impacts of the proposed ITA-3 expansion. This section proceeds by briefly
describing the economic framework and methodology used in the analysis, applying the model
in order to estimate the anticipated 1-year and 10-year economic impacts of full ITA accession
for study countries, and then assessing the impact ITA accession would likely have on
government income.
Summary Explanation of Methodology and Data Sources

Data for calculating trade in ITA goods comes from the UN Comtrade Database. International
trade accounts for products using HS2017 codes detailing imports with the specificity of six
digits to categorize items. A six-digit code, however, still encompasses multiple items. Many
countries, including the United States, distinguish product codes based on the HS categorization
beyond six digits. The United States maintains HS codes at the eight-digit level, allowing ITIF to
approximate the percentage of products within an HS6 code incorporated into the proposed ITA-
3 expansion. Applied tariff rates at the six-digit level per country for each trading partner are
available via the World Bank’s World Integrated Trade Solution (WITS) database. By multiplying
the corresponding effective tariff rates (while accounting for Most Favored Nation and preference
agreements) with a given country’s import value data (excluding reimports) for the 251 proposed
HS6 codes comprising the proposed ITA-3, ITIF calculated a country’s average effective applied
tariff rate on ITA-3 goods by dividing the sum of effective ITA-3 tariff revenue by the sum of ITA-
3 total import value. This average tariff rate under the ITA-3 expansion would be reduced to zero
for participating countries. The removal of tariffs on ITA-3 products would effectively function as
a price cut on ICT products to the benefit of domestic consumers (organizations and individuals
alike) that can then afford more ICT at a reduced price.
Moreover, economists have found that demand for ICT products is price elastic, whereby ICT
consumption rises by a factor greater than its price reduction. ITIF’s model for estimating the
economic impacts of ITA-3 accession uses a price elasticity of 1.3 for ICT products based on
research findings pioneered by Cette et al. in 2012. 127 A country’s imports, however, could be
inhibited in part by domestic producers’ ability to respond competitively by lowering costs and
maintaining an advantage against imports when tariffs are eliminated. ITIF opted for this
estimate regarding the price elasticity of ICT imports because it was estimated controlling for a
substitution effect on imports that comes from competing domestic firms after ITA accession.
This resulting price elasticity for ICT demand allows one to estimate the annual growth in imports
of ICT goods anticipated by eliminating tariffs on ITA-3 products, whereby a 1.0 percent
decrease in ICT price (via removed tariffs) induces a 1.3 percent increase in consumption of
those goods, with this heightened consumption further increasing the extent of a country’s ICT
capital stock.
Economists have found that demand for ICT products is price elastic, with a 1 percent decrease in ICT
price inducing on average a 1.3 percent increase in consumption of ICT products.
Over time, increased ICT consumption and the resulting growth in a nation’s ICT capital stock
creates widespread positive externalities. A proliferation of ICT allows workers to provide services
more efficiently and businesses to innovate their products and operations, thus raising overall
productivity and economic growth. Leveraging Cardona et al.’s research, ITIF applied the growth
factor suggesting that a 1 percent increase in a nation’s net ICT capital stock generates a 0.06

percent increase in a nation’s real GDP. 128 Multiplying a country’s estimated annual net growth
in ICT capital stock by this growth factor provides an estimate of the potential GDP growth from
extending ITA coverage onto proposed ITA-3 products. ITIF computed 10-year average growth
rates for real GDP and imports specific to each country. Yearly net ICT capital stock and GDP
growth estimates enable forecasting of the total cumulative GDP growth a nation may experience
over 10 years due to joining the proposed ITA-3 expansion. The following flowchart summarizes
the analytical framework ITIF’s model uses to estimate the economic impacts of ITA-3 on the
study countries. (See figure 9.)
Figure 9: ITIF’s analytical framework for modeling the benefits of ITA accession
As the model illustrates, while tax revenues fall in the short run (e.g., one year post ITA-3
accession) due to tariffs on products that would come under ITA coverage reducing to zero,
additional tax revenue is recovered in the long run (e.g., 10 years post ITA-3 accession) through
standard means of taxation as economies grow. A growing economy means businesses increase
revenues and workers earn higher incomes (thus consuming more goods and services), a dynamic
that helps countries’ recover some, if not all, tariff revenues initially lost due to joining the ITA.
Modeling the Economic Impacts of ITA-3 Accession

ICT Import Profile of Countries
Despite global digitalization trends, many countries still vary widely in their ICT import profile.
Using the common base year for available import data of 2019, ITIF calculated the total value of
ITA-3 imports per country. Table 3 provides the ICT import profile of each country, showing the
full value of ITA-3 imports per country as well as total tariff revenue raised from ITA-3 imports,
alongside officially reported trade statistics to control for any unobservable inconsistencies
between model and official reporting of import findings.

Table 3: ICT import profile for ITA-3 products 129
Average
ITA-3 Total Sum of Official Sum of
Total Sum of Total Sum of Effective
Share of ITA-3 Tariff Tariff Revenue
Country ITA-3 Imports All Imports Applied Tariff
Total Revenue (U.S. Across All Imports
(U.S. Millions) (U.S. Millions) Rate on ITA-3
Imports Millions) (U.S. Millions)
Imports
Brazil $15,394 $177,348 8.68% $1,697 $10,857 6.12%
China $193,142 $2,068,950 9.34% $5,680 $41,820 2.02%
Costa Rica $1,589 $16,106 9.86% $11 $281 1.75%
Indonesia $16,828 $171,276 9.82% $134 $2,655 1.55%
Japan $70,630 $720,895 9.80% $274 $9,106 1.26%
Kenya $893 $17,210 5.19% $76 $1,390 8.07%
Malaysia $16,287 $204,906 7.95% $120 $660 0.74%
Nigeria $5,602 $47,369 11.83% $381 $2,729 5.76%
Pakistan $2,500 $50,063 4.99% $276 $6,292 12.57%
South Korea $51,842 $503,263 10.30% $1,018 $6,538 1.30%
Taiwan $24,871 $285,906 8.70% $370 $9,183 3.21%
Thailand $21,064 $240,139 8.77% $442 $3,151 2.10%
United States $291,952 $2,567,492 11.37% $7,683 $78,162 3.04%
Vietnam $39,847 $253,442 15.72% $246 $4,294 1.69%
Economic Impact of the Elimination of ITA-3 Tariffs

By confirming our estimates against total officially reported tariff revenues in the OECD’s Global
Revenue Statistics (GRS) Database, ITIF calculated the average effective applied tariff rate on
ITA-3 imports for study countries. Of the 14 countries, Pakistan maintained the highest average
effective tariff rate applied to ITA-3 goods at 12.6 percent. Kenya followed Pakistan at 8.1
percent, with Brazil next at 6.1 percent, and Nigeria at 5.8 percent. (See table 4.) Many
nations—such as Costa Rica, Indonesia, Malaysia, South Korea, Taiwan, Thailand, and
Vietnam—have substantially high ITA-3 shares of total imports but maintain low average tariff
rates, near or below 3 percent. These nations seek to capitalize on a steady inflow of ICT imports
with low average tariffs on those products to produce some revenue without heavily distorting
sensitive technology markets that comprise ICT trade. But this still fails to maximize the total
economic benefits to be gained from importing ICT. This tariff rate is indicative of the
corresponding price decrease ITA-3 products would effectively enjoy when imported under the
proposed ITA-3 expansion. If signatories set tariff rates to zero under ITA coverage, eliminating
such tariffs would increase consumption of ITA-3 imports even further due to the high price
elasticity of ICT.

Table 4: Impact of tariff elimination on ITA-3 product imports 130
Average Effective Increase in Growth in Total
Increase in
Country Applied Tariff Rate on ITA-3 Imports Imports Post ITA-3
ITA-3 Imports
ITA-3 Imports (U.S. Millions) Accession
Brazil 6.12% 7.96% $1,225 0.69%
China 2.02% 2.63% $5,075 0.25%
Costa Rica 1.75% 2.27% $36 0.22%
Indonesia 1.55% 2.02% $339 0.20%
Japan 1.26% 1.64% $1,160 0.16%
Kenya 8.07% 10.50% $94 0.54%
Malaysia 0.74% 0.96% $156 0.08%
Nigeria 5.76% 7.49% $420 0.89%
Pakistan 12.57% 16.34% $408 0.82%
South Korea 1.30% 1.69% $876 0.17%
Taiwan 3.21% 4.18% $1,038 0.36%
Thailand 2.10% 2.73% $575 0.24%
United States 3.04% 3.96% $11,554 0.45%
Vietnam 1.69% 2.20% $878 0.35%
Based on the price elasticity of 1.3 for ICT goods demanded, ITIF estimated an expansion of ITA-
3 imports of between 1 and 16.3 percent among countries sampled, dependent on those
countries’ current tariff rates. (See table 4.) Pakistan, the nation with the highest applied tariff
rate on ITA-3 imports (12.6 percent), could expect a 16.3 percent increase in ITA-3 imports.
Conversely, Malaysia would expect a 1 percent increase in ITA-3 imports, given it has the lowest
average applied tariff rate on ITA-3 imports (0.74 percent).
While eight countries—the majority in the study—would expect an increase of ITA-3 imports less
than 3 percent, a few percentage points increase in ITA imports swiftly grows those nations’
stocks of ICT capital. In one year following ITA-3 accession, all countries’ net ICT capital stock
would grow between 0.36 and 6 percent due to increased ITA imports. (See table 5.) Using an
unweighted average derived from depreciation rates from the Conference Board, ITIF estimated
an average depreciation rate of ICT capital of 32.8 percent. 131 This expansion in ICT capital
stock occurs even with the high rate of depreciation common to ICT. Since this model ties ICT
capital stock growth to increased ICT consumption due to eliminating tariffs, countries expecting
the highest net growth in ICT capital stock are the same nations with the highest average
effective applied tariff rates. Table 5 provides details regarding each country’s expected growth
in ICT capital stock in one year from joining the ITA-3. Pakistan, for example, would experience
the highest growth in ICT capital stock at 6 percent, since its tariff rate is the highest in the set.
Conversely, with the lowest average tariff rate on ICT, Malaysia would have the lowest growth in
ICT capital stock at 0.36 percent.

