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As a global company, HP is dedicated to free trade and the reduction of barriers across borders. Free trade can play an important role in promoting democracy, labor rights and human rights around the world. HP is committed to ensuring that foreign markets are open to IT goods and services, and that governments commit to maintaining such openness.
By implementing free trade legislation, the U.S. federal government helps to eliminate tariffs and enables HP and other companies to increase business opportunities and maintain America’s competitiveness in the global marketplace. Some free trade agreements (FTA), such as the EU-Mercosur FTA, do not include the U.S., but are equally important to HP’s business interests because they support greater market access worldwide.
The World Trade Organization (WTO) is a key international organization designed to negotiate and supervise international trade agreements. The WTO has 165 member countries and oversees about 60 different agreements. Accession to the WTO takes about five years and accession negotiations provide an opportunity to encourage applying governments to meet market opening requirements.
Part of WTO’s role includes the Doha Development Round. HP seeks its successful conclusion because the negotiations aim to create a comprehensive global reduction, if not elimination, of tariff and non-tariff barriers to commerce worldwide. This will help to create a level playing field, as well as binding commitments on trade facilitation, which seek to standardize and harmonize customs processes and procedures.
HP’s objective is to support the favorable resolution during trade negotiations of the five core issues listed below.
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HP's position |
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HP supports a successful conclusion to the Doha Development Round and urges all WTO members to commit to an agenda of liberalization. |
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HP supports the elimination of tariffs as well as non-tariff barriers on IT products in the Doha Round and other trade agreements. |
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HP encourages comprehensive and progressive bilateral and regional trade agreements worldwide that include deep commitments to liberalization on government procurement, services and standards disciplines. |
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HP promotes labor standards, human rights and environmental responsibility around the world, within our sphere of influence. HP developed the HP Supplier Code of Conduct in correspondence with the Electronic Industry Code of Conduct (EICC). |
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Impact on HP |
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More than 60 percent of HP revenues result from sales outside the U.S., indicating the importance of obtaining and maintaining access to foreign markets. The successful conclusion of the five core issues for HP in bilateral, regional FTAs and, most especially, in the Doha Development Round could have a number of positive bottom-line impacts, including: |
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Elimination/phase-out of tariffs on IT products. In 2007, HP paid a substantial amount in tariffs worldwide – despite the fact that most trade in information technology (IT) products is duty-free as a result of the WTO’s Information Technology Agreement (ITA). The reduction/phasing out of remaining tariffs on IT products would serve to reduce costs and enhance competitiveness of HP products. |
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Customs modernization and trade facilitation. The World Customs Organization (WCO) reports that archaic and non-productive customs practices and procedures unnecessarily add approximately five to seven percent to the cost of products and delay product marketplace entry. HP as well as other companies engaged in international trade will realize gains from modernization of customs procedures by being able to deliver products faster (“time to market”) and at a lower cost around the world. The modernization and reform of outdated practices through the Kyoto Convention on the Simplification and Harmonization of Customs Procedures, an international agreement on customs reform, offers the chance to cut wasteful expenditures, reduce corruption, improve transparency, enhance security, and sharpen HP’s competitive edge. |
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Transparency in government procurement. A key item in the Doha Round and other trade negotiations is attaining commitments to transparency, openness and due process in government procurement. An estimated $287 billion in government procurement opportunities worldwide remains closed off to foreign suppliers. Success in gaining agreement on procurement transparency will permit HP to compete on a level playing field for government contracts worldwide and reduce corruption. This also supports HP’s e-government objectives. Although procurement transparency appears off the table in the Doha Round, it remains a prime objective in bilateral and regional FTA negotiations. |
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Liberalization of IT services. HP increased the number of its customers for business intelligence services by 50 percent in its fiscal year 2007, while the number of business intelligence “mega-deals” – projects totaling more than $1 million in revenue – increased by 32 percent. HP’s strategic plan anticipates that the trend towards providing services will accelerate. Ensuring that foreign markets are open to IT services and that governments commit to maintaining such openness will underpin achievement of HP’s IT Services objectives. |
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Elimination of redundant testing and certification of IT products. There has been an increase in the number of requirements for testing and certifying IT products– even though these products have already been tested in accordance with internationally accepted standards. Increasingly, these redundant testing requirements are barriers to trade with significant costs and delays. For a company like HP, where products have short life, this is extremely detrimental. Trade agreements offer the opportunity to reverse this trend. |
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