Liberalization of Information Technology Services

Company information

While much progress has been achieved in opening markets to trade in technology products and services, barriers still remain. Many countries have opened their markets to technology goods but harbor restrictions on technology and related services. Examples of such services include consulting, software-related services, data processing, database work, IT sourcing, Web hosting, application hosting, IT security services, customer support and training. Since technology customers increasingly buy IT solutions as a "service," it is becoming more important for countries to take steps to open their markets to trade in IT services. In addition, since some IT offerings, like software, may have characteristics of both a good and a service, it is necessary to make certain that a full range of IT products and services are liberalized. Finally, without further agreement, the emergence of new technologies and delivery systems, including the Internet, creates the potential for countries to impose new trade barriers.

Ongoing trade negotiations offer opportunities to liberalize information technology services and electronic delivery methods, while making certain that emerging technologies will not be subject to new restrictions. These opportunities exist in the global round of negotiations at the World Trade Organization (WTO), through modifications to the General Agreement on Trade in Services (GATS); in the context of the regional negotiations for a Free Trade Area of the Americas (FTAA); and in bilateral negotiations. For example, the Panama – United States Trade Promotion Agreement, signed in 2007, is a bilateral free trade agreement.  The main objective is to eliminate obstacles in trading and to consolidate goods and services between both nations. The General Agreement on Trade in Services aims to extend the multilateral trading system to services, in the same way the General Agreement on Tariffs and Trade provides such a system for merchandise trade.

HP's position

	•	HP supports fully-liberalized trade for the broadest possible range of services in trade negotiations, including computer services, telecommunications, and e-commerce.
	•	HP encourages the liberalization of a full range of service delivery methods for IT products.  Products and services delivered over the Internet should be treated no less favorably than other methods of delivery.
	•	HP supports liberalization of other services sectors in addition to IT services, such as financial services, insurance and healthcare as vehicles for expanding the availability of IT services.
	•	HP believes that ensuring barriers to IT services are avoided should be a primary objective of the negotiations in the current round of WTO negotiations, FTAA negotiations and in the negotiation of bilateral trade agreements.
	•	HP supports efforts to ensure that new and emerging technology sectors are subject to existing WTO obligations.

	Impact on HP

IT services already comprise a significant part of HP's business – of total net revenue in the 2007 fiscal year, about 20 percent of revenue resulted from services.  HP's strategic plan predicts that providing services will become even more important in the future. HP services combine the technical expertise of 69,000 professionals located in 170 countries across the globe.  The successful removal of tariffs and non-tariff barriers in foreign markets, while ensuring that these markets remain open to IT services, will have a positive impact on meeting HP's business goals.

Ensuring that barriers on the provision of information technology services are not adapted will translate into additional benefits for the overall trade in IT products, particularly in developing countries where infrastructure is poor. Many information services products underpin critical infrastructure improvements that are necessary to produce goods and other services. Liberalizing IT services and electronic distribution, along with services related to transportation, communication and investment will foster demand for additional IT services and products.