Table 5: Nations’ ICT capital stock growth from joining an ITA-3 132
Current ICT Capital ITA-3 Attributable Contribution to ICT Percent of ITA-3 Attributable
Country
Stock (U.S. Millions) Capital Stock (U.S. Millions) Growth in ICT Capital Stock
Brazil $45,559 $1,225 2.69%
China $482,020 $5,075 1.05%
Costa Rica $4,409 $36 0.82%
Indonesia $44,498 $339 0.76%
Japan $209,674 $1,160 0.55%
Kenya $2,336 $94 4.01%
Malaysia $43,166 $156 0.36%
Nigeria $15,540 $420 2.70%
Pakistan $6,831 $408 5.98%
South Korea $145,165 $876 0.60%
Taiwan $69,079 $1,038 1.50%
Thailand $58,464 $575 0.98%
United States $841,338 $11,554 1.37%
Vietnam $102,935 $878 0.85%
ICT Capital Stock and Economic Growth

This report’s model for calculating ITA-spurred growth closely follows the methodology developed
in ITIF’s 2017 report, “How Joining the Information Technology Agreement Spurs Growth in
Developing Nations,” which was ultimately based on modeling best practices from Bora et al. in
2010 and Henn et al. in 2015. 133 However, the growth-revenue estimation model employed in
this paper brings nuance to the literature by providing more-precise estimates of ITA imports
traded between countries using HS6 adjustment factors. The model accounts solely for
consumption and capital imports to exclude any reimports that would distort growth estimates
and calculates adjustment factors as the share of eight/ten-digit codes within a single six-digit
code covered under ITA-3 treatment via UN Comtrade data. These adjustment factors serve as
proxies applied to other countries to account for the share of goods traded within a six-digit code
to be fully covered by the proposed ITA-3 expansion.
Following the expansion of a nation’s ICT capital stock, ITIF’s model connects it to other
countries’ economic growth. As noted, several papers document this linkage. Niebel found that,
on average, a 1 percent increase in ICT capital stock is associated with 0.05 to 0.09 percent
GDP growth in a given year, regardless of a country’s level of economic development. 134 Cardona
et al. found, after extensive review of econometric literature covering the statistical relationship
between ICT capital stock and economic growth, that a 1 percent increase in ICT capital stock
associates with a 0.06 percent increase in GDP growth. 135 Here, ITIF defaulted to a conservative
estimate of 0.06 percent both to intentionally prevent overstating findings and to maintain
consistency with prior ITIF studies modeling economic impacts of countries’ ITA accession. Due
to this conservative growth factor, GDP growth estimated from ITA-3 accession is likely even
higher than reflected here.

Table 6 provides GDP growth estimates in the first year following ITA-3 accession. Again, this
methodology finds that countries with the highest tariffs imposed on ITA-3 goods stand to gain
the most. Pakistan, Kenya, Nigeria, and Brazil are the countries that could anticipate the
greatest economic growth in a given year as a result of ITA-3 accession. By reducing its average
effective tariff rate of 12.6 percent applied to ITA-3 goods to zero, Pakistan could expect an
estimated 0.36 percent GDP growth just one year after an ITA-3 accession. Kenya would expect
a 0.24 percent increase in GDP growth in the first year after eliminating its 8.1 percent average
ITA-3 tariff rate. Nigeria and Brazil, imposing very similar average effective tariff rates on ITA-3
goods, could both expect a 0.16 percent increase in GDP a year after having accepted the
ITA-3 proposal.
All study countries could experience notable annual GDP growth from joining an ITA-3, with Pakistan,
Kenya, Nigeria, and Brazil potentially the most-significant beneficiaries.
All study countries could experience notable annual GDP growth from joining an ITA-3. Even the
lowest-tariff-imposing country, Malaysia, still experiences a 0.02 percent growth in GDP in the
first year of joining. While 0.02 percent may sound negligible, the additional GDP growth
attributable to ITA-3 accession after 10 years would be undeniable.
Table 6: Projected one-year economic growth resulting from ITA-3 accession
Country Annual Real GDP Growth ITA-3 Attributable GDP Growth (Year One)
Brazil 1.39% 0.16%

China 7.67% 0.06%
Costa Rica 3.63% 0.05%
Indonesia 5.42% 0.05%
Japan 1.29% 0.03%
Kenya 5.84% 0.24%
Malaysia 5.33% 0.02%
Nigeria 3.65% 0.16%
Pakistan 4.19% 0.36%
South Korea 3.31% 0.04%
Taiwan 3.60% 0.09%
Thailand 3.63% 0.06%
United States 2.30% 0.08%
Vietnam 6.31% 0.05%
Table 7 details the long-term economic growth countries could enjoy as a result of ITA-3
expansion. Even though it would have the lowest percentage growth rate, ITA-3 accession could
still add nearly $1.3 billion to Malaysia’s economy over 10 years. Beyond the example of the
minimum-tariff country, Japan and South Korea could expect 10-year cumulative growth of 0.34
and 0.36 percent, respectively. The remaining 11 countries would expect near or above a 0.5
percent increase in GDP attributable to ITA-3 expansion. The countries poised to realize the
greatest GDP growth (as a share of their original 2019 GDP) by joining the ITA-3 are Pakistan,

Kenya, Brazil, and Nigeria. Over 10 years, as noted, Pakistan’s economy could cumulatively grow
by 3.2 percent, Kenya’s by 2.15 percent, and Brazil and Nigeria each by about 1.6 percent. In
absolute terms, the top four highest-growing economies due to ITA-3 accession (in order) are the
United States, China, Brazil, and Japan, simply due to their already far-higher GDP and
populations than other (largely developing) nations in the study.
Table 7: Projected long-run economic growth benefits from joining an ITA-3
Cumulative 10-Year Cumulative 10-Year

GDP (2019, U.S. Average Annual GDP Growth GDP Growth Attributable
Country
Billions) Real GDP Growth Attributable to ITA-3 to ITA-3 Expansion
Expansion (%) (U.S. Billions)
Brazil $1,810 1.39% 1.62% $33.68
China $14,318 7.67% 0.59% $175.59
Costa Rica $62 3.63% 0.47% $0.42
Indonesia $1,049 5.42% 0.44% $7.90
Japan $4,553 1.29% 0.34% $17.60
Kenya $80 5.84% 2.15% $3.01
Malaysia $364 5.33% 0.21% $1.27
Nigeria $511 3.65% 1.61% $11.74
Pakistan $325 4.19% 3.20% $15.71
South Korea $1,635 3.31% 0.36% $8.19
Taiwan $691 3.60% 0.89% $8.76
Thailand $460 3.63% 0.60% $3.92
United States $19,975 2.30% 0.83% $208.64
Vietnam $251 6.31% 0.54% $2.52

Figure 10: Projected economic growth attributable to ITA-3, cumulatively over 10 years 136
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Figure 10 provides a ranking of all 14 nations’ 10-year cumulative growth anticipated from
joining the proposed ITA-3. Here, Pakistan, Kenya, Brazil, Nigeria, Taiwan, the United States,
and Thailand are the largest beneficiaries of an ITA-3. While all nations benefit considerably,
these seven nations experience the highest relative growth in real GDP due to an ITA-3
expansion.
Over 10 years from their accession to this proposed ITA-3, this set of 14 countries could expect
to generate a combined cumulative increase to global GDP of nearly $500 billion. This set of 14
countries comprised about 62 percent of global ICT imports in 2019, and as noted, the WTO
found that the 82 ITA-1 signatories account for 97 percent of global trade in ITA-covered
products. Using these two statistics to scale total global GDP impacts between modeled
countries, ITIF found that global GDP would be expected to cumulatively rise by $784 billion
over 10 years if all 82 signatories of ITA-1 were to join the proposed ITA-3.
If all 82 ITA-1 signatory countries were to join the proposed ITA-3, global GDP could cumulatively
grow by $784 billion over the ensuing 10 years.
Addressing Developing Countries’ Potential Concerns Regarding ITA Accession

While the potential economic benefits for developing countries are evident in joining an ITA-3,
some concerns may remain for policymakers. Multiple developing nations, some modeled in this
study, still have not joined the ITA in any capacity. Such countries usually justify their non-
participation in the ITA on the fear of losing revenues from tariffs on ICT goods or on
protectionist grounds of seeking to preserve domestic ICT industries and employment. However,

ITIF’s model finds robust evidence on tax revenues recovered elsewhere from a growing economy
that further justifies ITA membership among developing nations.
ITA Tariffs and Government Finances

Some developing-nation policymakers have argued against joining the ITA believing that tariff
revenue from ICT goods imports is too essential to forgo. Tariff revenues on ICT in developing
countries are often easily collected and may comprise a considerable share of government
revenue, thereby seeming like a stable revenue stream to policymakers. However, ITIF’s growth-
revenue estimation model finds this policy rationale flawed. While in the short run tariffs forgone
as a result of ITA accession could create a revenue shortfall, the ICT-fueled growth created from
joining the ITA provides alternative sources for additional taxes to be raised. Most developing
countries do rely more on tariffs to raise government funds than do developed ones. Figure 11
depicts this, showing that for the 14-country sample, developing countries such as Pakistan,
Kenya, and Vietnam are the most tariff revenue-intensive nations. Further, developed and
emerging countries such as South Korea, the United States, China, and Japan are the least tariff
revenue intensive, after Malaysia. (Malaysia is an outlier here due to its especially low effective
applied rates.)
Figure 11: Tariff revenue as a share of GDP, 2019 137

2.0%
1.5%
1.0%
0.5%
0.0%
Figure 12 illustrates a similar trend in countries’ taxation compositions. Nigeria, Kenya, Vietnam,
Pakistan, and Taiwan maintained the highest tariff shares of total government taxation during
2019. Nigeria collected 10.8 percent of its taxes via tariffs, whereas Japan, the least tariff
reliant, had only 0.6 percent of its taxes collected from tariffs. Wealthier nations such as Japan,
China, Malaysia, and the United States were less tariff reliant in their taxation.

Figure 12: Tariff revenue as a share of total taxation, 2019 138
0.6%
100% 3.4% 2.1% 1.9% 1.8% 1.6% 1.5% 1.5% 1.3%
9% 6.9%
10.8% 9.6% 9.4%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Income/Profit/Capital Gains Tax Goods and Services Tax (Excluding Tariffs) Other Tariffs
Tax Revenue Analysis Post ITA Accession

To provide complete analysis of the net economic benefits of ITA-3 accession, ITIF analyzed
projected tax revenues resulting from each country’s entrance into an ITA-3. Combining tax rate
data with ITA-3 import data and the growth estimates provided in this paper’s previous section,
ITIF quantified losses in tariff revenue forgone and the collection of tax revenues made by
countries thanks to the ICT-driven growth they experience from an ITA-3. As a nation’s economy
grows, businesses increase revenues and workers take home higher incomes and thus increase
their consumption. These two main channels—income and consumption—increase tax revenue
when the economy is growing. To approximate average tax rates for income and consumption by
country, ITIF used OECD data from its GRS database. 139 Income tax (attempting to aggregate
national income) is approximated by the GRS database’s indicator “Taxes on Income, Profits,
and Capital Gains.” Consumption tax (aggregating consumer activity nationwide) is proxied by
the GRS indicator “General Taxes on Goods and Services.” Table 8 summarizes the tax rates
used to assess each country’s growth-revenue estimates attributable to ITA-3 accession.

