Efforts to break ITA deadlock may heat up China-US bilateral meeting

US challenges Beijing to show 'leadership' on ITA deadlock and agree to free up trade

PUBLISHED : Wednesday, 09 July, 2014, 5:19am
UPDATED : Wednesday, 09 July, 2014, 5:40am

The United States has again put the onus on China to break the deadlock in talks to expand the scope of the Information Technology Agreement (ITA), which could intensify discussions at today's start of the strategic and economic dialogue in Beijing.

US Trade Representative Michael Froman fired the first salvo on Monday when he called on China to show "real leadership" on the ITA issue at the bilateral dialogue, which concludes tomorrow.

Broadening the scope of the ITA, a global pact set up under the World Trade Organisation, is forecast to increase global trade in information and communications technology products to more than US$5 trillion this year from US$1.2 trillion when the deal took effect in 1996, the Information Technology and Innovation Foundation, a US-based think tank, has estimated.

ITA negotiations in Geneva were suspended on November 21 after China, the world's biggest exporter and importer of hi-tech goods, refused to pare down the number of products in its "sensitivities" list that it wanted excluded from an expanded ITA.

China's sensitivities list of about 140 products featured advanced chips known as multi-component semiconductors. The US sought to exclude only fibre-optic cables.

While Froman hoped the bilateral meeting would help restart ITA negotiations, Beijing will likely keep semiconductors out of the talks as it wants to develop that industry.

Last month, the State Council introduced the "Guidelines to Promote National IC Industry Development", which sets out targets and long-term support for domestic designers, developers and manufacturers of integrated circuits. It proposes an investment fund to inject fresh capital into the semiconductor industry.