China gets November deadline to help restart ITA talks

Beijing's hosting of Apec meeting revives hopes for an agreement to expand scope of tariff cuts

PUBLISHED : Monday, 21 July, 2014, 3:18am
UPDATED : Monday, 21 July, 2014, 3:18am

China is under renewed pressure to push for the expansion of tariff cuts on information and communications technology products at the next Asia-Pacific Economic Cooperation (Apec) leaders' meeting, which will be held in Beijing in November.

It has been about eight months since talks 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 it wanted excluded from an expanded Information Technology Agreement (ITA), a tariff-cutting pact initiated under the World Trade Organisation.

There were hopes that a breakthrough could be reached during the sixth United States-China Strategic and Economic Dialogue in Beijing earlier this month.

However, no such breakthrough was realised by trade negotiators from the world's two-largest economies.

At the conclusion of the two-day affair on July 10, a joint statement from the two countries acknowledged that they "held constructive discussions" on expanding the ITA.

"Both sides commit to continue the discussions within the next few weeks, to create conditions to restart plurilateral negotiations," they said.

An expanded ITA is forecast to boost 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, US think tank the Information Technology and Innovation Foundation estimated.

China is also expected to benefit with an additional US$12 billion a year in exports.

At a hearing last week of the US House of Representatives' Ways and Means Committee, California lawmaker David Nunes, chairman of the subcommittee on trade, said China must help reach a firm deal at the Apec leaders' summit to restart the stalled ITA talks. Nunes said any delay would "reflect a serious failure in China's leadership".

Negotiations last year tabled about 250 additional products to the 190 duty-free items originally covered by the ITA.

China had a "sensitivities" list of about 140 products, which included some 57 items for exclusion and the rest for longer tariff phase-out periods.

In November, Commerce Minister Gao Hucheng said there was still a way forward for the ITA talks. China joined the pact in 2003.

But John Neuffer, the senior vice-president for global policy at US advocacy group the Information Technology Industry Council, believes China is in the hot seat.

"With the Apec leaders' meeting just around the corner, mother time is now working against Beijing," he said.