Table 8: Generalized effective tax rates 140
Consumption Tax Rate

Country ITA-3 Tariff Rate Income Tax Rate
on Goods and Services
Brazil 6.12% 7.40% 12.1%
China 2.02% 5.50% 6.7%
Costa Rica 1.75% 4.90% 4.4%
Indonesia 1.55% 4.90% 3.4%
Japan 1.26% 10.20% 4.1%
Kenya 8.07% 7.70% 4.2%
Malaysia 0.74% 8.50% 1.0%
Nigeria 5.76% 3.80% 0.9%
Pakistan 12.57% 3.50% 17.0%
South Korea 1.30% 9.10% 4.3%
Taiwan 3.21% 8.60% 5.0%
Thailand 2.10% 6.10% 3.6%
United States 3.04% 11.10% 2.0%
Vietnam 1.69% 6.30% 6.0%
The model applies these generalized effective tax rates onto ITIF’s estimations of GDP growth
attributable to the ITA-3. Table 9 summarizes both the short- and long-run revenue implications
of ITA accession. In all short-run cases, removing tariffs on ITA-3 products indeed creates a
revenue shortfall. Even countries with the highest share of revenues recovered, such as Pakistan
and Brazil, whose high tariff rates and low import growth rates cause them to recover an
estimated 42.5 percent and 38.7 percent of revenue forgone, respectively, still experience a
short-term loss. Despite this, Pakistan already recovers nearly half of the revenue lost in the first
year, and Brazil recovers over one-third. Conversely, Nigeria, South Korea, Thailand, and Vietnam
would be impacted the most in the short term, as these four countries would recover no more
than 9 percent of revenue lost in the first year.

Table 9: Tax revenue impact from joining an ITA-3 141
Consumption Tax Revenue Gained as

Year-1 Tariff Revenue Forgone Income Tax
Revenue Gained Percentage of
Estimate (U.S. Millions) Revenue Gained
(U.S. Millions) Revenue Forgone
Brazil $942 $148 $216 38.7%

China $3,904 $340 $497 21.5%
Costa Rica $28 $2 $1 11.1%
Indonesia $261 $12 $24 13.4%
Japan $892 $48 $154 22.6%
Kenya $72 $4 $15 25.9%
Malaysia $120 $2 $30 26.4%
Nigeria $323 $4 $22 8.1%
Pakistan $314 $69 $64 42.5%
South Korea $674 $38 $11 7.2%
Taiwan $799 $52 $54 13.2%
Thailand $442 $21 $17 8.4%
United States $8,888 $231 $1,827 23.2%
Vietnam $675 $53 $8 9.0%
Consumption Tax Revenue Gained as

Year-10 Tariff Revenue Forgone Income Tax Revenue
Revenue Gained Percentage of
Estimate (US$ Millions) Gained (US$ Millions)
(US$ Millions) Revenue Forgone
Brazil $1,486 $234 $2,492 183.5%

China $8,810 $767 $9,657 118.3%
Costa Rica $41 $2 $20 55.6%
Indonesia $531 $23 $387 77.4%
Japan $1,270 $68 $1,795 146.7%
Kenya $130 $7 $232 184.0%
Malaysia $214 $3 $108 51.6%
Nigeria $659 $8 $446 68.9%
Pakistan $530 $117 $550 125.8%
South Korea $1,150 $64 $746 70.4%
Taiwan $1,439 $94 $754 58.9%
Thailand $869 $41 $239 32.2%
United States $14,663 $381 $23,159 160.5%
Vietnam $2,488 $194 $159 14.2%
However, significant losses in the short run don’t necessitate large losses over the long run.
These macroeconomic net effects recover as time passes and as ICT bolsters the economy. By
Year 10, Nigeria and South Korea both recover more than two-thirds of the annual revenue hole
created from eliminating ITA-3 tariffs. In year one, Nigeria and South Korea recover smaller

shares of revenue forgone than Vietnam, but by Year 10, Vietnam’s share of taxes recovered only
rises by about 5 percentage points.
ITA-3 accession is an especially win-win trade policy for nations estimated to experience growth
while fully closing the tariff revenue hole by Year 10. Pakistan grows its economy by 3.2 percent
after 10 years of cumulative ICT-induced growth. It recovers 126 percent of tariff revenue
forgone during its 10th year after joining the ITA-3, more than completely filling the revenue
shortfall created from eliminating the tariffs. Kenya, after 10 years, grows its economy by over
2.2 percent and recovers a higher share of Year-10 revenue than any other country in the model,
at 184 percent of revenue forgone. Kenya’s new tax revenue in Year 10 nearly doubles the value
of tariff revenues forgone in Year 10 due simply to the fact that its expected GDP growth
substantially raises income and consumption taxes collected. Similarly, Brazil, which could
anticipate a 1.6 percent cumulative growth in GDP over 10 years, would expect a near-identical
share of recovered revenues in the 10th year, at 183 percent.
Tariff losses in the short run from ITA-3 accession don’t necessarily indicate large revenue losses over
the long run, thanks to the increased economic growth ITA participation engenders.
While Brazil and Kenya differ in their ITA-3 tariff rates and total GDP growth attributable to ITA-
3, they experience roughly the same shares of revenue recovered in Year 10 because of Brazil’s
larger absolute GDP but slower GDP growth rate in the status quo before joining the ITA-3.
Brazil’s 2019 real GDP was over 20 times larger than Kenya’s, so the nation raises higher total
revenues that makes its share of recovered revenue in Year 10 similar to Kenya’s. Pakistan’s
generalized effective tax rates are also unique to the set. It’s the only country in the model whose
consumption tax is more than twice as high as its income rate. Pakistan’s low income tax rate of
3.5 percent means that its government may expect a lower rate of return than would other
countries on taxable growth. Even so, it remains a top beneficiary of an ITA-3 in both growth and
revenue recovery. Brazil, China, Japan, Kenya, Pakistan, and the United States create more tax
revenue than they forgo by the 10th year after ITA-3 accession. Further, 12 of the 14 countries
in the study all recover over half of their tariff revenue shortfall by Year 10.
Thailand and Vietnam remain outliers in their low share of forgone revenue recovered in Year 10.
Thailand recovers about 32 percent while Vietnam recovers just 14 percent. Their outlier status
is due mainly to three factors. First, they are developing nations with lower absolute GDP than
most other countries in the set. Second, they both have exceptionally high annual import growth
rates in the status quo with no ITA-3 accession, at rates near double their average yearly GDP
growth rates. And third, both Thailand and Vietnam have low average tariff rates on ITA-3 goods.
These three economic characteristics lower the marginal value of taxing GDP growth instead of
import growth. With high import growth rates (7 percent for Thailand and 14 percent for
Vietnam) in the status quo, and low tariff rates, these countries are rare exceptions wherein
imports are relatively price inelastic. Import growth remains high even with minor tariffs
imposed, so their marginal increase in imports by lifting ITA-3 tariffs is less valuable for revenue
creation than for other countries in the study. These circumstances, however, do not indicate
that Thailand and Vietnam, nor any other country in the model, lack clear economic benefits
from joining the ITA-3. All countries still experience valuable GDP growth in 10 years
attributable to an ITA-3. However, some countries would still face long-run trade-offs in their

revenue policy when considering joining the ITA-3. But for almost every country examined in this
model, that trade-off is clear: ITA-3 accession promotes increased consumption of ICT imports,
which grows a nation’s ICT capital stock. A growing ICT capital stock exerts numerous positive
economic benefits by raising productivity and expanding access to digital services. Productivity-
enhancing ICT expansion therefore ultimately drives at-large economic growth.
Further Implications for Developing Nations

Bridging the Digital Divide
Joining the ITA provides a pro-growth alternative for nations to collect tax revenues more
efficiently, while helping developing countries bridge the digital divide and improve quality of life
under a larger and more-productive economy. Among study countries, all but two nations (Japan
and the United States) identify as developing economies under the WTO (although China should
now certainly be accounted for as a developed economy, especially with respect to the ICT
sector). While members of the WTO declare their development status because the WTO provides
no formal definition between developed and developing countries, some general disparities still
prevail between the two. Developing nations typically have lower GDP per capita and lower overall
standards of living. 142
Increasing levels of ICT capital stock represents a particular benefit of ITA accession for
developing nations, ones that, in this study, can anticipate a 10-year growth of 61 percent due to
ITA-3 expansion.
One particular line observed between developed and developing countries is the growing digital
divide between them. Developing nations, lagging behind the developed world’s level of digital
services, technology innovations, and overall ICT capital stock, have a unique advantage in
joining the ITA. As detailed in the previous section, joining the ITA-3 proposal provides clear
economic growth and recovers a large share of tax revenue forgone in eliminating tariffs for both
developed and developing nations. In addition, an expansion in ICT capital stock achieved by
joining the ITA is a benefit all its own for developing nations. Beyond implications of growth and
revenue, developing countries improving access to equal technologies used by global leaders
improves their competitive edge and produces other unexpected positive externalities through the
proliferation of new ICT-powered digital services.
In most cases, developing nations experience more significant cumulative growth in their ICT
capital stock over 10 years than do developed ones. While developed nations would create more
considerable additions to their ICT capital stock in absolute terms, their percentage growth is
heavily outweighed by developing partners. On average, in this sample, developing nations can
anticipate a 10-year growth in their net ICT capital stock of 61 percent due to ITA-3, whereas
developed ones only 30 percent. (See table 10.)

