This article reflects on the effectiveness of trade liberalization, as envisaged in the Information Technology Agreement (ITA) of the WTO, for promoting ICT use and production in developing countries. Based on empirical evidence on global exports of ITA goods, and the performance of different groups of ITA member countries and nonmember countries a case has been made for complementing trade liberalization with capacity building so that ITA becomes more attractive to developing countries as an additional strategy to bridge the digital divide. It has also been argued that substantial capabilities in ICT production and use have been developed over the years by select developing countries, which provide fresh opportunities for new ICT policy for social and economic development. Against this background the article makes the case for an e-South Framework Agreement that facilitates the harnessing of southern capabilities through building new system of ICT innovation, as a complement to ongoing North-South initiatives, inter alia involving trade liberalization along with capacity building to promote ICT use and production in developing countries.