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IT and Global Trade Open Markets, Trade Agreements Are Essential for IBM

Why do we care about Free Trade Agreements?

IBM is a global company – we operate in 170 countries and 60% of our revenue comes from outside the U.S. – Simply put, that is where a large slice of our customers are
Our fastest growing markets are outside of the U.S. – revenue from major emerging markets like Brazil, China, India and Russia grew a combined 21% in 2006
This means that barrier-free access to global markets is critical to IBM’s growth · Trade agreements – either bilateral or multilateral like the Doha Round – help secure fair access to major markets for IBM and our clients
FTAs act as market access insurance policies against protectionist measures
FTAs enshrine legal protections for intellectual property rights – the lifeblood of IBM as the world’s largest patent holder

Why does IBM care about multilateral trade agreements?

Multilateral accords secure agreement between all 151 members of the WTO
For a global company like IBM, the multilateral process provides much greater market opening impact than a series of bi-lateral FTAs – bi-lateral agreements are between only two countries
Given IBM’s globally integrated supply chain, global delivery model for services and large clients with their own global operations, the multilateral WTO process is a better way to address our market access needs in the many countries in which we operate

Why does IBM care about the WTO Doha Round services negotiations?

Most people think of IBM as “Big Blue” – a manufacturer of big mainframe computers
But over half of IBM’s revenue now comes from services - Services and software combined account for about three-quarters of our revenue
Across the entire industry, services and software make up two-thirds of worldwide IT revenue and have grown at 11.9% per year since 1996 vs. only 4.9% for hardware
The World Trade Organization Doha Round services negotiations in computer and related services are critical for IBM to grow and prosper

Korea is the 7th largest trading partner of the U.S. and the 10th largest economy in the world

Two-way trade between the countries amounted to $78.3 billion in 2006
Korea has agreed to dismantle barriers to virtually all major service sectors, including financial, express delivery, telecom and data processing services.
The Korea FTA has been called the “gold standard” for financial services providers – many of whom are among IBM’s largest customers.
Korea has also committed to transparency, non-discrimination in e-commerce and agreed not to impose customs duties on products delivered electronically.

The agreement provides high-level standards for protection and enforcement of intellectual property rights.
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