Table 10: Nations’ ICT capital stock growth resulting from an ITA-3 expansion 143
Cumulative 10-Year
Cumulative 10-Year %
Annual Real Net ICT Capital Growth in Net ICT
Real GDP per Growth in Net ICT
Country GDP Growth Stock, Year 1 (U.S. Capital Stock
Capita, 2019 Capital Stock
Rate Millions) Attributable to ITA-3
Attributable to ITA-3
(in U.S. Millions)
Brazil $8,575 1.39% $45,559 36.8% $16,746
China $9,986 7.67% $482,020 82.6% $398,002
Costa Rica $12,313 3.63% $4,409 32.3% $1,486
Indonesia $3,877 5.42% $44,498 62.9% $28,004
Japan $35,890 1.29% $209,674 22.7% $47,565
Kenya $1,513 5.84% $2,336 68.1% $1,592
Malaysia $11,392 5.33% $43,166 51.1% $22,073
Nigeria $2,543 3.65% $15,540 63.9% $9,932
Pakistan $1,502 4.19% $6,831 64.4% $4,397
South Korea $31,909 3.31% $145,165 41.3% $59,900
Taiwan $29,066 3.60% $69,079 49.5% $34,195
Thailand $6,606 3.63% $58,464 53.8% $31,444
United States $60,701 2.30% $841,338 38.1% $320,598
Vietnam $2,604 6.31% $102,935 126.6% $130,305
Assessment of Full ITA Membership for Non-ITA or ITA-1-Only Nations

In addition to analyzing the economic impacts of the proposed ITA-3, ITIF’s study also examines
the economic impact of full ITA accession for the study countries that aren’t yet fully in either
the ITA-1 or ITA-2, which for this analysis meant analyzing Brail, Kenya, Nigeria, and Pakistan’s
full accession to the ITA (ITA-1, ITA-2, and ITA-3) and for Indonesia and Vietnam, their joining
the ITA-2 and ITA-3 (which is one reason why, for them, the growth effects are lower than for the
other four countries listed here). 144
If Brazil and Pakistan joined the ITA all the way through the here-proposed ITA-3, they could expect
their economies to be 3.2 percent and 3.8 percent larger, respectively, after 10 years than would
otherwise be the case.
Table 11 summarizes key findings from an economic analysis of these countries’ potential full
ITA accession. The analysis finds that if Brazil and Pakistan joined the ITA in full, each could
expect their economy to cumulatively grow to be approximately 3.2 and 3.8 percent higher,
respectively, than would otherwise be the case over the 10 years post ITA-3 accession. Kenya
and Nigeria could expect 2.9 and 2.7 percent economic growth, respectively, over the baseline
scenario. Brazil, Kenya, and Pakistan would more than fully recover their tariffs forgone after 10
years, while Indonesia and Nigeria would come close, more than two-thirds of the way there (77
and 69 percent, respectively), while Vietnam (due to its unique tax structure as subsequently
explained) would need to seek revenue alternatives.

Under full ITA accession, all nations modeled would experience some additional improvement in
long-run growth than in the scenario for just joining the ITA-3. These estimates vary in their
marginal improvements based on a country’s intensity of tariffs and volume of trade for products
included under ITA-1 and ITA-2. But extending the methodology for ITA-3 estimates onto full
ITA membership bears some modeling limitations. For instance, calculating net ICT capital stock
in the status quo when tracking all products covered in full ITA membership gives a larger
estimate for a nation’s base value of ICT capital stock in the status quo (before any ITA adoption)
than would be estimated with just ITA-3 products. So to maintain consistency when analyzing
countries within the model, the same estimates for base ICT capital stock in the ITA-3 model are
applied to full ITA models.
Table 11: The economic and tariff impact of full ITA membership, select nations 145
Brazil Indonesia Kenya Nigeria Pakistan Vietnam
GDP (2019, U.S. Billions) $1,810 $1,049 $80 $511 $325 $251
Weighted Average Effective
Applied ITA Tariff Rate
6.33% 1.46% 7.09% 6.89% 8.80% 1.17%
Year-1 GDP Growth

Attributable to Full ITA 0.32% 0.05% 0.33% 0.27% 0.42% 0.05%
Membership
Cumulative 10-Year GDP

Growth Attributable to Full 3.20% 0.52% 2.91% 2.73% 3.77% 0.58%
ITA Membership
Cumulative 10-Year GDP

Growth from ITA Membership $66.4 $9.2 $4.1 $20.0 $18.5 $2.7
(In U.S. Billions)
Year-10 Tax Revenue

Generated, as Share of Tariff 178.13% 77.40% 184.57% 69.21% 126.00% 9.38%
Revenue Forgone
Difference in Tax Revenue
during Year 10 of ITA $2,355 -$140 $148 -$343 $162 -$2,387
Accession (U.S. Millions)
Second, average effective applied tariff rates between products in full ITA coverage may be lower
than rates calculated solely for ITA-3 in some countries if they simply have lower average
effective tariffs applied on ITA-1 and ITA-2 products than they do on ITA-3 goods. With a lower
average effective tariff rate on full ITA membership, growth could be underestimated compared
with ITA-3 estimates, even when full ITA membership accounts for more imports. To help correct
for this, ITIF calculated trade volume-weighted average tariff rates per country to more accurately
average tariff rates applied to ITA-3 goods and previous ITA goods. Despite these limitations, the
results regarding the economic impacts of full ITA accession add robustness to the findings
reported by the general ITA-3 model. Smaller developing nations such as Vietnam and Kenya still
find their ICT capital stock growing at much faster rates than developed ones from joining the
ITA. Moreover, all countries, regardless of their development status, enjoy higher economic
growth cumulatively over 10 years and, through regular taxation on consumption and income,
recover some or all of their tariff revenue forgone to spur ICT-driven growth.

ANALYZING THE IMPACT OF ITA-3 EXPANSION ON THE UNITED STATES
Evidence suggests that the ITA has been beneficial for the United States, both in terms of
fostering the competitiveness of U.S. ICT industries and (as noted earlier) in reducing prices for
ICT products that bolster productivity and enhance quality of life, such as personal computers
and TVs. Regarding enhancing the competitiveness of the U.S. ICT sector, a 2016 study by the
U.S. International Trade Commission “suggests that the ITA had a positive and statistically
significant impact on U.S. exports of the covered products to the ITA member countries. The
estimated impact on U.S. exports was $34.4 billion in 2010 (a 56.7 percent increase relative to
the baseline).” 146
ITIF found that an ITA-3 would also produce considerable benefits for the U.S. economy,
including by contributing over $200 billion in economic growth, boosting U.S. exports of ICT
products by $3.5 billion, increasing revenues of U.S. ICT firms by $12 billion, and supporting
the creation of over 78,000 new U.S. jobs.
U.S. exports of proposed ITA-3 products to the 13 other nations in this study tallied $59.7
billion in 2019. 147 Noting that these 13 nations account for 77.1 percent of global ICT imports,
ITIF applied a scaling factor of 1.29 to account for the exports of ITA-3 products U.S. firms
make to other nations not in the study, leaving an estimate that total U.S. exports of proposed
ITA-3 products to the world equals $77.3 billion. The country-weighted average of tariffs
imposed on ITA-3 products by the 13 other countries in this report (plus EU 27 countries) is 3.4
percent (which ITIF here used as a rough proxy for a global average) so applying this and the
aforementioned 1.3 elasticity multiplier suggests that the increase in global import demand for
U.S. exports of ITA-3 products would be $3.45 billion.
An ITA-3 would contribute over $200 billion in U.S. economic growth, boost exports of ICT products by
$3.5 billion, increase revenues of U.S. ICT firms by $12 billion, and support the creation of over
78,000 new U.S. jobs.
Given that the U.S. Department of Commerce reports that for every $1 billion in manufacturing
exports, 6,250 jobs in manufacturing companies are created or supported, ITA-3 expansion
would directly support the creation of approximately 21,575 jobs. 148 In January 2019, the
Economic Policy Institute (EPI) provided updated employment multipliers for certain jobs in the
U.S. economy, finding that each 100 jobs in durable manufacturing support an additional 289.1
jobs; that is, they have a multiplier of 2.89. 149 Applying this factor to 21,575 jobs created from
the increased exports of ITA-3 products yields 62,350 new U.S. jobs created.
However, new American jobs would also be created through an additional dynamic. ITIF
estimated, based on applying the previously described dynamics of decreasing tariff rates and
the elasticity multiplier, that a fully implemented ITA-3 would result in a $35 billion increase in
global imports of such ITA-3 products. Since U.S.-headquartered ICT enterprises account for
about 34 percent of global ICT market share as of 2021, this means a significant share of this
increased global demand will be filled by U.S. ICT-headquartered enterprises, even if those U.S.
ICT goods manufacturers assemble certain products in Taiwan or China that are destined for sale
in Germany or South Africa. 150 In other words, it’s not just about exports from within U.S.
borders. Making the ITA larger would expand the overall global ICT market, making the U.S. ICT

industry stronger in the process. 151 Thus, U.S. headquartered-enterprises, even if filling export
orders from foreign affiliates, subsidiaries, or factories, may capture as much as $12.2 billion of
this market. Indeed, even when some of those jobs are filled abroad, they often support U.S.
employment at home, because employment in U.S. parents is likely to increase with increases in
U.S. affiliate activity. In fact, one study finds that an increase in U.S. affiliate employment of 1
percent is associated with an increase in parent employment of 0.2 percent. 152 In other words,
U.S. affiliate activity abroad is often a complement to, rather than a substitute for, the activity of
parent companies in the United States. 153
Considering that the average revenue per employee of the top 10 U.S. ICT goods manufacturers
is about $500,000, this suggests that about 24,350 new workers will be needed to meet this
demand. And with the average ratio of U.S. to foreign employees for the top 10 U.S. ICT goods
manufacturers being about 0.47, this suggests that about 11,450 new jobs would be located in
the United States. Presuming that many of these jobs would likely be in supportive research and
development (R&D), supply chain, logistics, or other administrative roles, ITIF applied the very
modest EPI multiplier of 1.42 for jobs in professional, scientific, and technical services fields to
arrive at a total number of about 16,000 new jobs created through this dynamic, thus arriving at
the total of 78,375 U.S. jobs created from a possible ITA-3 expansion.154
CONCLUSION
The ITA represents one of the world’s most successful plurilateral trade agreements. By creating
zero-in/zero-out tariff environments, it has played a catalytic role in contributing to the evolution
of global ICT GVCs that have enabled countries and enterprises to specialize in market segments
wherein they enjoy a competitive advantage for the production of ICT goods. This, for instance,
has led to semiconductors becoming the world’s fourth most traded product. 155 At the same
time, by reducing their prices through tariff elimination, the ITA has facilitated greater global
consumption of the ICT goods that lie at the heart of and fundamentally make possible the global
digital economy. This increasing ICT capital stock within nations bolsters the productivity and
innovation capacity of businesses (large and small alike), households, and individuals,
translating to increased economic growth for all participants.
Embracing an ITA-3 would expand the range of productivity- and innovation-enhancing ICT
products under ITA coverage, ensuring that the most novel, cutting-edge ICT products (including
the most-current-generation forms of these technologies) are included. As noted, these products
are already delivering significant environmental, health, and production benefits—and nations
would be wise to include such products in an ITA-3 both to bolster the competitiveness of their
own domestic industries and in the interest of achieving greater domestic, and global, economic
growth. Moreover, an ITA-3 would produce considerable economic, export, and employment
growth for the United States and the world. Now nearly a decade from when global stakeholders
began to consider the initial ITA expansion, and five years on from ITA-2 implementation, it is
time for nations to start thinking about an ITA-3, and carrying forward the robust momentum
produced by the original ITA and its 2016 expansion.

