WASHINGTON-Top Bush administration trade negotiator Rob Portman said the United States negotiated an agreement with the European Union, Japan, Korea and Taiwan in applying zero tariffs on multi-chip integrated circuits, evolutionary new semiconductors used in cell phones and other miniaturized consumer electronic products.
“Multi-chip packages were not even in existence in 1999, and are now a major high-tech input to many advanced electronics products,” said Portman. “Applying zero duties on MCP’s among our key semiconductor trading partners will boost sales and thereby enable this industry to grow even faster. U.S. leadership to bring the MCP agreement to conclusion is reflective of the priority the United States attaches to moving the high-tech trade agenda forward.”
The Office of U.S. Trade Representative said U.S.-headquartered companies account for more than 50 percent of global MCP production, which was valued at more than $4 billion in 2004. Under the agreement, according to USTR, the United States will cut its 2.6 percent duty on MCPs, while Korea will cut its 8-percent bound duty and the European Union will cut duties bound at rates as high as 4 percent. Japan currently does not have duties on MCPs.
“This agreement is not only important for U.S. companies but for the ongoing WTO Doha Development Agenda negotiations,” said Portman. “A key goal of the United States in the DDA negotiations is to eliminate tariffs on manufactured products in all sectors and this agreement will serve as a shot in the arm for these talks.”
The agreement will serve to boost wireless chipmakers like Texas Instruments Inc. and Qualcomm Inc.