APPENDIX A: LIST OF COUNTRIES BY CURRENT ITA MEMBERSHIP 156
ITA Signatory Joined ITA-2? ITA Signatory Joined ITA-2?
Afghanistan No Lithuania Yes
Albania Yes Luxembourg Yes
Australia Yes Macao Yes
Austria Yes Malaysia Yes
Bahrain No Malta Yes
Belgium Yes Mauritius Yes
Bulgaria Yes Moldova No
Canada Yes Montenegro Yes
China Yes Morocco No
Colombia Yes Netherlands Yes
Costa Rica Yes New Zealand Yes
Croatia Yes Nicaragua No
Cyprus Yes Norway Yes
Czech Republic Yes Oman No
Denmark Yes Panama No
Dominican Republic No Peru No
Egypt No Philippines Yes
El Salvador No Poland Yes
Estonia Yes Portugal Yes
Finland Yes Qatar No
France Yes Romania Yes
Georgia No Russia No
Germany Yes Saudi Arabia No
Greece Yes Seychelles No
Guatemala Yes Singapore Yes
Honduras No Slovakia Yes
Hong Kong Yes Slovenia Yes
Hungary Yes South Korea Yes
Iceland Yes Spain Yes
India No Sweden Yes
Indonesia No Switzerland Yes
Ireland Yes Taiwan Yes
Israel Yes Tajikistan No
Italy Yes Thailand Yes
Japan Yes Turkey No
Jordan No Ukraine No
Kazakhstan No United Arab Emirates No
Kuwait No United Kingdom Yes
Kyrgyz Republic No United States Yes
Latvia Yes Vietnam No
Liechtenstein Yes

APPENDIX B: GROWTH-REVENUE ESTIMATES METHODOLOGY
Calculating ITA Trade Flows
Data for calculating trade in ITA goods comes from the UN Comtrade Database. The database
provides the value and weight of imports and exports between each country and its trading
partners broken down by year and commodity type. Of the three classification systems provided
by UN Comtrade, ITIF identified commodities codes covered under the ITA through the
Harmonized Commodity Description and Coding System (HS). Since signatories first formed the
ITA in 1996, HS1996 codes have identified product classification of ITA-covered imports.
Similarly, negotiating countries of the 2015 ITA expansion identified ITA-covered goods using
HS2007 codes. While the Harmonized System is extensive, some commodities covered under the
ITA lack a relevant HS code. ITA clauses refer to these imports as “Attachment B” products.
As new iterations of the Harmonized System are released, more Attachment B products become
accounted for under HS6 codes. Whereas ITIF’s 2017 analysis on the ITA utilizing HS2007 six-
digit codes counted 144 product codes in the ITA-1 and 201 in the ITA-2, recounting them for
this paper’s analysis on full ITA accession (plus ITA 3 Proposal) under their HS2017 six-digit
codes identifies 149 codes included by ITA-1 and 192 codes in ITA-2. Beyond products
recognized by the HS2017 update, ITIF’s analysis excludes those remaining Attachment B
products for consistency purposes across countries.
From a list of more than 700 recommended product descriptions produced by industry leaders in
international ICT trade, ITIF formed a set of 251 unique six-digit product codes according to the
HS2017 classification system. To maintain consistency between modeling the ITA-3 with
HS2017 codes versus modeling ITA membership in full (including ITA 3 Proposal), HS2007
codes for ITA-1 and ITA-2 identified by ITIF’s 2017 study, “How Joining the Information
Technology Agreement Spurs Growth in Developing Nations,” are transposed to corresponding
codes under HS2017. 157 Since the HS classification makes significant changes to its product
groupings with each update, ITIF changed ITA-1 and ITA-2 codes from HS2007 first to HS2012
and then to HS2017 counterparts to ensure accuracy when comparing present import data for
originally identified ITA-1 and ITA-2 products alongside proposed ITA-3 products.
While the most-specific product-coding maintained between all countries is at the six-digit level,
only some HS six-digit codes listed under ITA coverage have all commodities within their coding
included under the enacted/proposed agreement’s coverage. To capture the share of items per
HS6 codes that are covered, ITIF used adjustment factors calculated from the UN Comtrade
Database’s harmonized tariff schedule codes (HTS) for the United States, which further
designate commodity classifications by 8-digit (HTS8) and even 10-digit (HTS10) codes.
Adjustment factors are the shares of U.S. HTS8/HTS10 codes included by ITA coverage out of all
products contained by a given HS6 code. Adjustment factors calculated this way are then
applied as proxies to adjust import values for all countries in the model set.
In transposing ITA-1 and ITA-2 codes into the HS2017 six-digit level, some codes appear as
duplicates appearing in two or even all lists. Duplicate codes appear due to either the six-digit
commodity group only being partially covered in one agreement and then partially covered again
in the other(s) or due to updates from HS2007 to HS2017 changing the types of commodities
within that six-digit commodity line. Because the completed list of ITA products underwent
multiple transformations, and in each of those transformations, some commodity codes did not

fully translate onto its updated code, our finalized data on traded goods contains some degree of
unavoidable error. UN Comtrade provides trade flows at the HS2017 six-digit level, and each
country’s total value of ITA imports is summed based on each HS2017 six-digit line covered in
ITIF’s list of ITA products. By multiplying these import-value sums per HS2017 six-digit code in
every country by their corresponding proxy adjustment factor, ITIF accounted for the total value
of HS codes partially covered by the ITA agreement.
Some products, however, within a commodity code may be similar enough to one another to be
substituted for certain ICT products. As countries eliminate tariffs on ITA-covered products
within a commodity, some consumers of non-ITA-covered substitutes within the same commodity
code could expect to switch their demand to the product included by ITA coverage. This
substitution effect would induce additional demand beyond what ITIF calculated using import
demand elasticities, thus making capital stock growth from ITA accession more significant than
what ITIF can compute from its growth-revenue model.
Calculating ITA Tariffs

Data for estimating the value of tariffs comes from the World Bank’s World Integrated Trade
Solution (WITS) TRAINS database. ITIF’s model takes tariff line rates from the database and
collapses that data to an HS6 basis using a simple average for each country. WITS TRAINS
imports data provides most favored nation rates and preference rates between countries, allowing
ITIF to produce trade-value-weighted average tariff rates applied to ITA products. The value of
ITA tariff revenues are derived from the relative share of reported tariff revenues collected by the
government. Data on the total reported tariff revenues collected by each country’s government
comes from the OECD’s GRS Database. Since OECD data does not include Taiwan, the entry for
Asia-Pacific approximates it instead. World Bank indicators on tariff/taxation revenue replace
data for Pakistan. Therefore, the model assumes all international trade tax revenues are
equivalent to tariff revenues. When extending this assumption, other tax-revenue sources
collapse into broader categories to target specific tax effects when eliminating ITA tariffs.
ITIF calculated tariff revenue obtained from ITA imports by multiplying the import value of each
ITA HS six-digit commodity by its corresponding most favored nation/preference-adjusted tariff
derived from the WITS database. Next, the model takes the total reported WITS tariff revenue for
all ITA imports. The first estimate expresses the unadjusted value of ITA tariff revenue as a share
of total unadjusted tariff revenue. The model likely overestimates unadjusted tariff revenue
because it does not discriminate against the country expectedly importing more from partners
with which it has existing trade agreements. However, by adjusting this share by the actual tariff
revenue obtained from the government, a suitable estimate for tariff revenue gained through ITA
imports is derived, which partially accounts for the heterogeneity of tariffs across products and
acknowledges ITA trade agreements’ tariff revenue-distorting effects.
Some further friction may occur within the adjusted ITA tariff revenues due to countries reporting
their tax revenues by fiscal year compared with trade data reported by calendar year. Once
adjusted by the actual tariff revenue, ITIF calculated the real effective tariff rate on ITA products
by dividing the total value of ITA imports by the adjusted tariff revenue from ITA imports.

APPENDIX C: METHODOLOGY OF ECONOMETRIC EXERCISE
Estimated Regression Equations
Equation 1 details regression-model estimates on the relationship between 1996 ITA
membership and ICT import intensity. Equation 2 details regression assessing the estimated
relationship between 2015 ITA membership and ICT import intensity. Equation 3 details
regression-model estimates of the relationship between 1996 ITA membership and ICT export
intensity. Equation 4 details regression-model estimates of the relationship between 2015 ITA
membership and ICT export intensity.
1. 𝐼𝐼𝐼𝐼𝐼𝐼 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝑠𝑠𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 = 𝛽𝛽0 + 𝛽𝛽1 𝐼𝐼𝐼𝐼𝐼𝐼1_𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑖𝑖𝑖𝑖 + 𝛽𝛽2 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑖𝑖 + 𝜏𝜏𝑡𝑡 + 𝜀𝜀𝑖𝑖𝑖𝑖
2. 𝐼𝐼𝐼𝐼𝐼𝐼 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 = 𝛽𝛽0 + 𝛽𝛽1 𝐼𝐼𝐼𝐼𝐼𝐼2_𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑖𝑖𝑖𝑖 + 𝛽𝛽2 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑖𝑖 + 𝜏𝜏𝑡𝑡 + 𝜀𝜀𝑖𝑖𝑖𝑖
3. 𝐼𝐼𝐼𝐼𝐼𝐼 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 = 𝛽𝛽0 + 𝛽𝛽1 𝐼𝐼𝐼𝐼𝐼𝐼1_𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑖𝑖𝑖𝑖 + 𝛽𝛽2 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑖𝑖 + 𝜏𝜏𝑡𝑡 + 𝜀𝜀𝑖𝑖𝑖𝑖
4. 𝐼𝐼𝐼𝐼𝐼𝐼 𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸𝐸 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 = 𝛽𝛽0 + 𝛽𝛽1 𝐼𝐼𝐼𝐼𝐼𝐼2_𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑀𝑖𝑖𝑖𝑖 + 𝛽𝛽2 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑖𝑖 + 𝜏𝜏𝑡𝑡 + 𝜀𝜀𝑖𝑖𝑡𝑡
ICT Import Intensity is the dependent variable of the first two regressions, measured as the
percentage of a nation’s imports in a given year comprising ICT or ICT-related products. ICT
Export Intensity is the dependent variable of the last two, measured as the percentage of a
nation’s exports in a given year comprising ICT or ICT-related products. These data series are
taken from the World Bank Open Data indicators, “ICT Goods Imports (percent of total goods
imports)” and “ICT Goods Exports (percent of total goods exports),” which have data from 2000
to 2019 for 216 countries, territories, and regions. “ITA1_Member” is a binary variable that
assigns a value of 1 to countries that are presently members of the first ITA in a given year in the
time series regressed and a value of 0 to countries that are not members of the first ITA during a
given year. “ITA2_Member” is a binary variable coded the same way, except for membership to
the 2015 ITA expansion. GDP per capita is a control covariate included in both regressions to
approximately measure and control for changes in a nation’s level in development. These controls
ensure that the regression models isolate impacts of the binary variables detailing levels of ITA
membership. Data for GDP per capita is also taken from World Bank Open Data under the
indicator “GDP per capita (current US$).” They symbol “γi” represents fixed effects attributable
to a given country; “τt” represents fixed effects attributable to a given year; and “εit” is the
error term. Table 12 provides summary statistics regarding the dataset used for the regression
analysis.
Table 12: Summary statistics for dataset assessing ITA membership and ICT trade intensity 158
No. of
Variable Period Mean Std. Dev. Min. Max.
Observations
ICT Import Intensity 2000–2019 6.71 5.58 0.001 51.47 3220
ICT Export Intensity 2000–2019 4.21 8.14 0.000 63.64 3088
GDP per Capita 1960–2020 8535.40 17079.08 22.800 190512.70 9865
ITA-1_Member 1996–2020 0.37 0.48 0.000 1.00 216
ITA-2_Member 2015–2020 0.24 0.43 0.000 1.00 216

APPENDIX D: ITA PRODUCT CODES (HS2017 SIX-DIGIT LEVEL) 159
Information Technology Information Technology Agreement
ITA-3 Proposed Expansion
Agreement Expansion
381800 854470 851769 842490 852580 852712 902590 281290 630790 847989 852580 900490
841990 901710 851770 844331 852871 852713 902830 282739 680530 847990 852692 900691
846691 901720 851810 844339 852990 852719 902890 284590 681510 848071 852721 900699
846694 901790 851829 846693 853180 852729 903010 285000 690390 848180 852791 900850
846900 902680 851890 847290 854370 852792 903020 285390 690911 848410 852852 901090
847010 902730 852341 847310 901090 852799 903031 292090 690919 850110 852859 901110
847021 903040 852349 847340 901190 852849 903032 292111 700719 850131 852862 901180
847029 903082 852351 848610 901290 853630 903039 293139 701710 850132 852869 901190
847030 842490 852580 848620 901390 853810 903084 293190 702000 850133 852871 901210
847050 844331 852871 848630 902780 853939 903089 321590 731815 850134 852872 901290
847090 844339 852990 848640 902790 854320 903110 340220 741521 850161 852873 901320
847160 846693 853180 848690 350691 854330 903220 340290 741533 850162 852990 901380
847170 847290 854370 851490 370130 880390 903281 340590 760611 850163 853180 901390
847190 847310 901090 851590 370199 880521 950410 370110 761699 850164 853530 901814
847321 847340 901190 851761 370500 880529 950430 370242 820320 850431 853540 901819
847329 848610 901290 851830 370590 900120 950450 370244 820540 850440 853590 901890
847350 848620 901390 851840 370790 900190 950490 370710 830220 850450 853610 901910
850870 848630 902780 852290 390799 900220 842129 380110 830249 850490 853641 902580
851440 848640 902790 852329 841459 900290 842139 382499 841330 850511 853669 902610
851711 848690 702000 852340 841950 901050 842199 390230 841410 850519 853670 902620
851718 851490 842191 852352 842010 901060 847590 390290 841490 850520 853710 902690
851950 851590 843139 852359 842320 901310 847989 390469 841810 850590 853720 902710
852841 851761 847130 852380 842330 901410 850590 390599 841869 850610 853890 902720
852842 851830 847141 852910 842381 901420 851430 390730 841919 850640 853950 902750
852851 851840 847149 853190 842382 901480 851822 390740 841989 850650 853990 902780
852861 852290 847150 853650 842389 901490 852692 391000 842119 850660 854079 902790
853120 852329 847180 853690 842390 901510 852721 391732 842121 850680 854089 902810
853210 852340 847330 854231 842489 901520 852791 391740 842129 850720 854150 902820
853221 852352 847790 854232 844230 901540 880260 391910 842139 850730 854310 903033
853222 852359 851712 854233 844240 901580 900219 391990 842191 850740 854370 903120
853223 852380 852852 854239 844250 901590 901110 392049 842199 850750 854411 903141
853224 852910 852862 854290 844391 901811 901180 392099 842890 850760 854419 903180
853225 853190 852869 854390 845610 901812 901210 392119 843139 850780 854420 903289
853229 853650 852872 903090 845611 901813 901320 392190 844332 850790 854430 903290
853230 853690 853669 903149 845612 901820 901819 392310 844399 851130 854442 903300
853290 854231 853890 903190 847210 901850 901890 392321 845011 851180 854449 910291
853310 854232 854150 844332 847521 902150 902710 392329 845620 851190 854519 910511
853321 854233 854442 844399 847689 902190 903033 392610 845650 851410 854690 910591
853329 854239 854449 847990 847690 902212 903180 392690 845690 851430 854710 911320
853331 854290 854890 850440 851519 902213 401699 847130 851679 854720 911390
853339 854390 901380 850450 851821 902214 420212 847141 851712 854790 940310
853340 903090 902610 850490 851850 902219 420222 847149 851762 854890 940320
853390 903149 902620 851762 851981 902221 420291 847150 851769 870830 940390

Information Technology Information Technology Agreement
ITA-3 Proposed Expansion
Agreement Expansion
853400 903190 902690 851769 851989 902229 420292 847180 851770 880211 940540
854110 844332 902720 851770 852110 902230 420299 847330 851810 880212 950691
854121 844399 902750 851810 852190 902290 420500 847480 851822 880220 960830
854129 847990 903141 851829 852321 902300 481940 847529 851829 880230 962000
854130 850440 851890 852550 902410 482190 847590 851890 880240
854140 850450 852341 852560 902480 540771 847780 852341 880260
854160 850490 852349 852610 902490 560311 847790 852349 900211
854190 851762 852351 852691 902519 591140 847950 852351 900219
*Note: ITA-1 and ITA-2 codes are converted to HS2017 codes from previous HS versions. This means some HS codes
may appear in more than one list, given that product-code classifications change substantially between years. As a
result, ITA-1 has a count of 149 product codes and ITA-2 has a count of 192 product codes, whereas their original
counts from the HS version in the year such trade agreements were formed are 144 and 201, respectively.

Acknowledgments
The authors would like to thank Robert Atkinson and Alex Key for their assistance with this
report.
About the Authors

ITIF Vice President, Global Innovation Policy Stephen J. Ezell focuses on science, technology,
and innovation policy as well as international competitiveness and trade policy issues. He is the
coauthor of Innovating in a Service Driven Economy: Insights Application, and Practice (Palgrave
McMillan, 2015) and Innovation Economics: The Race for Global Advantage (Yale 2012).
Luke Dascoli is the economic and technology policy research assistant at ITIF. He was previously
a research assistant in the MDI Scholars Program at the McCourt School of Public Policy's
Massive Data Institute. He holds a B.A. in Political Economy from Georgetown University.
About ITIF
The Information Technology and Innovation Foundation (ITIF) is an independent, nonprofit,
nonpartisan research and educational institute focusing on the intersection of technological
innovation and public policy. Recognized by its peers in the think tank community as the global
center of excellence for science and technology policy, ITIF’s mission is to formulate and
promote policy solutions that accelerate innovation and boost productivity to spur growth,
opportunity, and progress.
For more information, visit us at www.itif.org.

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52. Padmashree Gehl Sampath and Bertha Vallejo, “Trade, Global Value Chains and Upgrading: What,
When and How?” The European Journal of Development Research, Vol. 30, Issue 3 (2018): 481–
504, https://link.springer.com/article/10.1057/s41287-018-0148-1.
53. Stephen Ezell, “Boosting Exports, Jobs, and Economic Growth Through the ITA,” The Innovation
Files, March 22, 2012, https://itif.org/publications/2012/03/14/boosting-exports-jobs-and-
economic-growth-through-ita.
54. Patrick Gillespie, “Argentina Tried a Trump-Like Tariff—and It Went Horribly Wrong,” CNN,
December 19, 2016, http://money.cnn.com/2016/12/19/news/economy/tariffs-trump-argentina/.
55. Rosanna Pittiglio, “An Essay on Intra-Industry Trade in Intermediate Goods,” Modern Economy 5
(May 2014): 468–488.
56. United Nations Conference on Trade and Development, “Key Statistics and Trends in International
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57. Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO),
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Value Chains for Trade, Investment, Development, and Jobs” (St. Petersburg: G-20 Leaders
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58. Ibid.
59. Organization for Economic Cooperation and Development, “Trade in Value Added (TiVA) Indicators:
EXGR_FVASH: Foreign value added share of gross exports and EXGR_DVAFXSH: Domestic value
added embodied in foreign exports as share of gross exports,” accessed August 9, 2021,
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60. OECD, WTO, and UNCTAD, “Implications of Global Value Chains.”
61. Susan Lund et al., “Risk, resilience, and rebalancing global supply chains” (McKinsey Global
Institute, August 2020), iv, https://www.mckinsey.com/business-functions/operations/our-
insights/risk-resilience-and-rebalancing-in-global-value-chains; Jeff Masters, “Earth’s 40 Billion-
Dollar Weather Disasters of 2019: 4th Most Billion-Dollar Events on Record,” Eye of the Storm,
Scientific American, January 22, 2020, https://blogs.scientificamerican.com/eye-of-the-
storm/earths-40-billion-dollar-weather-disasters-of-2019-4th-most-billion-dollar-events-on-record/;
Matteo Coronese et al., “Evidence for sharp increase in the economic damages of extreme natural
disasters,” Proceedings of the National Academy of Sciences, Volume 116, Number 43 (October
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62. Hearing on U.S.-India Trade Relations: Opportunities and Challenges, Before the House Committee
on Ways and Means Subcommittee on Trade, 113th Cong. (2013) (written statement of Stephen J.
Ezell, ITIF), http://www2.itif.org/2013-us-india-trade-relations-opportunities-challenges.pdf.
63. Michael Anderson and Jacob Mohs, “The Information Technology Agreement: An Assessment of
World Trade in Information Technology Products,” United States International Trade Commission
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64. The World Bank (ICT goods exports as a % of goods exports; accessed August 6, 2021),
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65. India Brand and Equity Foundation, “IT & BPM Industry in India,” July 28, 2021,
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66. The World Bank (ICT services exports; accessed August 6, 2021),
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67. Bijit Bora and Xuepeng Liu, “Evaluating the Impact of the WTO Information Agreement,” in Light
the Lamp: Papers on World Trade and Investment in Memory of Bijit Bora, edited by Christopher
Findlay, Mari Pangestu, and David Parsons (World Scientific, 2010).
68. Christian Henn and Arevik Gnutzmann-Mkrtchyan, “The Layers of the IT Agreement’s Trade
Impact” (working paper no. ERSD-2015-01, World Trade Organization, February 2015),
https://www.wto.org/english/res_e/reser_e/ersd201501_e.htm.
69. Ibid.
70. Ibid.
71. GDP per capita is selected as a control, as it approximates changes in a country’s level of
development in the overall economy observable over time. Country fixed effects account for the
many other country-specific factors, such as human capital and policy stances, that undoubtedly
impact ICT trade. Year fixed effects account for all other shocks and changes in the global trade
environment occurring in a given year since it would be impossible to identify all such factors
individually in the models.
72. Authors’ econometric analysis on World Bank Open Data indicator, “ICT goods imports (% total
goods imports).”
73. Semiconductor Industry Association, “The Benefits of Including Multi-Component Semiconductors
in an Expanded Information Technology Agreement,” December 8, 2014,
https://www.semiconductors.org/the-benefits-of-including-multi-component-semiconductors-in-an-
expanded-information-technology-agreement/.
74. Stephen Ezell, “An Allied Approach to Semiconductor Leadership” (Information Technology and
Innovation Foundation, September 2020), https://itif.org/publications/2020/09/17/allied-approach-
semiconductor-leadership.
75. Stephen Ezell, “Short-term Chip Shortages Don’t Merit Government Intervention; Long-term
Competitiveness in the Semiconductor Industry Does,” Innovation Files, February 18, 2021,
https://itif.org/publications/2021/02/18/short-term-chip-shortages-dont-merit-government-
intervention-long-term.
76. SemisMatter, “Powering the Economy,” http://www.semismatter.com/why/; John Pitzer, Managing
Director, Credit Suisse (Remarks at SIA Event: “Big Opportunities, Looming Challenges: The State
of the U.S. Semiconductor Industry,” July 9, 2020), https://www.semiconductors.org/events/big-
opportunities-looming-challenges-the-state-of-the-u-s-semiconductor-industry/.
77. Caroline Messecar, “Power electronics driving new demand for metals,” Argus, August 13, 2021,
https://www.argusmedia.com/en/news/2246971-power-electronics-driving-new-demand-for-metals.

78. Steven R. Nadel et al., “Energy-Efficient Motor Systems: A Handbook on Technology, Program, and
Policy Opportunities, Second Edition” (American Council for an Energy-Efficient Economy, 2009),
https://www.aceee.org/ebook/energy-efficient-motor-systems.
79. Colin Cunliff, “Beyond the Energy Techlash: The Real Impacts of Information Technology”
(Information Technology and Innovation Foundation, July 2020),
https://itif.org/sites/default/files/2020-energy-techlash.pdf.
80. American Council for an Energy Efficient Economy (ACEEE), “Semiconductor Technologies: The
Potential to Revolutionize U.S. Energy Productivity,” (ACEEE, May 2009),
https://www.aceee.org/semiconductor-technology-potential-revolutionize-us-energy-productivity.
81. Ibid., 32–36.
82. Ibid., 33–34.
83. Since the 2000s, the doubling in peak computing efficiency—computing efficiency at peak
output—has slowed to every 2.7 years. However, most devices run only a fraction of the time at
peak output (1 percent for mobile devices and laptops, 10 percent for enterprise data servers).
Typical-use efficiency, a metric that considers average efficiency across a year, has continued to
double every 1.5 years. Jonathan G. Koomey et al., "Implications of Historical Trends in the
Electrical Efficiency of Computing," in IEEE Annals of the History of Computing, vol. 33, no. 3,
46–54, March 2011, https://ieeexplore.ieee.org/document/5440129; Sam Naffziger and Jonathan
Koomey, “Energy Efficiency of Computing: What’s Next?” (Electronic Design, 2016),
https://www.electronicdesign.com/technologies/microprocessors/article/21802037/energy-
efficiency-of-computing-whats-next; Jonathan Koomey and Samuel Naffziger, “Moore’s Law Might
be Slowing Down, But Not Energy Efficiency” (IEEE Spectrum, 2015),
https://spectrum.ieee.org/computing/hardware/moores-law-might-be-slowing-down-but-not-energy-
efficiency.
84. U.S. Environmental Protection Agency, “Report to Congress on Server and Data Center Energy
Efficiency Public Law 109-431” (U.S. EPA, 2008), https://eta.lbl.gov/publications/report-congress-
server-data-center.
85. Eric Masanet et al., “Recalibrating global data center energy-use estimates,” Science (2020),
https://science.sciencemag.org/content/367/6481/984.
86. Ibid.
87. Ralph J. Muenster, "Shade Happens," Renewable Energy World, February 2, 2009.
88. N. Fernandez et al., “Impacts of Commercial Building Controls on Energy Savings and Peak Load
Reduction,” Pacific Northwest National Laboratory, Richland, WA, Vol. 25985, 2017,
https://buildingretuning.pnnl.gov/publications/PNNL-25985.pdf.
89. Sila Kiliccote et al., “Characterization of Demand Response in Commercial, Industrial, and
Residential Sectors in the U.S.,” WIREs Energy Environ., Vol. 5, 2016, 288–304,
https://onlinelibrary.wiley.com/doi/full/10.1002/wene.176.
90. International Energy Agency (IEA), Digitalisation and Energy (IEA, 2017), 45,
https://www.iea.org/reports/digitalisation-and-energy.
91. “Innovations in Sensors and Controls for Building Energy Management” (DOE Building
Technologies Office, 2020), https://www1.eere.energy.gov/buildings/pdfs/75601.pdf.
92. ITIF adaptation of IEA, “Cumulative energy savings in buildings from widespread digitalisation in
selected countries, 2017–2040” (IEA, 2020), https://www.iea.org/data-and-
statistics/charts/cumulative-energy-savings-in-buildings-from-widespread-digitalisation-in-selected-
countries-2017-2040.
93. Stephen Ezell, “Why Manufacturing Digitalization Matters and How Countries Are Supporting It”
(ITIF, May 2018), 1, https://www2.itif.org/2018-manufacturing-digitalization.pdf.

94. James Manyika et al., “The Internet of Things: Mapping the Value Beyond the Hype” (McKinsey
Global Institute, June 2015), 68,
http://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20
Insights/The%20Internet%20of%20Things%20The%20value%20of%20digitizing%20the%20phys
ical%20world/Unlocking_the_potential_of_the_Internet_of_Things_Executive_summary.ashx.
95. Peter C. Evans and Marco Annunziata, “Industrial Internet: Pushing the Boundaries of Minds and
Machines” (GE, November 26, 2012), 3, www.ge.com/docs/chapters/Industrial_Internet.pdf.
96. International Trade Center, “TradeMap: Global Totals of Industrial Robots and 3-D Printers,”
https://www.trademap.org/Index.aspx.
97. International Federation of Robots, “IFR presents World Robotics Report 2020,” news release,
September 24, 2020, https://ifr.org/ifr-press-releases/news/record-2.7-million-robots-work-in-
factories-around-the-globe.
98. Ibid.
99. “Industrial Robots Market Size,” Fortune Business Insight (accessed August 4, 2021),
https://www.fortunebusinessinsights.com/industry-reports/industrial-robots-market-100360.
100. International Federation of Robotics, “The Impact of Robots on Productivity, Employment and
Jobs” (International Federation of Robotics, April 2017), 3,
https://ifr.org/img/office/IFR_The_Impact_of_Robots_on_Employment.pdf.
101. Georg Graetz and Guy Michaels, “Robots at Work” (Center for Economic Performance, November
11, 2017), http://personal.lse.ac.uk/michaels/Graetz_Michaels_Robots.pdf.
102. Ibid.
103. Ibid., 22.
104. Ibid., 33.
105. Ibid., 5, 30.
106. James Manyika et al., “A Future That Works: Automation, Employment and Productivity” (McKinsey
Global Institute, 2017), 22,
https://www.mckinsey.com/~/media/mckinsey/featured%20insights/Digital%20Disruption/Harnessin
g%20automation%20for%20a%20future%20that%20works/MGI-A-future-that-works-Executive-
summary.ashx.
107. Michael Zinser, Justin Rose, and Hal Sirkin, “The Robotics Revolution: The Next Great Leap in
Manufacturing” (Boston Consulting Group, September 2015),
https://www.bcg.com/publications/2015/lean-manufacturing-innovation-robotics-revolution-next-
great-leap-manufacturing.
108. “What Is 3D Printing?” 3D Printing.com, accessed October 12, 2016, http://3dprinting.com/what-
is-3d-printing/.
109. Stephen Ezell, “A Policymaker’s Guide to Smart Manufacturing” (ITIF, November 2016), 11–12,
https://itif.org/publications/2016/11/30/policymakers-guide-smart-manufacturing.
110. HP, “HP Inc. and Partners Mobilize 3D Printing Solutions to Battle COVID‐19,” news release,
March 24, 2020, https://press.hp.com/us/en/press-releases/2020/hp-inc--and-partners-mobilize-3d-
printing-solutions--to-battle-c.html.
111. Advanced Manufacturing Crisis Production Response (AMCPR), “America Makes COVID-19
Response Assessing the Role of Additive Manufacturing in Support of the U.S. COVID-19
Response” (AMCPR, March 2021), https://www.fda.gov/media/150615/download.
112. “3D Printing Market Size, Share & Trends Analysis Report By Component, By Printer Type, By
Technology, By Software, By Application, By Vertical, By Material, By Region And Segment
Forecasts, 2021 – 2028,” Intrado, May 26, 2021, https://www.globenewswire.com/news-
release/2021/05/26/2236586/0/en/3D-Printing-Market-Size-Share-Trends-Analysis-Report-By-

Component-By-Printer-Type-By-Technology-By-Software-By-Application-By-Vertical-By-Material-By-
Region-And-Segment-Forecasts-2.html.
113. Raoul Leering, “3D printing is a threat to world trade but its impact is still limited,” ING Bank,
August 5, 2021, https://think.ing.com/articles/the-threat-for-world-trade-is-limited-for-now.
114. Don Hofstrand, “Can We Meet the World's Growing Demand for Food?” AgMRC Renewable Energy
& Climate Change Newsletter, February 2014, https://www.agmrc.org/renewable-energy/renewable-
energy-climate-change-report/renewable-energy-climate-change-report/january--february-2014-
newsletter/can-we-meet-the-worlds-growing-demand-for-food.
115. “Precision Farming Market Size, Share & Trends Analysis Report By Offering, By Application (Yield
Monitoring, Weather Tracking, Field Mapping, Crop Scouting), By Region, And Segment Forecasts,
2021 – 2028,” Grand View Research, March 2021, https://www.grandviewresearch.com/industry-
analysis/precision-farming-market; Remi Schmaltz, “What is precision agriculture?” AgFunderNews,
April 24, 2017, https://agfundernews.com/what-is-precision-agriculture.html.
116. Benjamin Pinguet, “The Role of Drone Technology in Sustainable Agriculture,” Precision Ag, May
25, 2021, https://www.precisionag.com/in-field-technologies/drones-uavs/the-role-of-drone-
technology-in-sustainable-agriculture/.
117. Stephen Ezell, Mark Schultz, and David Lund, “Innovate4Health: How Innovators Are Solving
Global Health Challenges” (ITIF and the Center for the Protection of Intellectual Property, April
2018), 53–54, https://www2.itif.org/2018-innovate-4-health-case-studies.pdf.
118. Edward Rwema, “Saving Lives in Rwanda, with US-made Drones,” VOA, October 19, 2016,
https://www.voanews.com/a/california-startup-drones-life-saving-medicine-rwanda/3558360.html.
119. Ibid.
120. Jon Porter, “Zipline’s drones are delivering medical supplies and PPE in North Carolina,” The
Verge, May 27, 2020, https://www.theverge.com/2020/5/27/21270351/zipline-drones-novant-
health-medical-center-hospital-supplies-ppe.
121. Andrew J. Hawkins, “UPS and CVS will use drones to deliver prescriptions in Florida,” April 27,
2020, https://www.theverge.com/2020/4/27/21238196/ups-cvs-drone-delivery-medicine-florida-
coronavirus.
122. Mike Murphy, “This could be a huge moment for delivery drones. Why aren’t they taking off?”
Protocol, April 18, 2020, https://www.protocol.com/alphabet-wing-drone-delivery-coronavirus.
123. “Global Unmanned Aerial Vehicle (UAV) Market Report 2021-2026 - Rising Demand for
Contactless Deliveries of Medical Supplies and Other Essentials Using Drones Owing to COVID-19,”
Research and Markets, June 28, 2021, https://www.globenewswire.com/en/news-
release/2021/06/28/2253654/28124/en/Global-Unmanned-Aerial-Vehicle-UAV-Market-Report-
2021-2026-Rising-Demand-for-Contactless-Deliveries-of-Medical-Supplies-and-Other-Essentials-
Using-Drones-Owing-to-COVID-19.html.
124. National Research Council and Institute of Medicine, Board on Science, Technology, and Economic
Policy, “Medical Innovation in the Changing Healthcare Marketplace: Conference Summary”
(National Academies Press, 2002), 3, https://www.ncbi.nlm.nih.gov/books/NBK220598/.
125. AdvaMed, “Job Creation,” https://www.advamed.org/medical-device-industry-facts/job-creation/.
126. Congressional Research Service, “Expansion of WTO Information Technology Agreement Targets
December Conclusion” (CRS, July 2015), https://sgp.fas.org/crs/misc/IN10331.pdf.
127. Gilbert Cette and Jimmy Lopez, “ICT Demand Behavior: An International Comparison,” Economics
of Innovation and New Technology 12 (2012): 397–410. Cette and Lopez calculated the elasticity
for ICT demand for the United States over a 20-year period, showing that the price demand for ICT
changes over time. The trend follows an inverted-U shape, increasing in elasticity for a peak in the
1990s before falling. To simplify our estimates, we chose a static elasticity of 1.3—which is about
the middle of the elasticity range shown in the paper. This is to partially account for the difference

in technological levels between the United States and developing nations, as well as the difference
in technological levels between developing nations.
128. Cardona, Kretschmer, and Strobel, “ICT and Productivity.”
129. Author’s analysis from United Nations Comtrade Database, United Nations Main Aggregates
Database, World Bank World Integrated Trade Solutions Database, and International Trade Center
Trade Map Database.
130. Ibid.
131. Current ICT capital stocks are developed through a perpetual inventory method using a depreciation
rate of 32.4 percent and GDP growth rates for each of the six countries, averaged between 2010
and 2014. First, we assume that annually, all our study countries invest in similar asset mixes of
ICT goods (i.e., annually, each of our study countries invest 20 percent of all ICT investment in
telecommunications equipment, 20 percent in IT equipment, and 60 percent in software). This
asset mix is adapted from OECD’s Science, Technology and Industry Scoreboard 2015 and slightly
adjusted to reflect a more likely asset mix for a developing country. Conference Board, Total
Economy Database (key findings; accessed October 1, 2016), https://www.conference-
board.org/data/economydatabase/.
132. Author’s analysis from United Nations Comtrade Database, United Nations Main Aggregates
Database, World Bank World Integrated Trade Solutions Database, and International Trade Center
Trade Map Database.
133. Stephen Ezell and John Wu, “How Joining the Information Technology Agreement Spurs Growth in
Developing Nations” (Information Technology and Innovation Foundation, May 2017),
https://www2.itif.org/2017-ita-spurs-growth-developing-nations.pdf; Bora and Liu, “Evaluating the
Impact of the WTO Information Agreement”; Henn and Gnutzmann-Mkrtchyan, “The Layers of the
IT Agreement’s Trade Impact.”
134. Niebel, “ICT and Economic Growth.”
135. Cardona, Kretschmer, and Strobel, “ICT and Productivity.”
136. Ibid.
137. Author’s calculations used OECD Global Revenue Statistics Database on Indicator 5123 (Customs
and Import Duties), querying Tax Revenue as percentage of GDP and International Monetary Fund
Government Finance Statistics Dataset for Pakistan data.
138. Ibid.
139. OECD, “Global Revenue Statistics Database” (accessed August 9, 2021),
https://www.oecd.org/tax/tax-policy/global-revenue-statistics-database.htm.
140. Authors’ calculations on tariff rate and OECD Global Revenue Statistics Database.
141. Authors’ analysis from UN Comtrade Database, UN Main Aggregates Database, World Bank World
Integrated Trade Solutions Database.
142. World Trade Organization, “WTO | Development - Who are the developing countries in the WTO?”
https://www.wto.org/english/tratop_e/devel_e/d1who_e.htm.
Integrated Trade Solutions Database, and International Trade Center Trade Map Database.
144. Recreating the model’s methodology for full ITA benefits requires tracking import and tariff data for
all six-digit HS codes in the original ITA, ITA-2, and the proposed ITA-3 for the group of four
countries not in the ITA whatsoever. For the two countries having joined only the original ITA, ITIF
tracked import and tariff data for all six-digit HS codes in the 2015 expansion and the proposed
ITA-3.

Integrated Trade Solutions Database, and International Trade Center Trade Map Database.
146. United States International Trade Commission (ITC), “Economic Impact of Trade Agreements
Implemented Under Trade Authorities Procedures, 2016 Report” (ITC, June 2016), 147–148,
https://www.usitc.gov/publications/332/pub4614.pdf.
147. Authors’ analysis of UN Comtrade data.
148. U.S. International Trade Administration, “Commerce Department Celebrates World Trade Week,”
press release, May 17, 2010, http://trade.gov/press/press-releases/2010/commerce-department-
celebrates-world-trade-week-051710.asp.
149. Josh Bivens, “Updated employment multipliers for the U.S. economy” (Economic Policy Institute,
January 2019), 5, https://files.epi.org/pdf/160282.pdf.
150. Statista, “Global market share of the information and communication technology (ICT) market from
2013 to 2021, by selected country,” https://www.statista.com/statistics/263801/global-market-
share-held-by-selected-countries-in-the-ict-market/.
151. Ezell, “Boosting Exports, Jobs, and Economic Growth by Expanding the ITA,” 7.
152. Mihir Desai, C. Fritz Foley, and James R. Hines, Jr., “Foreign Direct Investment and Domestic
Economic Activity” NBER Working Paper No. W11717 (2005) table 2, equation 4,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=837160.
153. Katherine Linton, Alexander Hammer, and Jeremy Wise, China: Effects of Intellectual Property
Infringement and Indigenous Innovation Policies on the U.S. Economy (Washington, D.C.: U.S.
International Trade Commission, May 2011), 4–17,
http://www.usitc.gov/publications/332/pub4226.pdf.
154. Bivens, “Updated employment multipliers for the U.S. economy,” 5.
155. Antonio Varas et al., “Strengthening the Global Semiconductor Supply Chain in an Uncertain Era”
(Boston Consulting Group, April 2021), https://www.bcg.com/en-
us/publications/2021/strengthening-the-global-semiconductor-supply-chain.
156. World Trade Organization, “Information Technology Agreement – Schedules of Concessions,”
https://www.wto.org/english/tratop_e/inftec_e/itscheds_e.htm. (Note that, following publication of
this report, Lao PDR joined the ITA and ITA-2 in 2022.)
157. Ezell and Wu, “How Joining the Information Technology Agreement Spurs Growth in Developing
Nations.”
158. Authors’ econometric analysis on World Bank Open Data indicators.
159. HS2017 six-digit codes from United Nations Comtrade Database. ITA-3 codes are taken directly as
HS2017 codes. ITA-1 and ITA-2 codes are converted to HS2017 codes from previous HS versions.
Note, this means some HS codes may appear in more than one list, given that product code
classifications change substantially between years. As a result, ITA-1 has a count of 149 product
codes and ITA-2 has a count of 192 product codes, whereas their original counts from the HS
version in the year such trade agreements were formed count 144 and 201, respectively.

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INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | SEPTEMBER 2021

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HOW ICT DRIVES ECONOMIC GROWTH

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High-income countries Low- and middle-income countries

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Developing nations’ investments in telecommunications infrastructure are 10 to 40 percent more

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HOW ITA PARTICIPATION BENEFITS COUNTRIES

Deepening Countries’ Participation in ICT GVCs

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ITA Members Non-ITA Members

The growing fragmentation of production across borders has important policy

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Boosting Countries’ Exports of ICT Goods and Services

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Joining the ITA Boosts Countries’ Trade Participation

A more-recent econometric study by Christian Henn and Arevik Gnutzmann-Mkrtchyan evaluates

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Dependent Independent Coefficient Standard Number of Base

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Semiconductors, Semiconductor Manufacturing Equipment, and Related Components

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▪ Materials for manufacturing printed circuits (HS 3921.90)

▪ Storage batteries (HS 8507.20, 8507.30, 8507.40)

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Semiconductor-powered sensors, controllers, and meters—several specific types of which are

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Buildings Space Space Water Lighting Appliances Other Smart Space

Smart Manufacturing Technologies

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In other words, the competitiveness of a nation’s manufacturing enterprises—both large and

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Drones for Commercial and Personal Use

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▪ Microfluidics (HS 8479.79 and 9027.80); and

ANALYZING THE ECONOMIC IMPACTS OF A PROPOSED ITA-3 EXPANSION

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Summary Explanation of Methodology and Data Sources

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Modeling the Economic Impacts of ITA-3 Accession

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Brazil $15,394 $177,348 8.68% $1,697 $10,857 6.12%

China $193,142 $2,068,950 9.34% $5,680 $41,820 2.02%

Costa Rica $1,589 $16,106 9.86% $11 $281 1.75%

Indonesia $16,828 $171,276 9.82% $134 $2,655 1.55%

Japan $70,630 $720,895 9.80% $274 $9,106 1.26%

Kenya $893 $17,210 5.19% $76 $1,390 8.07%

Malaysia $16,287 $204,906 7.95% $120 $660 0.74%